Craig Elmore, Larry Fleming and Carson Kalin, who co-own Brawley-based Imperial Bioresources LLC, say the company's sugar cane tests in the Imperial Valley over the last three years show extraordinarily high yields and record sugar content.
The sugar cane will be processed at the Holly plant into several products, but the main one is ethanol.
California has a future as a large market for ethanol, according to a report in March by the California Energy Commission.
Ethanol is a replacement for the gasoline additive methyl tertiary butyl ethers, commonly known as MTBE.
MTBE is a crude oil by-product that has been used to reduce carbon monoxide in gasoline. But MTBE has been found to pollute groundwater, in which it causes a turpentine-like taste and smell.
The National Institute of Environmental Health Sciences reports people have complained about MTBE causing nausea, dizziness, headaches and eye, nose and throat irritation.
MTBE is being phased out by the federal government starting in 2003.
Based on the phase-out, the energy commission estimates ethanol demand in 2003 will range from 580 million to 715 million gallons per year.
Only 6 to 10 million gallons of ethanol is being produced in California, Elmore said.
"California already consumes 100 million gallons of ethanol a year," he said. "This facility will produce 20 to 30 million gallons of ethanol a year."
"And that will be expandable," Fleming added.
The commission points out the demand for ethanol may be risky because it depends on fuel policy regulations.
Also, the commission warns that other areas of the country may demand more ethanol, possibly leaving California unable to get enough of it at a reasonable cost.
How the Valley benefits
At the beginning of 2001, California had four sugar beet-processing plants. Now there are two.
Plants in Tracy and Woodland were closed because costs were too high and sugar prices were too low, Elmore said.
The price of sugar has been down in the last several years because of oversupply, Holly Sugar District Manager Bill Stewart said.
Fleming, Kalin and Elmore will keep growing beets since the sugar cane and sugar beet seasons complement each other.
"This makes beets stay here," Kalin said, referring to the cane-to-ethanol project.
Growing sugar cane in the Valley helps other crops in the county.
"All of the crops we grow here in the Valley are in chronic oversupply," Fleming said.
If farmers used 20,000 acres for cane, other crops such as alfalfa would benefit because those supplies would be lowered, Elmore said.
Employees at the sugar plant also would benefit.
Imperial County has high unemployment that seasonally can reach among the top in the nation, an Imperial Bioresources project plan states.
About 300 people work at the sugar plant during the beet season. Only 103 people are employed there year-round, Holly Sugar plant union president Abel Aguirre said.
Once workers become full-time, they'll have access to employee benefits such as health care. They won't need to collect unemployment or work other part-time jobs the rest of the year, Aguirre said.
He said ethanol production should add about 100 more jobs to the plant. Total jobs at the plant would be about 400, bringing the plant up to the employment levels of four years ago.
There are safety concerns, he said. Ethanol is an explosive so additional training would be needed.
"We'll start processing cane in November 2004," Elmore said. "We'll need all that time between then and now to make modifications and expand the plant."
Fleming estimates the costs to make changes to the plant will run well over $100 million and could approach $200 million.
All the changes will take place while sugar beet-processing continues at Holly.
"People in the factory are really excited about this," Aguirre said. "Ethanol is something that's going to stay here a long time."
Workers at the plant thought the idea of growing sugar cane was not going to work because it's a tropical crop, Aguirre said. But the trials show it grows here, he said.
What the trials show
Imperial Bioresources farmers compared their harvest results to sugar cane harvests in Florida, Louisiana and Texas.
Harvests in the Valley were 50 percent higher in tonnage and 50 percent higher in sugar content, Elmore said.
According to a draft report from the University of California, the ideal sugar cane growing climate is:
· A long, warm summer growing season with adequate rainfall (or irrigation),