(Courtesy of Scripps-McClatchy Western Service.)
Drinking and driving don't mix—but that applies to wine that goes into the driver, not wine that winds up in the gas tank. =
The Europeans, it turns out, typically have lots of surplus wine they can't sell—and some of it ends up in American gas tanks.
It happens like this: The European governments offer "distillation credits"—a subsidy for wine producers to turn the surplus wine into alcohol. And American companies like Archer Daniels Midland Co. have been buying the European wine alcohol at auctions and turning it into ethanol.
Ethanol is used as a gasoline supplement, an "oxygenate" to help reduce auto pollution. It will replace MTBE in California gasoline in the next two years. So some of that European wine wound up in American gas tanks, but not a huge amount. That raises an interesting question: If European wine can be made into ethanol for American cars, couldn't California's wine surplus be used to meet the state's ethanol needs?
The answer seems to be probably not. California wine industry representatives looked into the issue and concluded that it didn't work economically.
"The grapes would have to be at very low prices to be viable (for ethanol use)," said Karen Ross, president of the California Association of Winegrape Growers. "It would have to be at last year's concentrate prices or lower," she said.
Jack King, director of national affairs at the California Farm Bureau, agreed. "The economics are impossible for the return you get," he said.
Andy Bivona, a partner in the Joseph Ciatti grape brokerage, had a harsher appraisal: Even if the wine was free, it would be difficult to sell the resulting alcohol at a profit. It takes about 10 gallons of wine to make a gallon of ethanol, and it sells for about a dollar a gallon, Bivona said.
The Farm Bureau has been looking at the ethanol market for all California farm products. The only way it seems to pencil out, King said, is if the material to be distilled is a waste byproduct of food processing, or if there is an extreme surplus. There are a lot of waste possibilities in California, he said—bark, wood, cellulose from rice straw, and corn. Winery waste material might be a possibility, he added.
Transportation is another issue. The ethanol plants would have to be fairly close to the vineyards, or the cost of transporting the grapes would quickly become more than the cost of the grapes, Ross said.
Perhaps if a grape varietal were developed with a very high per-acre yield and high sugar content, it might work, she said. But that's not the direction the wine industry wants to go. Lower yields and higher quality grapes are what the market is demanding. So why does it work for European wine, and even corn from the Midwest? Because of the government subsidies.
In the dog-eat-dog world of pure capitalism, the lowest-quality producers get stuck with a crop they can't sell, grapevines are pulled out, and growers are forced to plant something else with more market appeal. And that's why subsidies cause odd market twists—like European taxpayers subsidizing the production of ethanol for American cars.
If we don't want to go the subsidy route, I guess we'll just have to continue drinking our wine instead of pouring it in our gas tanks. Darn it.
