California Energy Commission conducts state ethanol survey

By | February 01, 2006
The California Energy Commission has released the results of a California oil refiners survey conducted last summer, which quantified and assessed the state's current and future ethanol use. "No one else had done something like this on ethanol use, and we felt it was information we needed to have," said Rob Schlichtling with the California Energy Commision.

The survey was also used to determine what impact the Energy Policy Act of 2005, which gives refiners in California the option to stop their ethanol use, would have on the future use of ethanol and supply of gasoline in the state. Ethanol is the only oxygenate approved for use in California since MTBE was phased out in 2000.

The survey found that refiners have no plans to increase or decrease their current ethanol blending percentages in the near future. Provisions in the Energy Policy Act of 2005 state that oxygenates are no longer required in gasoline in California except for carbon monoxide non-attainment areas. The survey showed that none of the refiners would decrease their current ethanol blending practices in the near future as a result of these provisions. Most of the refiners, in fact, said they would consider moving to a higher percentage of ethanol blending in the future. Some of the surveyed refiners reported that there have been some periodic challenges in ethanol delivery associated with intra-state movement of railcars. Some refiners also see some infrastructure issues that would have to be addressed if Californian were to increase ethanol volumes.

Today, the average daily gasoline production in California consists of about 6 percent ethanol by volume. Nearly one-third of California refiners are producing ethanol blends at or greater than 7.7 percent.

Concerns of possible ethanol prohibition during summer months have refiners worried about possible reduction in gasoline production rates. In the survey, refiners reported a ban of ethanol during summer months would severely limit their ability to produce an adequate volume of gasoline to meet California Air Resource Board requirements. One refiner reported it would stop producing gasoline altogether if a ban was enacted. In the end, the report shows refiners supporting the continued use of ethanol and possibly expanding its use.

-Staff Report