Missouri to Mandate Ethanol in New Year

Missouri is poised to become only the third state to mandate ethanol, the corn-based fuel, be mixed with gasoline.

When the New Year arrives Tuesday, Missouri will join Minnesota and Hawaii in requiring ethanol.

Most of Missouri's gas stations have already quietly made the switch. The fuel is a 10 percent blend of ethanol with gasoline and is cheaper than pure gasoline.

Ethanol-blended gasoline, commonly referred to as E-10, is becoming increasingly common, in part due to federal standards for alternative fuels. More than half the states have joined the federal government in offering incentives to ethanol producers or retailers. And because it burns cleaner than petroleum, ethanol-blended gasoline is the norm in numerous cities facing Environmental Protection Agency mandates to improve their air quality.

Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, expects a smooth shift because gas stations have switched without advertisement.

"We anticipate the Jan. 1 transition to be a nonevent," he said.

Fourteen states don't require gasoline pumps to post ethanol labels, according to the American Coalition for Ethanol. Missouri repealed its labeling requirement in 2002 — four years before passing the law that mandated ethanol in gasoline by 2008.

The Break Time convenience store in Missouri has sold ethanol-blended gasoline for years, but only labeled the 89 octane fuel as E-10. Consequently many motorists thought that was the only grade of gas containing ethanol. In reality, all the pumps dispensed an ethanol blend.

MFA Oil Co., a major distributor of ethanol, owns the Break Time chain.

Federal renewable fuels standard called for oil companies to buy 4.7 billion gallons of ethanol and biodiesel in 2007. Oil companies are expected to use about 7 billion gallons, but ethanol plants have produced 7.5 billion gallons, said Gary Marshall, chief executive officer of the Missouri Corn Growers Association.

That oversupply, combined with government tax incentives for ethanol, has caused ethanol-blended gasoline to be about 5 cents to 10 cents cheaper per gallon at the retail level than traditional gasoline.

That motivated many Missouri gas stations to make the ethanol switch ahead of the mandate.

The new law includes an exception automatically suspending the ethanol mandate anytime the price of ethanol exceeds that of traditional gasoline.

By this fall, 85 percent to 90 percent of Missouri gas stations already were selling ethanol blends in their regular unleaded gasoline, said Ron Hayes, the fuel-quality program manager for the Missouri Department of Agriculture.

From NPR reports and The Associated Press

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