Boost for ethanol a quandary for sellers

Complying with rules on price and blends are among the pieces of the puzzle stations must figure out.
Friday, June 15, 2007 | 2:00 a.m. CDT; updated 7:39 a.m. CDT, Saturday, July 19, 2008

JEFFERSON CITY — Gas station owners might need to change how they sell fuel to comply with the state ethanol mandate, Department of Agriculture Director Katie Smith said Thursday.

In 2006, lawmakers approved legislation that, starting in January 2008, requires gas stations to sell ethanol whenever the price of the alternative fuel is cheaper than regular gas. The law left the specifics for how that requirement would work to the Department of Agriculture.

A draft of preliminary ethanol rules calls for price comparisons to be made at the fuel terminals where gas stations get the fuel they sell to motorists. The draft does not directly address concerns raised by gas station owners about potential problems with switching between fuels.

Smith said the goal is to write rules to encourage using the maximum amount of ethanol. But gas station owners typically refill their tanks before they’re empty, which means they could end up mixing gas and selling fuel that has other percentage blends of ethanol.

Ron Leone, executive director of the Missouri Petroleum Markets and Convenience Store Association, said the biggest concerns involve determining where prices are calculated, how the ethanol is blended with gasoline and how to switch between regular and unblended fuel based on price.

“No matter what rule interpretation comes up, they are always in compliance if they are using ethanol blends,” he said.

Gary Marshall, CEO of the Missouri Corn Growers Association, said determining the prices for blended and unblended fuel shouldn’t rest only at the terminals.

Ethanol is a grain alcohol made by turning plant starch — such as corn or sugar cane — into sugar, fermenting it and creating alcohol that can be blended with gasoline to create a fuel most engines can burn.

Missouri has ethanol plants in Craig, Laddonia, Macon and Malta Bend, with three more being built.

Smith said preliminary rules will be filed with the secretary of state’s office by July 1.

Leone said the challenge is to turn the law’s theory into a workable requirement.

“We need to try to have the rule work seamlessly because it has to work thousands of times,” he said.

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