Ethanol is a solid step in state's energy future

By Mark DeSaulnier and Bob Balgenorth

GUEST COMMENTARY

WE'RE FEELING the financial squeeze at the pump. Oil politics are a major root cause of turmoil throughout the world. We face relentless questions on how fast our planet is warming and what we should do about it as a nation and as individuals. In all areas of our state, thousands search unsuccessfully for meaningful jobs.

Low-carbon renewable fuels, such as ethanol, that are produced right here in California, can be a significant tool to help solve all these problems.

The California Air Resources Board (CARB) recently took an important step toward encouraging increased use of low-carbon fuels at their June meeting in Fresno.

Gas prices have climbed to well more than $3.20 a gallon for two fundamental reasons -- the limited supply of gasoline on the Earth and the premium we pay because of the instability in the oil producing regions of the world.

In other words, crude oil is expensive because we are running out of cheap supply and all of the uncertainty in the Middle East also creates a significant "instability premium," which impacts America in the form of a hidden tax added to the price we pay at the pump.

Ethanol can be an intermediate step to solving this problem.

Today, ethanol is approximately 65 cents per gallon cheaper than gasoline in California.

Therefore, increasing its use is an immediate action the state can take today to decrease gasoline prices for consumers.

By incorporating as much as a 10 percent blend of ethanol into gasoline, we have the opportunity to increase the supply of gasoline by 4 percent, which will significantly reduce the cost of gas.

In addition, as a result of CARB's action, renewable fuel use in California will increase by more than 600 million gallons, and California is set to become the world's single largest renewable fuels market.

Just as it's been so often before in emerging technologies, California is home to the leading innovators in the renewable fuel revolution.

Venture capital firms are investing billions of dollars on the present and future in fuels. And biotech firms are transforming the California economy by working to diversify the state's transportation fuel base to include renewable fuels.

These dynamic companies and California's institutions of higher education employ increasing amounts of brainpower to build a brighter future for the state.

A brand-new sector of the California economy has passed the tipping point and has taken hold. New ethanol production facilities are being built, providing good, high-paying jobs with health benefits and a secure retirement for the highly-skilled labor force needed to build and maintain these complex plants.

Thousands of families and the local communities where these new plants are located are experiencing the positive economic benefits of this new renewable fuel industry.

This healthy market dynamic is good for everyone. Although some domestic auto companies have increased the amount of fuel flex-capable cars to the market, it's essential that others follow and that the pace is accelerated.

Through market adoption and government support, a majority of motorists could have real choice and a true competition of fuels would exist.

This would decrease prices of all fuels and stimulate a healthy competition -- a real win for all Californians.

And what about the warming Earth? Ethanol can provide a way to reduce carbon emissions from vehicles today, and in due time, with all the private and public research that is going on, ethanol in California will be made from additional sources such as agricultural residues or fast growing energy crops that include Eucalyptus and other types of plants.

Existing ethanol facilities will incorporate other measures to further reduce carbon emissions such as powering the plants with manure or biomass, which would make them virtually 100 percent renewable.

Although it's not the answer alone to solving global warming and climbing gas prices, ethanol is an immediate concrete step we can take to deal with many of the issues that threaten to overwhelm us if we don't act quickly.

As Californians, we need to do everything we can to take full advantage of the opportunity to increase the use of low carbon renewable fuels for the health of our environment, economy and consumers' pocketbooks -- today and for future Californians.