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Pastimes : Triffin's Market Diary -- Ignore unavailable to you. Want to Upgrade?

To: Triffin who wrote (266)	8/2/2005 10:30:31 PM
From: Triffin	Read Replies (1) \| Respond to of 869

BC: ETHANOL TO REPLACE MTBE .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. According to the Renewable Fuels Association (One Massachusetts Ave., Suite 820, Washington, DC 20001; Tel: 202/289-3835, Fax: 202/289-7519; Email: info@ethanolrfa.org; Website: www.ethanolrfa.org), just a few days following the announcement by the U.S. EPA that California must abide by federal clean air regulations regarding the use of oxygenates in federal reformulated gasoline, a flurry of announcements were made concerning new ethanol plant construction. Indeed, on the very day the EPA decision was announced, one new ethanol plant began construction. According to ethanol plant builders, dozens of other proposed plants will now move forward, adding hundreds of millions of gallons of capacity to the ethanol industry over the next year and a half. "The impact of President Bush's decision to uphold clean air standards has been tremendous, and it's only been three days," says Bob Dinneen, vice president of the Renewable Fuels Association (RFA). "The ethanol industry has been given an unambiguous signal to expand at an unprecedented pace. This week 600 million gal. of ethanol production capacity began moving forward. The ethanol industry will clearly have more than ample capacity to meet California's oxygenate demand and, in fact, move us toward the ability to replace MTBE nationwide." On the day of the EPA announcement, Tall Corn Ethanol, a farmer-owned cooperative, began construction of a 40-million gal./yr. production facility in Coon Rapids, Iowa. The Tall Corn Ethanol plant is the first of three 40-million gal. plants being built by Broin and Associates (2209 E 57th St., Sioux Falls, SD 57108- 5102; Tel: 605/543-5090). Northern Lights Ethanol also has begun construction in Milbank, South Dakota. The third will begin construction in the next 2 mo. In addition, this year Broin and Associates will complete construction of a new ethanol plant in Wentworth, South Dakota, and a major expansion at Exol, Inc. in Albert Lea, Minnesota? totaling 60 million additional gal. Broin will also soon begin an expansion project at the Pro- Corn ethanol plant in Preston, Minnesota, raising its annual capacity from 18 to 36 million gal. "The denial of the California waiver has had a positive impact on investors' and lenders' willingness to move forward with ethanol projects," says Jeff Broin, president of Broin and Associates. Fagen, Inc. has been able to proceed with several projects following the EPA announcement. Construction will begin this calendar year on plants in Oregon, Wisconsin, Iowa, and South Dakota for a total of 210 million gal. of additional ethanol capacity. "The correct decision by the EPA to not allow California to backslide has pushed several of our projects to the finish line," says Bill Wells, vice president, Fagen, Inc. "A number of our projects waiting for this decision have now given us the green light to move forward as fast as possible," says Larry Johnson, business development manager with Delta-T Corp. Delta-T expects to begin construction on 8 to 10 ethanol plants over the next 12 mo. that would total 270 to 300 million gal. of additional ethanol production capacity. "This decision removes the largest uncertainty that was standing in the way of several significant projects," says Phil Madsen, president of Katzen International, Inc. "Many of these projects will now move forward." California is phasing out the use of MTBE by December 31, 2002. However, California also petitioned the federal EPA to waive the Clean Air Act requirement that RFG contain at least 2% oxygen by weight. The RFA argued in technical submissions over 2 yr. the waiver was unnecessary because MTBE could be replaced with ethanol, thus preserving RFG's air quality benefits but not threatening water supplies.