By 1980, fuel ethanol production had increased from a few million gallons in the 1970s to 175 million gallons per year. During the 1990s, production increased to billion gallons, and total production for 2006 is expected to be about billion gallons. Annual . plant capacity is now over billion gallons, most of it currently in use. Demand is rising partly because a number of States have banned (or soon will ban) methyl tertiary-butyl ether (MTBE), and ethanol is taking over MTBE’s role (Dien et al., April 2002). Ethanol provides a clean octane replacement for MTBE. The California Energy Commission and the California Department of Food.