The Demand for Ethanol
Ethanol is a clean-burning, high-octane renewable biofuel that is produced domestically in the United States from renewable sources. Ethanol blends increase fuel octane ratings, decrease harmful fossil fuel emissions, reduce costs at the pump and extend the country's overall supply of gasoline. While the majority of U.S. ethanol is made from corn, ethanol also can be produced from other feedstocks such as grain sorghum and sugarcane.
As the United States continues to realize the economic and environmental benefits of ethanol, demand is increasing:
- The U.S. has overtaken Brazil, consuming 6.8 billion gallons of ethanol in 2007.
- The U.S. currently imports more than 60% of its crude oil needs.
- The Energy Independence and Security Act of 2007 and Renewable Fuels Standard (RFS) mandate the use of 9 billion gallons of renewable fuels in the United States in 2008, increasing incrementally to 36 billion gallons in 2022.
- The RFS specifies the use of "advanced" biofuels other than corn-derived ethanol for meeting certain greenhouse gas reduction requirements, such as sugarcane-ethanol.
- The recently adopted Low Carbon Fuel Standard by California requires reduction of carbon intensity of fuel by 10% by 2020.
In California, all electric utilities are required by state mandate to purchase or generate from renewable resources 20% of the electricity delivered to customers by 2010. That percentage increases to 33% by 2020. Reports to the California Energy Commission indicate that the utilities are having difficulties meeting that requirement, increasing the opportunities for companies such as CE&P that offer green power. According to a recent report from the National Renewable Energy Laboratory, this demand for clean energy will out-pace production by 37% unless a number of facilities are rushed into production.
CE&P is responding to this opportunity by initially developing ethanol production facilities in California's Imperial Valley. At capacity, these CE&P facilities will produce:
- Fuel-grade, low carbon ethanol
- Renewable energy to power the facility and California power grid
- Fertilizer for use in the sugarcane fields and the balance being sold
- Biomass which may be sold as forage or as boiler fuel to a local biomass power plant
- Biomethane for various technical and commercially viable applications ranging from natural gas to fuel cell technology.
CE&P is committed to producing sustainable and renewable green energy in California for use in California from locally grown sugarcane.