Changing Locomotion in Midstream: California’s Ethanol Mandate (Part 1)

NuStar ethanol tank farm at Selby, CaliforniaEditor’s note: On July 10th, I asked if you’d be interested in “crowdfunding” a feature article on meeting ethanol mandates in California.  You were: within two days, enough money was donated so that Spot.us, a new venture dedicated to crowdfunded reporting, was able to commission Wired.com staff writer Alexis Madrigal to move forward with his article.

We’re proud to be the first media source to publish Alexis’ article.  It will run as a five-part series: three parts published here on Gas 2.0, and the other two on Ecolocalizer.

I. How to Take Some Oil Out of An Energy System — Fast

“Don’t change horses in midstream.”
–aphorism based on 1864 Abraham Lincoln speech

What happens if, all of a sudden, you need to change the entire energy infrastructure on which California’s transportation system runs?

Most Californians probably haven’t noticed, but that’s exactly what a combination of Midwestern farmers, Big Oil companies, railroad operators, and fuel terminal owners have done over the last decade.

In switching out MTBE, a former component of California gasoline, in favor of ethanol, a behind-the-scenes change of huge proportions took place. The state and its industrial infrastructure companies managed to start putting a billion gallons of ethanol into our gas tanks a year, without anyone really noticing.

“Gasoline is just one component in what is legislated to be motor fuel. You can’t sell it without the ethanol,” says John Mahon, who runs renewable fuels for Kinder Morgan, a key player in California’s liquid fuels market. “Ethanol becomes a critical path.”

In 2000, California consumed about 60 million gallons of ethanol. That grew to 100 million gallons by 2002 and 600 million gallons by 2003, according to the California Energy Commission. In 2006, California consumed about 970 million gallons of ethanol. That’s a 1,500% increase in use of the biofuel in seven years.

Some in the energy debate say that this type of transformation is impossible. Other say radically changing our energy infrastructure is necessary. Many realists seem to suggest that both statements are true.

The MTBE-to-ethanol exchange is evidence that change can happen fast, but it might come at a price. It required no new behavior on the part of consumers and doesn’t appear to have added to the run-up in gas prices at the pump. On the other hand, the changes occurred out of public view in the industrial ports and railyards of the state, and now we’re stuck importing a fuel that may not actually reflect the politics of the people who use it.

The switch to ethanol has been so effective that while the Federal mandate that required ethanol use has gone by the wayside, refiners don’t have any alternative additives for making gasoline that fits the state’s bill.

Now, with a host of new state regulations sending oil, refining, and supply chain companies scrambling to reduce their carbon output, ethanol’s lessons have never been more relevant.

This alternative fuel experiment reveals how flexible our industrial infrastructure is, but also how difficult reducing our dependence on foreign oil is going to be without leaving our energy system more vulnerable than it already appears to be.

Tomorrow: The Geography of Green (at Ecolocalizer)

Image credit: Alexis Madrigal (madrigaelic) at Flickr under a Creative Commons license.

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13 Comments

  1. AND DO NOT “ADD WATER”.

    would you rather drink clean water, or drive around town?

    would you rather drive around town, or allow the less fortunate to have access to potable h20?

    people are coming up with “solutions” to these energy issues without considering the inherent risks TO OTHERS.

    PLEASE KEEP OTHERS IN MIND BEFORE YOU FILL UP YOUR TANKS WITH WATER AND FOOD!

  2. Can ethanol be used in two stroke configuration, like the turbo charged “Detroit Diesel’ from the past? Using ethanol in an engine like this would halve the engine weight for a given output wouldn’t it? I for one would like to have six cylinder performance from a three cylinder engine that fired every time and didn’t pollute.

  3. ave - Is there a lesson here in how to replace oil with alternatives: In 2000, California consumed about 60 million gallons of ethanol. That grew to 100 million gallons by 2002 and 600 million gallons by 2003. In 2006, California consumed about 970 million gallons of ethanol. That s a 1,500% increase in use of the biofuel in seven years.

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