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Growing suger

October 21, 2001

cane to produce

ethanol makes

economic sense

By LAURA MITCHELL, Staff Writer

A report from the University of California found growing sugar cane to produce ethanol in Imperial Valley makes economic sense.

Ethanol is grain alcohol that will be used to replace methyl tertiary butyl ethers, commonly known as MTBE, by 2003. With the phase-out, there will be a high in-state demand for ethanol.

Experimental cane-growing operations in the Imperial Valley "have enjoyed very promising initial success," the report found.

Cane grown in the Valley yields higher sugar content compared to farms in the Southeast, the report stated. More sugar means more molasses to make ethanol.

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The Oct. 8 draft report on the economic feasibility of sugar cane-to-ethanol operations in the Imperial Valley was conducted by Michael J. Bazdarich, director of the UC Riverside Forecasting Center and Paul G. Sebesta, director of the Desert Research Extension Center in Holtville.

While generally positive, the report stresses there are variables that need attention. One concern is water price stability.

Sugar cane production is dependent on a steady and large water supply. The report states a cane-to-ethanol project critically depends on stable water prices.

Currently water prices are at $15 per acre-foot. One acre-foot is 325,900 gallons.

Farmers could lose all economic profits, or rate of return on production factors, if water prices climb to $50 per acre-foot.

Other highlights from the report:

· A profitable cane-to-ethanol operation depends to some extent on government policies,

· California offers $70 per megawatt-hour for green power, which is renewable energy that results in lower air pollution emissions and no nuclear waste. Given current power woes, this price appears stable for the near future.

Staff Writer Laura Mitchell can be reached at (760) 337-3452 or la_mitchell@yahoo.com.

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