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This will be an occasional feature instead of the usual JUICE column. Interview editors' note: With this issue, Circuit begins a new feature: "Personalities Plugged In." We often run across interesting characters in the energy business whom we quote. Sometimes they write guest editorials, as have Assemblymember Lloyd Levine and Sempra chair and chief executive officer Don Felsinger. But we want more. Gracing Circuit's pages will be monthly interviews with key people you should know more about. After a 20-year career as a state lawmaker and California secretary of state, Bill Jones has returned to his agricultural roots as founder of Pacific Ethanol. "I'm historically a rancher-farmer, second generation," Jones told Circuit in an exclusive interview. "My background is plant science and business." Many public officials who leave office are eager to step out of the spotlight after years of dealing with high-profile controversies. Not Jones. The strong-voiced Republican author of California's "Three Strikes" law remains squarely in the public eye as chair of one of the nation's largest and fastest-growing public biofuels companies. It's been only a short time since Jones left public life. He suffered two bruising defeats in his 2002 campaign for governor and 2004 race for the U.S. Senate. Suddenly, Jones is blazing what may be an increasingly controversial and high-profile trail in the transition to biofuels. In fact, as Circuit took the opportunity to talk to Jones about his views on the burgeoning ethanol industry, social and environmental justice groups from around the world were gathering in Brussels on March 8 to protest the European Union's consideration of a plan to shift gasoline production to include 10 percent biofuels. The groups claim that people in the global South are being displaced from their land to make way for "bioenergy crop" plantations and forced to work on those monoculture farms under exploitative conditions. They also are concerned that tropical forests are being cleared to make way for the bioenergy crop plantations, releasing more greenhouse gases than the fuels save. Other critics contend that making ethanol from corn takes as much fossil energy as it provides and that biofuels will raise the price of food by spiking the demand for the grain. Also, a $500 million project for a biofuels research center at the University of California, Berkeley, has drawn sharp criticism both within and outside academia (see story on page 5). Jones acknowledged some of the concerns and discounted others. Overall, he maintained that there are compelling reasons to move forward with biofuels and that the industry will improve its operations as it progresses. "My brother and I looked at renewable fuels in the late 1970s," he said. Jones grew up on a family farm in the San Joaquin Valley and majored in plant science at California State University at Fresno. However, even in the midst of the oil crisis that gripped the nation at the time, he concluded that the timing for biofuels was not right. His judgment proved prescient. Alternative fuels - though they seemed glamorous in California as then-governor Jerry Brown pushed ethanol and other substitutes for gasoline - never really got off the ground. Instead, they largely were strung along for the next 20 years only by virtue of government subsidies. "When I left public life, I reassessed my analysis," said Jones, and found things had changed dramatically. "The international strategic energy issue had grown. California had become a net importer of refined fuel. We had become the largest user of oxygenate." (Oxygenates are oxygen-containing fuel additives, such as ethanol, that help gasoline burn more completely and thereby minimize emissions of carbon monoxide, a gas harmful to human health.) Then, unlike in the 1970s, Jones concluded that the industry was poised to gain a permanent and commercially viable role in the U.S. energy market because of rapidly rising worldwide demand for fuel. It was apparent that China and India were squarely joining the automotive age. The world fuel market, he said, finally had become big enough to support both the petroleum industry and a new and growing biofuels industry. Another key factor, the former farmer noted, was that the state's dairy industry had grown dramatically, opening an opportunity to make ethanol near herds and sell the coproduct, known as distillers grain, in wet form. To sell the coproduct when feedlots are not nearby, ethanol makers must dry the grain, an expensive process that uses a lot of natural gas. Producers that can sell wet grain, therefore, have a huge market advantage over those who must dry it. Meanwhile, Congress enacted mandated levels for ethanol sales in gasoline, providing a solid market for the product as a fuel additive. Finally, where other Republicans saw peril, Jones saw opportunity in the state's burgeoning efforts to deal with climate change. "One of the big issues on the horizon was the greenhouse gas issue," he recalled. Then it clicked. With his long-time knowledge of farming, business, and public policy, Jones saw that ethanol could be produced in the West far from the cornfields of the Midwest at a profit. Moreover, it would, he believed, help the state meet its emerging greenhouse gas reduction goals. So he rolled up his sleeves and created Pacific Ethanol in 2003. He soon partnered with Neil Koehler and his ethanol-marketing firm Kinergy. By 2005, they garnered an infusion of $84 million in capital from Cascade Investment, owned by Microsoft chair Bill Gates. Today the company has one ethanol plant operating in Madera near Fresno and two more under construction in Oregon and Idaho. In addition, it is planning facilities in Stockton and the Imperial Valley. With a goal of becoming a leading producer and supplier of ethanol in the western U.S., the company hopes to have a production capacity of 220 million gallons a year by the middle of next year. The increasing amount of ethanol will be made from corn, he said, at least until the middle of the next decade. "There's a lot of issues yet to be resolved on cellulosic [ethanol], whether you look at the enzymatic or thermo-chemical process," he said. Government research can help, but private investment ultimately will be the key to advancing cellulosic production technology, Jones predicted. However, the lack of cellulosic technology will not stop ethanol from playing a key role in reducing petroleum dependence and meeting the state's greenhouse gas reduction goals, according to Jones. "Forty percent of greenhouse gas issues revolve around the tailpipe," he observed. "You have to be realistic looking at how to affect that in the short run." Ethanol, he said, is the only near-term option for reducing greenhouse gas emissions from fuels, and unless the state moves to produce it locally, it will find itself vulnerable to potential fuel disruptions. "Ethanol is scalable, financeable, and producible in the state today," he said. "Your option is to offshore this like we did with electricity. Then you wind up having to buy it back," he said, alluding to the lack of construction of in-state power-generating plants in the 1990s that left the state dependent on out-of-state supplies after deregulation and vulnerable to price volatility. Jones responded to concerns about how the growth of ethanol may increase air pollution in California, create impacts where corn is grown, and raise the cost of food by bidding up the price of and demand for corn. He maintained, for instance, that new cars are becoming cleaner and will soon erase the small increase in pollution from ethanol blends. He also pointed out that the ethanol production process is becoming more efficient, and farmers are responding to increased demand by planting more corn. "Don't take shots at the only option we have right now." Instead, he urged the state's government to stick to setting strategic goals, including energy independence, in-state energy production, and environmental improvement. With consistent goals, the private sector will meet the challenges, he said. For instance, Jones cited U.S. Department of Agriculture projections that farmers are likely to plant another 10 million acres of corn this year to meet growing demand, which will dampen the recent price surge for the grain. Likewise, he predicted that California cotton farmers would shift to corn over the next 18 months and grow it very successfully since they rely on irrigation rather than variable rainfall as do Midwest growers. This will lower the transportation cost for corn shipped to in-state ethanol plants. Jones expects that California ethanol makers will be able to team up more closely with dairies, not only providing them with wet distillers grain but using methane from manure piles as an input in their fuel plants. On the market side, he said that the ethanol industry will cooperate more closely with the oil industry to establish a network of pumps to sell E85, a blend of 85 percent ethanol and 15 percent gasoline now found mostly in the Midwest. Citing these and other improvements in the corn-based ethanol production and distribution process, he brushed aside critics such as professor David Pimentel, the Cornell University soil scientist who claims it takes more fossil fuel to make ethanol than an equivalent amount of gasoline. He called his studies old and based on outdated information about how ethanol from corn is made and marketed. "It's like any other technology that's improved," he said. "It's an evolution, and a positive evolution."

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