Missouri ethanol mandate not in effect

Newly elected Columbia lawmakers are divided on whether to keep mandate.

By Gretchen Mahan

Published Dec. 11, 2008

As gasoline prices continue to fall, a Missouri law which requires fuel companies to mix 10 percent ethanol into the petroleum that they sell is technically no longer in effect.

According to the language of the mandate, if the price of petroleum dips below the price of ethanol, retailers can opt not to sell the ethanol blend.

Missouri is not required by law to label how much ethanol is used in its gasoline, so consumers can't tell exactly what percent mixture they are receiving at the pump.

James Kaufman, project director of the Economics and Management of Agrobiotechnology Center of the MU Department of Agricultural Economics, said falling prices of petroleum has affected profitability for ethanol producers.

Many gas stations do offer the E-85 ethanol blend, which is 85 percent ethanol. While regular vehicles are considered capable of running on the 10 percent blend, only fuel-flex vehicles can run on E-85.

Even when ethanol is less costly than gasoline per gallon, the actual cost efficiency varies because ethanol gets fewer miles to the gallon than gasoline. According to the U.S. Department of Energy, ethanol produces 34 percent less energy than a regular gallon of gasoline. But with a national mandate in place to increase alternative energy sources, ethanol producers must continue to exist.

"The interest is continuing to find new and more efficient energy sources," Kaufman said. "I think ethanol is one of those."

Ethanol continues to be controversial means of energy, with some supporting it as an attempt to find clean energy sources, but others blaming it for a rise in food prices.

Sen.-elect Kurt Schaefer, R-Columbia, said he continues to support the mandate. He said he does not believe people will turn so quickly away from alternative energy sources simply because the price of gasoline has dropped.

"It was just a few short months ago that we were at record high prices, and we could be back to that point very soon," he said.

With six ethanol plants in operation in Missouri as of November, ethanol has become a large business for the state. In August, Missouri was ranked as the 13th largest producer of ethanol in the U.S., according to the Renewable Fuels Association. Missouri currently produces 241 million gallons of ethanol per year.

"I do think that we need to look at those resources that we can develop within the state of Missouri," Schaefer said.

One addition Schaefer would propose for the mandate is periodic reviews of the law every five to seven years.

"I think you always have to step back and ask is it serving the purpose it was meant to serve," he said.

On the other hand, Rep.-elect Mary Still, D-Columbia, said she does not support the mandate.

She expressed her views on the mandate while she was touring the POET Biorefining ethanol plant in Macon.

"I don't think you need to have a mandate," she said. "I think it's a free market issue."

Still also mentioned that she did not support the bill because of Gov. Matt Blunt's family connections with ethanol companies.

Andrew Blunt, a state-level lobbyist and Matt Blunt's brother, was part of a group of investors who invested in Show-Me Ethanol LLC., an ethanol plant in Carrollton.

Oren Shur, a spokesman for Gov.-elect Jay Nixon's transition office, said Nixon has no plans to repeal the mandate when he gets into office.

"Governor-elect Nixon supports a wide range of energy solutions including ethanol," Shur said. "All new technologies must be on the table."