[HamiltonJay]

It's a matter of supply. The sudden switch from MTBE to ethanol in California creates a huge demand that the market was not ready for. That's why Gray Davis delayed the switchover from its original date.

Now I may be wrong, but seems to me the corn growers knowing the Ethonol switch was coming have probably more than been prepared for the switch, lets face it Ethonol is a kick back to corn growers always has been. I can see some delays issues regarding getting the equipment all in place, but it is standard equipment, unlike MTBE where it was a new process, ethonol gas is established. SO I am just having a hard time buying that this should cause any sort of massive shortages. Of course this is Cali we are talking about... they can screw up anything out there.

[babble-on]

another problem is that corn is in Iowa, drivers are in So. Cal. Takes a lot of effort to get the corn from a field in Iowa to a gas tank in Callie. For most states, the White House is proposing a renewable fuels portfolio approach, so overcompliance in the Midwest can be bought by states that don't have much corn.

[Dog Gone]

I doubt the corn supply is the problem. I imagine that building facilities that can produce a million gallons per day (or whatever the amount is) of ethanol to meet California's demand is no small task.

[Ernest_at_the_Beach]

Less ethanol can be used than MTBE to meet state blending requirements. Each gallon of ethanol-based gasoline will contain about 6 percent ethanol, compared with 11 percent MTBE per gallon. Since less ethanol can be added to gasoline, the total volume of finished gasoline produced in the state will be reduced by about 5 percent. To keep pace with demand, California will have to import 3 percent to 5 percent more gasoline, said industry expert Phillip Verleger.

I think the problem is the additional gasoline and the current in state refineries being maxed out , Of course the environmentalists will not let a new refinery to be built!