Missouri ethanol rule on track to take effect

Missouri ethanol rule on track to take effect

Missouri ethanol rule on track to take effect

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by David A. Lieb, AP

KMOV.com

Posted on March 2, 2014 at 9:54 PM

JEFFERSON CITY, Mo. (AP) -- Missouri motorists could be able to buy a higher blend of ethanol gasoline as early as this summer because of a new policy pushed by Gov. Jay Nixon over the unsuccessful objections of some lawmakers.

The state has long been a leading promoter of ethanol, a corn-based fuel that is blended with regular petroleum gasoline. Missouri was among the first states in 2006 to mandate that most fuel contain 10 percent ethanol.
 
But the latest ethanol expansion, which allows gas stations to sell a 15 percent ethanol blend, has sparked debate because of the way it's being enacted. It's not required under a new law, as was the case with E10, but rather is the result of a Missouri Department of Agriculture rule change championed by Nixon.
 
In a written statement to The Associated Press, the governor said he's pleased the rule finally will be taking effect.
 
"Expanding the use of renewable fuels like E15 is a proven strategy for boosting our nation's energy independence and bringing more dollars back to farming communities across Missouri," Nixon said.
 
The price of E15 could be several cents a gallon cheaper than the E10 gasoline currently dispensed from most pumps. That could make it attractive to consumers. It also could increase the demand for corn, benefiting farmers. The U.S. Environmental Protection Agency has approved the use of E15 for most vehicle models from 2001 forward.
 
But not everyone agrees with Nixon about the benefits of E15. Many vehicle manufacturers warn that it could harm engines and void the warranties of vehicles not specifically designed to handle fuels with higher ethanol contents.
 
With that controversy as a backdrop, the Legislature's Joint Committee on Administrative Rules voted last October to temporarily block the implementation of Missouri's proposed rule allowing the sale of E15 gasoline. The committee said the rule went beyond what is allowed under the 2006 ethanol law.
 
On the same day the rule was blocked, the Missouri Corn Growers Association -- which had supported the rule -- sent a letter to the Agriculture Department asking it to withdraw the rule because of concerns over its legality. The letter, obtained under a Sunshine Law request by The Associated Press, said the corn association would instead work with legislators to try to pass an E15 law.
 
Over the past decade, legislators have voted to temporarily block 15 proposed rules. State agencies typically have responded by dropping or changing those proposed rules.
 
But Nixon directed his Agriculture Department to press forward with the proposed E15 rule.
 
To permanently stop the rule, the full Legislature would need to pass a resolution by Monday. But that isn't going to happen, because the resolution never even made it out of a Senate committee. That means the ethanol rule will be back on track to take effect.
 
If the Agriculture Department acts quickly to publish the proposed rule, it could take effect as soon as May 30.
 
Missouri's roughly 3,800 gas stations then will have to choose whether to sell E15 gasoline. As of January, the fuel already was being sold in 59 gas stations in a dozen other states -- mainly in Missouri's corn-growing neighbors of Iowa, Illinois, Kansas and Nebraska, according to the Renewable Fuels Association.
 
MFA Oil, who runs about 80 convenience stores and 160 unattended fueling sites in Missouri, had lobbied in support of the E15 rule. When it takes effect, the company will seriously consider selling the fuel, said James Greer, MFA Oil's western regional vice president.
 
"E15 will create an economic engine for cheaper gasoline," Greer said.
 
But the Missouri Petroleum Marketers and Convenience Store Association, which opposed the E15 rule, is urging its members to be cautious. Among other things, the association cites concerns that gas station owners could be targeted with liability lawsuits by motorists who put E15 fuel into vehicles that subsequently suffer engine problems.
 
"Until some of those underlying issues are dealt with, I would dare say that the vast majority of my members will not be selling E15 in the near future," said association Executive Director Ron Leone.
 
State Sen. Eric Schmitt, who led the failed effort to block the E15 rule, said he hopes the Agriculture Department will later adopt additional rules regarding fuel-pump warning labels for consumers, safety measures for fuel storage tanks and perhaps some guidance for who is at fault if the use of E15 voids a vehicle warranty. He continues to believe the E15 rule is insufficient and improper.
 
"It creates an undue burden for drivers across the state who have vehicles that aren't ready for this yet," said Schmitt, R-Glendale.

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