California Ethanol + Power finalizes marketing agreement with CHS

By California Ethanol + Power finalizes marketing agreement with CHS | December 10, 2020

California Ethanol + Power announced today an exclusive 15-year contract was awarded to CHS Inc. to market and sell the 68 million gallons of Essential Ethanol to be produced annually by the Sugar Valley Energy campus located in California’s Imperial Valley.

“The progression from our letter of intent to contract completion is a critical and important milestone for the Sugar Valley Energy project. A long-term relationship with CHS reinforces the value of sugarcane ethanol’s role in our state and country’s fuel needs,” said Dave Rubenstein, president and CEO of California Ethanol + Power, owner and developer for the alternative fuel and energy campus.

Sugar Valley Energy will be a 160-acre multi-plant campus consisting of sugarcane-to-ethanol, sugarcane to low-carbon power plus biomethane and wastewater treatment facilities. Once production reaches full capacity, Sugar Valley Energy is designed to produce 68 million gallons of ultra-low carbon, fuel-grade sugarcane ethanol each year. This Essential Ethanol will be mixed with gasoline for cleaner burning fuel.

Construction financing for Sugar Valley Energy is expected to be in place in the new year, with groundbreaking getting underway soon. Ethanol production is set to begin in 2023.

“As an energy provider for rural America, CHS continues to identify new technologies and new partners to help enhance reliable energy supply for our farmer-owners from diverse sources, while minimizing environmental impact,” said Brian Schouvieller, senior vice president, CHS Global Grain & Processing. “We look forward to collaborating with California Ethanol + Power and Imperial Valley sugarcane growers on this initiative.”

CHS, the nation’s leading agribusiness cooperative owned by farmers, ranchers and cooperatives, produces 260 million gallons of fuel-grade ethanol and markets 900 million gallons of ethanol each year, making CHS one of the nation’s largest suppliers of ethanol-enhanced gasoline and retailers of E85 ethanol.

Sugar Valley Energy will provide a long-term economically sustainable market for about 48,000 acres of sugarcane crop, which is highly suited for growth in the Imperial Valley climate. Sugarcane has a water demand similar to alfalfa, one of the region’s dominant crops. To grow the sugarcane needed, Sugar Valley Energy will seek long-term agreements with dozens of area farmers, providing a reliable and sustainable crop and income base for participating growers. 

California currently imports more than 1.2 billion gallons of ethanol each year, and Sugar Valley Energy’s production will help the state be more ethanol independent. The overall campus represents a significant economic boost for Imperial County and the region, with an investment of more than $1 Billion into its development and construction supporting approximately 15,100 jobs.