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Reevaluating the sale of ethanol-blended fuel

Tuesday, April 22, 2008 | 10:50 a.m. CDT; updated 5:20 a.m. CDT, Monday, July 21, 2008

JEFFERSON CITY — Though it has been in effect for only four months, some lawmakers want to repeal Missouri’s law requiring that gas stations sell ethanol-blended fuel.

A 2006 law requires most Missouri gas to be blended with 10 percent ethanol whenever Missouri’s gas is cheaper than regular gas. This 2006 requirement kicked off Jan. 1.

Rep. Mike Dethrow, among the lawmakers who voted for the ethanol mandate, said Monday that it is time to re-examine how it’s affecting the motorists, the state’s economy and farmers.

The House Transportation Committee was to hear testimony Tuesday on Dethrow’s bill repealing the mandate.

Dethrow, R-Alton, said he wouldn’t have voted for the requirement had he known what he knows now. He said state and federal ethanol mandates have altered the market and contributed to higher animal feed prices.

Ethanol is essentially a grain alcohol made by turning plant starch into sugar, fermenting it and then adding a small amount of natural gasoline to make the mixture toxic. Because ethanol is similar to gasoline, most vehicle engines can use fuel blended with up to 10 percent ethanol — called E10.

An economic analysis prepared by the consulting firm LECG estimates that Missouri motorists will save 9.8 cents for each gallon of E-10 they use in 2008. That study, paid for and released Monday by the Missouri Corn Merchandising Council, also predicts that over the next decade E-10 will save consumers $54 per year — or $214 million for the entire state.

That’s based on projected future costs of ethanol and oil prices from the Energy Information Administration.

Supporters of using alternative fuels point to the study as proof that Missouri was wise to require E-10. They argue that the mandate helps lower gas prices by increasing competition for gas.

Lawmakers this year are considering legislation that also would require use of biodiesel, which is made from soybeans and animal byproducts. That bill already has cleared the Senate but has yet to be debated by the same House committee that is scheduled to accept public testimony Tuesday on Dethrow’s bill.

Critics of the mandate blame the ethanol requirement for driving up the price for livestock feed.

“When you guarantee a segment of the any industry a piece of the market, if affects those who don’t have it,” Dethrow said about the ethanol mandate.

But John Urbanchuk, who authored the ethanol gas prices study, said alternative fuels have had little impact of food prices and are only one of several factors making it more expensive to feed farm animals such as cattle and hogs.

“It is a factor in the livestock industry right now, but it’s a complex set of facts,” Urbanchuk said. Plus, he said, ethanol production produces distillers grains that can be used as livestock feed to replace corn that is being used for ethanol.

Lawmakers who want the state to produce more alternative fuels said that besides lower gas prices, ethanol and biodiesel refineries bring new economic activity to rural areas and guarantee Missouri uses a renewable resource for some of its energy.

“There’s only so much oil on this earth, but we can grow more corn and we can grow more soybeans,” said Rep. Mike McGhee, R-Odessa.


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Comments

Mark Foecking April 22, 2008 | 3:29 p.m.

Few comments here.

Ethanol is not similar to gasoline. There is more energy in a gallon of gasoline than in a gallon of ethanol. To make ethanol blend with gasoline, it has to be dried, which increases the energy cost of the ethanol more than simply using 95% like they use in Brazil.

It takes about a barrel of oil to make a barrel of ethanol. If oil were not available to make ethanol, 5,400 gallons of ethanol would have to be produced to make 500 gallons available for sale.

The only benefit to corn ethanol is economic activity. It is not a sustainable fuel. Biodiesel is a little better, but still will not allow us to run our cars the way we do on oil.

The fundamental problem is that oil represents the stored energy of thousands of years of sunlight, where biofuels have to capture that energy in real time. Embracing biofuels means one must embrace radical conservation. The energy is simply not there to allow the world to drive as we have been.

DK

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