But the regional agency in Los Angeles that would have received the money for the project voted last week to reject it, said the report, in part because its members do not believe that ethanol is a worthy alternative [image-nocss] to gasoline.
The rejection by the Southern California Association of Governments has meant big changes at Pearson, owner Mike Lewis told the newspaper. Lewis started the business when he built an alternative-fuel station in City Heights, Calif., where the company is now headquartered. "The administrative assistant I had working here is running the cash register at the gas station today, the people at the gas station got their hours cut back immediately," he said.
He said Pearson is still planning to expand its network of ethanol pumps in California, but the loss of the stimulus funding is a blow.
Lewis was going to use the money to install pumps for E85 at existing gas stations. The fuel, 85% ethanol and 15% gasoline, can be burned in flex-fuel vehicles, hundreds of thousands of which have been sold in California in recent years.
Proponents of ethanol say it is better than gasoline because it is derived from plants or other renewable sources and pollutes less, according to the report. But opponents say it is bad for the environment because production of corn, the primary raw material, uses copious amounts of water and petroleum-based fertilizers and lots of energy is used to cook the corn and then distill the alcohol after fermentation.
Federal and state officials have decided to push for ethanol fuels to lower pollution and greenhouse gas emissions, plus reduce the use of foreign oil.
People need access to biofuels if they are to take advantage of their smog-fighting qualities, Paul Webb, clean fuels officer for the South Coast Air Quality Management District, told the paper. The big problem is the infrastructure, he said.
Ethanol cannot be put in the pipelines that move oil and gasoline around the country, nor can it be sold out of the same pumps. So new pumps are needed.
But that was not convincing to members of the Southern California Association of Government's Regional Council, which is made up of elected officials from Los Angeles area municipalities and government agencies, including transit districts, the report said. "I don't think it's feasible," Larry Nelson, a city councilman from Artesia, in Los Angeles County, told the paper. "I don't think it's sustainable. I think it's morally bankrupt."
Internal politics at the government association also complicated matters. Lewis took the lead in the grant applications, but the staff people he was working with had not told the politicians at the organization about the application, the report added.
While oil companies and agriculture interests have fought over ethanol's value at the national level for years, most local government debates have been the not-in-my-backyard variety concerning particular plants, Matt Hartwig, a spokesperson for the Renewable Fuels Association, a coalition of ethanol makers, told the Union-Tribune.
He called the decision to turn down the funds shortsighted. "It's the only alternative to gasoline we have today," he said. "Those drivers in Southern California who have a flexible-fuel vehicle, who would like to drive on ethanol, have just been told they're not going to be given that opportunity. They've been told, no, we think you should use more gasoline."
Not everyone looks at it that way. Stephen Mayfield, director of the San Diego Center for Algae Biotechnology at the University of California San Diego, said ethanol is inferior to biofuels just around the corner because it requires new infrastructure and has less energy per gallon. He co-founded a local company, Sapphire Energy, which is using algae to make fuels that have been tested in cars and airplanes.
"They are indistinguishable from existing fuels," he told the paper. "[They go] into the same pipelines, to the same refineries. You would not notice one difference at the gas station."
It is not necessary, he said, to make massive changes in infrastructure if companies like his can take advantage of what's already there.
Lewis, whose Pearson Fuels was ready to build dozens of gas pumps, said the policy debate is valid, but the vote in Los Angeles was the wrong place to have it. He said the stations were planning to get ethanol distilled from old juice and soda, and then from agricultural waste, not corn.
Federal and state policymakers have decided to back ethanol, Lewis said. His company was ready to put people to work building the stations. "It's really the subcontractors who get hurt the most," he said.
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