Editorial: The rush for ethanol is on

Monday, April 17, 2006 | 7:25 a.m.

A farm tractor hauling five large wagons full of sugar cane was pictured April 10 in the business section of the Los Angeles Times. The photo, taken in the South American country of Colombia, accompanied a story about the burgeoning ethanol industry in that country. Although ethanol can be made from corn, prairie grass, wood chips and other organic sources, sugar is considered the best plant in the world for distilling into ethanol.

It seems that nearly every magazine, newspaper, wire service and TV and radio station, not to mention the Internet, is reporting these days about ethanol and its probable future as a major substitute for gasoline in countries around the world. Additionally they are reporting about the surge in sugar and corn production. A recent radio report said Cuba is upping its sugar production in response to its new demand as a source of ethanol.

An April 13 story in the Wall Street Journal was headlined, "Ethanol shifts share prices into overdrive." The lengthy article mentioned several U.S. companies expanding into the ethanol market, including the leaders, Archer-Daniels-Midland (better known as ADM) in Decatur, Ill., VeraSun Energy in Brookings, S.D., Aventine Renewable Energy Holdings in Pekin, Ill., and Cargill in Minneapolis. The Journal quoted one analyst as saying of the ethanol craze, "It looks like a rush to me" - as in gold rush.

The rush includes Microsoft co-founder Bill Gates. His investment company, Cascade Investment, agreed last November to put $84 million into Pacific Ethanol in Fresno, Calif., after the company announced plans to build five ethanol plants on the West Coast. There are always risks involved in investing, but more and more investors are taking those risks with ethanol.

An Associated Press article in March reported on Brazil's ethanol industry, which is so successful that the country has weaned itself entirely from imported oil, needing only that which is produced domestically. A key to Brazil's success is flex-fuel vehicles, which enable their owners to choose either gasoline or ethanol. So many Brazilians are freely choosing ethanol that millions in savings from oil imports are being spent to revitalize the country's rural areas.

It appears that we are seeing, for the first time in the United States, a serious challenge to the dominance of oil-based gasoline to power our cars and trucks. We hope American car manufacturers see the possibilities as clearly as the ethanol companies, and rise to the challenge by producing large quantities of flex-fuel cars in the coming years.