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Ethanol Industry Can Quickly Double Production to Replace MTBE

24 March 2000

Ethanol Industry Can Quickly Double Production to Replace MTBE; 'The Results Are in and the Answer is Clear. Ethanol Can Easily Replace MTBE In Gasoline,' Says Renewable Fuels' Eric Vaughn

    SAN FRANCISCO, Calif., March 23 Iowa Governor Tom Vilsack
today released a new analysis of the ethanol industry that clearly
demonstrates its ability to increase production in the wake of a ban on the
gasoline oxygen additive MTBE.  The report was prepared for the Governors'
Ethanol Coalition, which is chaired by Vilsack.  The report puts to rest
concerns that the MTBE ban would lead to oxygen additive shortages and
resulting gasoline price increases.
    "The results are in and the answer is clear.  Ethanol can easily replace
MTBE in gasoline," said Eric Vaughn, President of the Renewable Fuels
Association.  "MTBE is contaminating our water supplies and should be phased
out.  The ethanol industry stands ready to increase production to meet the
demand for a clean air, clean water oxygen additive.  Today's report clearly
demonstrates that the ethanol industry can double production within two years
-- quicker than the proposed three year MTBE phase out."
    The report, prepared by renowned industry analyst John Urbanchuk,
Executive Vice President of AUS Consultants, contained the following findings:

    *     Replacing MTBE with ethanol would increase the demand for ethanol to
          nearly 3.2 billion gallons per year by 2004.
    *     The ethanol industry can increase production capacity from 1.5
          billion gallons to 3.5 billion gallons per year by 2004 -- more than
          exceeding the greater demand.
    *     The increased capacity would come from increased utilization of
          existing plants, expansion of existing facilities, new plants
          currently under construction, and proposed facilities currently in
          various stages of development.
    *     Using ethanol to replace MTBE will prevent an oxygenate supply
          shortfall that could result in increased gasoline prices.
    *     Expanding ethanol capacity will result in $1.9 billion of new
          investment.
    *     Construction activity and increased commodity demand will add $11.7
          billion to real GDP by 2004 and increase household income by $2.5
          billion.
    *     Switching to ethanol will create more than 47,800 new jobs
          throughout the country.

    For a copy of the complete 18-page report, please call Monte Shaw at
415-772-5000, room 591, and leave your name, organization, and fax number.