Missouri mandates ethanol in gasoline

Missouri mandates ethanol in gasoline

	Published : Mon, 31 Dec 2007 15:15 By : Agencies Print this Story

JEFFERSON CITY, Mo. (AP) - Pushing the button for regular 87-grade octane, Steve Smith said he thought he was filling his SUV with ethanol-free gasoline.

'I don't buy super unleaded, knowing that it's ethanol,' Smith said, citing concerns about how ethanol could affect his vehicle.

But Smith was buying ethanol-blended gasoline, just as he had done several times before. Although many pumps don't announce it, almost all the gasoline sold in Missouri has contained a blend with 10 percent ethanol 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 the corn-based fuel is cheaper than 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 -- E-10 refers to the blend that is 10 percent ethanol -- has become increasingly common nationwide.

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

Fourteen states have no requirement that gasoline pumps 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 Missouri repealed its labeling requirement in 2002 -- four years before passing the law that mandated ethanol in gasoline by 2008.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.'

A 10 percent ethanol blend should have little 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 motivated many 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. But upon learning he has been using ethanol, he said he hadn't noticed any problems as a result.

'I don't know that it matters' said Smith, 48, of Jefferson City. But he added, 'it would be nice to know that.'