Steelman calls for a repeal of Missouri’s ethanol mandate

Tuesday, July 1, 2008 | 7:25 p.m. CDT; updated 10:22 a.m. CDT, Tuesday, July 22, 2008

JEFFERSON CITY — Republican gubernatorial candidate Sarah Steelman called Tuesday for the repeal of Missouri’s ethanol mandate, which she claims is fueling higher food prices.

A state law that took effect in January requires gas stations to sell a 10 percent ethanol blend whenever it is not more expensive than traditional gasoline.

The ethanol mandate was one of the priorities of Republican Gov. Matt Blunt as he campaigned for governor four years ago. But Blunt is not seeking re-election this year.

Steelman, the state treasurer, had made statements as recently as this spring generally supporting the ethanol mandate, albeit with reservations. But economic circumstances have continued to worsen since then, Steelman said Tuesday in explaining her evolving position.

“We are seeing the cost of food and groceries for people skyrocket. We’re seeing the cost of gas skyrocket. Missouri families are hurting,” Steelman said.

“I think part of that increase in food prices is due to the fact that we have a government mandate that we’re going to blend 10 percent ethanol in our gas,” she said. “We’re going to encourage farmers to grow corn for fuel instead of corn for food.”

Corn prices have surged more than 80 percent in the past year due to sharp increases in global demand to feed people, livestock and to make ethanol for gasoline blends.

Citing rising corn prices, Texas Gov. Rick Perry and more than four dozen U.S. House Republicans have asked the Environmental Protection Agency to waive a federal requirement to produce 9 billion gallons of ethanol for gasoline in 2008. That amount would consume about one-third of the nation’s corn crop this year, the Agriculture Department has said.

Steelman’s position stands alone, however, among Missouri’s leading gubernatorial candidates. Republican U.S. Rep. Kenny Hulshof and Democratic Attorney General Jay Nixon both support the ethanol mandate.

Hulshof spokesman Scott Baker accused Steelman of “a dramatic flip-flop” on ethanol policy.

Because ethanol can result in worse gas mileage, Steelman said Missouri’s mandate was costing motorists by forcing them to fill up more often. Baker countered that the ethanol mandate is keeping the price of gasoline from going even higher by lessening the need for expensive petroleum.

“It seems she has it out for Missouri farmers, and her plan is going to make gas prices go up even more,” Baker said.

Nixon said in a written statement that ethanol incentives have benefited the state’s economy and are inching the nation closer to a goal of energy independence.

“While we must be mindful of our family farmers who are struggling with the rising prices of everything from fuel to feed for livestock, we cannot turn the clock back on our commitment to alternative sources of energy,” Nixon said.

Steelman was highlighting her proposed ethanol repeal during scheduled campaign stops Tuesday in St. Louis, Springfield and Joplin. She stressed she was not against ethanol — just the mandate to use it.

As part of her energy platform, Steelman proposed a $500 income tax credit for the purchase of hybrid and flex-fuel vehicles, which can run on 85-percent ethanol blends or other alternative fuels.

If elected governor, Steelman said she also would urge the Department of Economic Development to try to lure an oil refinery to Missouri, though she did not propose any specific tax incentives for that Tuesday.

Steelman proposed the creation of a Missouri Energy Independence Commission to determine how to allocate state money for alternative energy sources. Ethanol incentives could be part of that, along with incentives for biomass fuels and such things as wind and solar power, she said.

Steelman also has been involved in the debate over who should be eligible to receive state incentives for investing in ethanol and biodiesel plants. As treasurer, Steelman implemented a policy prohibiting a program the office oversees from granting incentives to facilities with even a single elected official or family member as an investor.

Lawmakers who thought that policy was too strict voted to overturn it this year. They instead approved a policy allowing state financial incentives to benefit entities as long as politicians and their families don’t own more than 2 percent of the business.

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