Monday, April 23, 2007

Ethanol Capital

Sacramento is an excellent headquarters to grow this fuel base, though experts indicate over-capacity may be a problem.

Fueling an empire
Pacific Ethanol, which recently moved its headquarters to Sacramento, seeks to grow
By Dale Kasler - Bee Staff Writer
Published 12:00 am PDT Monday, April 23, 2007

Pacific Ethanol Inc. has just one production plant in operation, in Madera. But it has enough facilities under construction or on the drawing board to create an ethanol empire stretching from Idaho to the Imperial Valley. Its plan is to increase its production capacity tenfold by 2010.

Why the rush? Sacramento's newest publicly traded corporation, having just relocated its headquarters from Fresno, needs to expand quickly before the market gets too crowded. Pacific Ethanol wants to keep "the pole position, if you will, in the West," said President and Chief Executive Neil Koehler.

The auto-racing reference is appropriate. Lots of people are moving furiously to build ethanol plants in California and the West. There are projects under construction or on the drawing boards up and down the Central Valley, including a just-hatched plan to build the state's largest ethanol plant at the former Sacramento Army Depot.

Ethanol is hot these days, praised by politicians and environmentalists as a tool to reduce global warming and America's dependence on foreign oil. But even as demand grows for the gasoline additive, some experts are warning of a glut.

"There has been a tendency to over-invest," said Jim Jordan, a transportation fuel consultant in Houston. "The numbers speak for themselves. We're going to have too much capacity if somebody doesn't do something."