Gridley, Butte County -- One aspect of President Bush's new energy plan, made public Thursday, calls for creating energy from renewable sources, such as plant waste that gets left in the fields after harvest.
But if the experience of Northern California rice farmers is any example, turning farm leftovers into fuel will be anything but easy.
For decades, farmers in the rice-growing region north of Sacramento have burned their fields after harvest to kill any microbes that might otherwise linger to infect the new rice planted in the spring.
In the early 1990s, however, California lawmakers ordered rice farmers to gradually quit routine burning in order to stop choking clouds of smoke from floating over urban areas.
Ever since, the farmers have been looking for other ways to dispose of the rice straw. With the burn ban taking full effect this year, the farmers say they are finally closing in on an alternative -- building a biotech refinery to turn rice straw into ethanol, an additive that helps gasoline burn cleaner.
"We expect to have the engineering specs for the plant drawn up by the end of June," said Ken Collins, president of the Rice Straw Co-op that farmers formed to ship the waste to this futuristic fuel plant. "Once we know the costs, we can start beating the bushes for money."
Although this is the sort of program envisioned by Bush, the farmers face an uphill struggle in bringing their plans to fruition.
Their proposed ethanol brewery is aimed at replacing the MTBE in California's automotive gas. State authorities haven't yet decided whether to embrace ethanol as a substitute or look for some other way to meet clean-air standards.
In addition to the political uncertainties, the project is fraught with technical and financial unknowns.
"Nobody so far has been able to build a refinery of this sort on a commercial scale," said Bryan Jenkins, an agricultural engineer at the University of California at Davis, who is familiar with the plans.
But rice farmers say they have found an industrial ally that can spin rice straw into fuel. BC International (BCI) is a Dedham, Mass., firm that holds a patent on a bioengineered bacterium that could be the key to turning 300,000 tons of dry rice straw into 23 million gallons of ethanol a year.
Together with the city of Gridley, the rice farmers and BCI have formed a partnership to build an ethanol plant. Their success, or failure, would be only a blip in efforts to solve state and federal energy problems. But the plant's fate could determine the future of California's rice industry.
Farmers in California planted 550,000 acres of rice in 2000, and harvested a crop worth an estimated $231 million, according to the U.S. Department of Agriculture. The dollar value of the crop was 9.8 percent lower than in 1999, when California farmers planted 505,000 acres and bagged $256 million worth of rice. California accounts for about 20 percent of the nation's rice production.
California's rice bowl is centered in the counties north of Sacramento -- Colusa, Butte, Glenn, Sutter and Yuba -- that are blessed with an abundance of water but cursed with hard, clay soils not suitable for other crops.
For 80 years, rice has been one of the region's mainstays. Now, the industry is caught between stagnant prices and rising costs. Jack Williams, a farm adviser with the University of California Cooperative Extension in Yuba City (Sutter County), said the average rice farmer grosses only $756 per acre planted. That includes a $116-per-acre federal subsidy.
It costs about $944 an acre to run a rice farm, he said. The burning ban has added to the deficit. It used to cost $3 an acre to burn fields for pest control. It costs $36 an acre to plow the rice straw underground, Williams said. And even at that higher cost, plowing isn't as effective as burning, because microbes can linger in the buried straw.
"We've got to eliminate the cost of removing the rice straw or we're dead," said Collins.
Over the years the farmers have explored alternatives. First they tried cutting the straw and shipping bales to a power plant that burned it to generate energy. That was a flop. Rice straw contains traces of minerals such as silica. When the straw is burned, these minerals leave thick residues that muck up the boilers.
Several years ago, the farmers began investigating the notion of converting the rice straw into ethanol. Until recently, however, that also seemed impractical.
Ethanol in the United States is currently made by converting the starches in grains, notably corn kernels, into sugar. The sugar is then fermented into ethanol, which is blended with gas to make it burn more efficiently. Ethanol producers enjoy a federal subsidy of 53 cents per gallon of ethanol, a benefit that flows mainly to the Corn Belt but could assist the rice farmers if they get their plant going.
The rice farmers quickly learned, however, that making ethanol from rice straw is more difficult than starting with corn kernels. The stalk of a rice plant -- or any plant, for that matter -- derives its strength from cellulose. Cellulose is related to starches and sugars but it has a far more rigid structure that hinders the ethanol conversion process.
"(Cellulose) is a tougher molecule and you have to beat it to death to make sugar," said Sharon Shoemaker, director of the California Institute of Food and Agricultural Research at UC Davis.
A couple of years ago, however, almost at the point of despair, the farmers stumbled upon BCI, which said it had devised a chemical and biological process to economically convert cellulose into ethanol and other byproducts.
"Without them, we wouldn't have a project on the drawing boards," said Tom Sanford, a former Gridley city councilman who's backing the ethanol plant.
The heart of the process is a genetically engineered E. coli bacterium, developed by the University of Florida and licensed to BCI.
"It's a full-bodied organism that will ferment most everything on God's earth," said Norm Hinman, a BCI official who is working with the rice farmers.
Hinman said BCI has tested its bioengineered bacteria at a demonstration plant in Jennings, La., and has recovered enough ethanol from rice straw to make a full-scale plant viable.
"We have basically piloted all the key steps," Hinman said.
Similarly, Collins and his fellow farmers have shown they can cut, bail and deliver a huge volume of straw to supply the plant.
This is no small feat. Collins showed off two piles of straw, each 24 feet wide, 21 feet tall and 200 feet long. Each pile represented 300 tons of straw. Farmers would have to collect more than 1,000 such stacks and truck them to the proposed plant.
That would be a tremendous expense. But if the plant can sell its ethanol at a profit, the work would be a boon to the local economy. "We have a seasonal unemployment problem," said Sanford. "Cutting and shipping the straw would put people to work in the off-harvest season, when things normally slow down."
For all its good intentions, the project is bedeviled by unknowns, not the least of which is the political uncertainty of what will happen when California stops putting MTBE in its gasoline.
Today, California refiners add MTBE to gas to meet pollution control targets set by the federal government. In 1999, prompted by concerns that MTBE was contaminating surface and groundwater, state authorities ordered that MTBE be phased out of the gas supply by Dec. 31, 2002.
Backers of the Gridley project hope the ethanol from their plant will substitute for MTBE. But state authorities have asked the federal Environmental Protection Agency to waive the requirement for putting an additive into fuel.
"We and the refiners have done some research that says you can make gasoline as clean as you need to without such additives," said Richard Varenchik, a spokesman for the California Air Resources Board.
So far, federal authorities haven't indicated whether California will get the waiver. "If we don't, the most likely result is we would have to use ethanol," Varenchik said.
If California doesn't get a waiver, it will have an ethanol problem. In March, the California Energy Commission said the United States produces about 1.9 billion gallons of ethanol a year, almost all of it from the corn-growing Midwest. California has almost no homegrown ethanol.
If California had to replace MTBE with ethanol, the commission estimates the state would need about 580 million gallons annually -- or more than a quarter of current supply. And even if the state could get enough ethanol, it could cost 15 cents a gallon to ship it here -- a cost that will probably show up at the pump.
"That's a lot of money that's going to leave the state," said Pat Perez, a commission staffer who worked on the report.
While it might ultimately make sense for California to ignite its own ethanol industry -- perhaps by providing loan guarantees for plants like the Gridley project -- Perez said the 23-million-gallon output from the rice straw plant would meet only a fraction of the state's needs. And it wouldn't arrive in time to meet the MTBE deadline.
"We will not see ethanol production in California until 2004, 2005 at the earliest," he said.
Undaunted, the rice farmers see themselves as pioneering a technology that could create energy from all sorts of cellulose waste, including paper that might otherwise clog landfills.
"I know I sound like a wacko," said rice grower Dan Boeger. "But what I think we're talking about is a process that will allow Spaceship Earth to produce more energy than it is consuming."
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