Ray Slim prepares to install emergency lighting in the distillation, dehydration and evaporation building at the Pinal Energy plant, an ethanol facility scheduled to begin production in May.

jennifer grimes / east valley tribune

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The age of ethanol is about to arrive in the Phoenix area. Pinal Energy LLC, a subsidiary of Arizona Grain Co., is putting the finishing touches on the state's first ethanol production plant near the town of Maricopa in northwestern Pinal County.

The $70 million facility is expected to begin production late next month with a capacity to make 52 million gallons of ethanol a year, mostly from corn shipped in from the Midwest.

Initially the output of the plant will be used mostly in 10 percent blends to increase the oxygen content of gasoline and make that fuel cleaner burning. But some of the output also will go toward production of E85, a blend of 85 percent ethanol and 15 percent gasoline that is coming into its own as a separate fuel.

"The market will tell us how much is E85," said John Skelley, general manager of Pinal Energy.

There is no shortage of vehicles in Arizona that could run on E85. Industry sources estimate that 100,000 to 150,000 flex-fuel vehicles are operating on Arizona roads and could run on either unleaded gasoline or E85.

The Tucson area is home to five stations that offer E85. C & T Oil, an independent service station operator, has been selling E85 at one of its Tucson stations for 18 months and has just opened pumps at two other stations. Owner Tim Cooley said E85 has been outselling diesel fuel and premium unleaded grades at his stations.

But E85 has not been available to consumers anywhere in the Phoenix area because of quirks in state and federal environmental laws that prevented service stations from offering the clean-burning fuel.

The Legislature fixed that problem last year by passing legislation that designates ethanol as a fuel that can be sold in Maricopa County and gives it tax exemptions. And with the Pinal Energy plant ready to come on line, E85 should become available at Phoenix-area gasoline stations within a few months, said Bill Sheaffer, executive director of the Valley of the Sun Clean Cities Coalition, a group that promotes the use of alternative fuels.

"It looks like a couple of station owners will come on board in Mesa and Chandler," he said.

In addition to the ethanol production plant, another important piece of the puzzle fell into place when Caljet of America, a fuel blending and storage company, agreed to blend the locally produced ethanol with gasoline at its storage facility in west Phoenix, Sheaffer said.

"The new mantra is "Send our fuel dollars to the Middle West rather than the Middle East,' " he said.

Keith Saunders, the owner of a Shell service station at Power and Guadalupe roads in east Mesa, said he hopes to offer E85 within two or three months.

"I'm excited about it," he said. "I think the whole country should be excited about it. Producing our own fuels is something we have to do."

Getting into the E85 dispensing business isn't a sure thing, but he thinks he can overcome the hurdles within a few months. To hold down costs, Saunders probably will offer the fuel in place of high-octane gasoline so he won't have to construct another storage tank at the station — a task that could cost up to $100,000.

He hasn't determined how much he will charge for E85, but he expects it will be competitive with gasoline.

Jon Van Bogart, director of Western region sales for Clean Fuel USA, a Texas-based company that makes dispensers for E85, predicts about 20 service stations will be offering the fuel in the Phoenix area by the end of this year.

"Fifty would be aggressive, 25 would be reasonable and I think 20 is a conservative and realistic expectation," he said. "We have received some orders from folks in Arizona."

Service station owners have to do a little groundwork such as cleaning out tanks and changing some of their plumbing and components before Clean Fuel USA can set up the dispensers, he said.