Missouri ethanol mandate kicks in quietly

Monday, December 31, 2007 | 5:01 p.m. CST; updated 7:47 p.m. CDT, Friday, July 18, 2008

JEFFERSON CITY — Selecting the button for regular 87-grade octane, Steve Smith thought he was filling his sports utility vehicle with ethanol-free gasoline.

“I don’t buy super unleaded, knowing that it’s ethanol,” Smith said, citing a general apprehension about how ethanol could affect his vehicle.

But Smith was buying ethanol-blended gasoline and had unknowingly done so numerous times before. Although many pumps don’t proclaim it, almost all the gasoline sold in Missouri has contained a 10 percent ethanol blend for at least the past several months.

A law taking effect Tuesday makes Missouri just the third state — behind Minnesota and Hawaii — to implement a wide-ranging ethanol mandate. Because ethanol is cheaper than traditional gasoline, most of Missouri’s gas stations quietly made the switch months in advance.

Like Smith, “most consumers in the state of Missouri have been using E-10 for months and probably don’t know it,” said Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association. “That’s why we anticipate the January 1 transition to be a nonevent.”

Ethanol-blended gasoline has become increasingly common nationwide.

Part of the reason rests with a federal standard for alternative-fuel production. More than half the states now also have joined the federal government in offering incentives to ethanol producers or retailers. And because it burns cleaner than petroleum, ethanol-blended gasoline now is the norm in numerous cities facing Environmental Protection Agency mandates to improve their air quality.

Yet 14 states have no requirement for gasoline pumps to be plastered with 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 Missouri repealed its labeling requirement in 2002 — four years before passing the law that mandated ethanol in gasoline by 2008.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, where Smith filled up, has voluntarily sold ethanol-blended gasoline for years and until recently had posted an ethanol label over its 89-octane gasoline. Many motorists thought that was the only grade of gas containing ethanol. In reality, all the pumps dispensed an ethanol blend, and even the 87-octane button likely supplied an 89-octane ethanol blend. Break Time stores are owned by MFA Oil Co., a major distributor of ethanol.

“We have had no problems with ethanol,” said MFA Oil President Jerry Taylor. “It’s, in our judgment, actually a better product — it’s higher octane, burns cleaner and helps engines last longer.”

Fuels containing an 85 percent ethanol blend have been shown to result in lower gas mileage for vehicles. But a 10 percent blend should have only a negligible effect on gas mileage, said Chad Tharpe, a Break Time station manager.

The 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 about 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 to 10 cents cheaper per gallon at the retail level than traditional gasoline.

That proved to be a large motivator for 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.

That came as quite a surprise to Smith, who thought he had been avoiding ethanol. Realizing that he actually had been using ethanol, Smith didn’t point to any particular troubles.

“I don’t know that it matters” said Smith, 48, of Jefferson City. But “it would be nice to know that.”

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