California Takes Action to Increase Use of Ethanol in Gasoline

FRESNO, Calif., June 15 -- The California Air Resources Board (CARB) at their June 14th meeting in Fresno voted on a new reformulation of California gasoline that will allow an increase up to 10 percent of the amount of renewable, clean-burning, low carbon ethanol into California's gasoline blend. Both ethanol and petroleum producers joined together to support this action and worked closely with Governor Arnold Schwarzenegger's administration, CARB and the environmental community to forge an agreement that will produce immediate reductions in greenhouse gases as it brings the state up to national standards for ethanol use.

"By incorporating a larger percentage of less expensive, renewable, clean- burning, low carbon ethanol into California's gasoline blend, consumers, the environment and the economy all benefit," said Bill Jones, Chairman and Founder of Pacific Ethanol, Inc. "Governor Schwarzenegger has made California a leader in reducing greenhouse gas emissions and today's action by the California Air Resources Board builds on that record of success. This decision is a testament to the good things that result when the business community, government and environmental stakeholders work together."

Despite California's continued national leadership in setting air quality and greenhouse gas emission reduction standards, the state's current formulation for gasoline has traditionally included a lower percentage of renewable, clean-burning, low carbon ethanol than the rest of the nation. By taking this action today, Gov. Schwarzenegger and CARB took a significant step toward changing that by approving a reformulated predictive model that brings California's use of ethanol up to the national standard.

"This new model for gasoline reformulation will allow a blend of up to 10 percent ethanol by volume to be sold in California. Until this landmark decision was made, California's gasoline blend contained one of the lowest percentages of ethanol in the country," said Larry Gross, CEO and Founder of Altra Biofuels, which operates an ethanol plant in Goshen, California. "This action will increase the market for ethanol by 600 million gallons a year in essence increasing fuel supply by over 4 percent which will have a very positive impact on total fuel supply."

In line with the Governor's aggressive goals to reduce greenhouse gas emissions, this decision will lead to immediate reductions in carbon emissions once it is implemented. The California ethanol producers employ state-of-the- art production practices that allow the companies to produce ethanol that reduces carbon dioxide emissions by up to 40 percent compared to conventional gasoline according to recent university studies.

In addition, this resolution is also expected to reduce the cost of gasoline for California's drivers who currently buy gas for more than $3.20/gallon. Today, ethanol is 65 cents cheaper per gallon than gasoline. By incorporating more of this less expensive, renewable, clean-burning, low carbon fuel into the gasoline mix and increasing the supply of available fuel in the state, Californians are likely going to see lower prices at the pump.