Requiring ethanol in all gasoline by ’07 is seen as helping more than the farmers.
Two bills requiring filling stations in Missouri to offer ethanol-blended fuels are before the General Assembly this session and appear to have bipartisan support. Supporters say increased use of ethanol would help the economy, lower gas prices, reduce dependence on foreign oil and improve air quality.
House Bill 1027, sponsored by Rep. Martin Rucker, D-St. Joseph, would require that all gasoline sold in Missouri after Jan. 1, 2007, contain at least 10 percent ethanol. Senate Bill 569, sponsored by Sen. John Cauthorn, R-Mexico, would impose a similar requirement, but it would exempt premium gasoline and aviation fuel.
Both bills are enjoying support in the early going from Democrats and Republicans and from farmers groups and petroleum marketers.
Gary Marshall, chief executive officer of the Missouri Corn Growers Association and the Missouri Corn Merchandising Council, said it makes economic sense to promote the use of ethanol.
“There are two oil wells in Missouri, no gas refineries, but we have millions of acres of corn,” Marshall said.
Last year, 20,000 Missouri corn farmers produced 320 million bushels of corn despite drought conditions across much of the state. Between a quarter and a third of that amount is used for ethanol, and the by-products from the process are used in animal feeds.
In Boone County alone, 22,000 harvested acres accounted for nearly 2 million bushels of corn in 2003. Every bushel of corn can produce 2.8 gallons of ethanol, according to ethanolfacts.com, a Web site operated by the National Corn Growers Association.
Rep. Judy Baker, D-Columbia, said she likes the legislation.
“It is good for Boone County due to the corn growers that reside here,” Baker said. “It will impact them in a positive manner and expand their opportunity to sell their product.”
Rep. Steve Hobbs, R-Mexico, who grows corn and has invested in ethanol plants, said, “It makes sense to use fuel generated in Missouri.”
“It’s good for the farmers, it’s good for the environment, and, Missouri, we need to do it,” Hobbs said.
Farmers aren’t the only ones who would be affected. Rucker said the move would help reduce dependence on foreign oil, while others cited more immediate economic impact.
“To produce ethanol in Missouri, we will need more plants,” Marshall said. “More plants equals more jobs. Those jobs, along with the money spent on ethanol-blended gasoline, will have economic impact on school, county, local and state economies. We want the money that goes into the oil companies’ pockets to go into Missouri pockets.”
Missouri has ethanol plants in Macon, Craig and Malta Bend. Last year, the three plants produced a total of 115 million gallons of ethanol. A fourth plant, scheduled to open this fall in Laddonia, is expected to increase the state’s ethanol production by 38 percent.
The only controversy the bills are stirring centers on the question of whether ethanol requirements will push gas prices down. Cauthorn and Marshall are among many who argue consumers would see lower prices at the pump.
“It should stabilize gas prices and possibly lower them,” Cauthorn said.
Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, said, however, that the additive might raise prices, directly or indirectly. Leone is lobbying for changes in the bills that would suspend the ethanol mandate if blended fuels exceed the cost of fossil fuels and if certain ethanol production quotas aren’t met.
The association was formerly opposed to the ethanol mandate but now supports it as long as those safeguards are in place to protect consumers from paying more and to ensure convenience store owners remain competitive with those in border states.
Ralph Groeschen, senior marketing specialist with the Minnesota Department of Agriculture, said the price of bulk ethanol over the past 15 years has been an average of 8 cents lower than the bulk price of gasoline. He said blending bulk gasoline and bulk ethanol at a 90/10 mixture results in a cheaper fuel.
Marshall said he doesn’t foresee any problem with Missouri meeting the quotas Leone seeks. “There should never be a point in time when ethanol production would be low due to the amount of corn produced in Missouri,” he said.
Marshall said cleaner air is another reason to move toward widespread use of ethanol. He cited success with the blended fuel in Minnesota, where an ethanol mandate implemented in phases is credited with helping St. Paul and Minneapolis come into compliance with EPA clean air standards.