Missouri mandates ethanol blend

By EPM Staff Writer Anduin Kirkbride McElroy | May 01, 2006
Missouri lawmakers jumped on the ethanol bandwagon May 11 when the general assembly passed a renewable fuel standard that requires all gasoline in the state to contain at least 10 percent agriculturally derived ethanol, effective Jan. 1, 2008.

The requirement applies to all fuel—excluding aviation fuel and premium gasoline—but only when the price of ethanol is equal to or less than the price of unblended gasoline. This "consumer protection" clause was included to guarantee that the customer will always have the cheapest gasoline, according to state Rep. Bob Behnen, who cosponsored the bill with Reps. Brian Munzlinger and Peter Myers. "It also tells the ethanol industry that we will be there to help move the fuel [until the industry is] doing well enough [and does not] need the booster help," Behnen said.

"Ultimately what we have is a market driven mandate," he continued. "Usually the problem people have with mandates is that, at some point, it supports a group beyond when they need to be supported." However, Behnen pointed out that the consumer protection clause does not support the industry when prices are high and the industry is doing well. But if prices are low, this legislation also serves to provide a supply for an industry that strengthens the agricultural and livestock competitive advantage of the state.

Missouri follows Minnesota, Hawaii, Montana and Washington in mandating statewide ethanol blends. Iowa Gov. Tom Vilsack is expected to sign a similar bill any day. Behnen said his state's legislation was developed in order to work best in Missouri. In addition to the consumer protection clause, the legislation includes a provision so that fuel suppliers' existing contracts will be protected.

The bill passed 29-4 in the Senate and 147-4 in the House. Behnen told EPM that the legislation gained momentum because the governor was behind the issue. Last summer Missouri Gov. Matt Blunt announced he would prioritize the enactment of an E10 requirement at the grand opening ceremony of Mid-Missouri Energy, a 40 MMgy ethanol plant in Malta Bend. "I am proud your elected leaders have met my call for an E10 standard," Blunt said in a written statement, adding that his campaign promise has been fulfilled.

A 10 percent mandate results in an expected demand of over 300 MMgy of ethanol. The enactment date was chosen to give time for in-state production to ramp up, according to Behnen. There are three plants currently producing ethanol, including Mid-Missouri Energy, and one under construction. The Malta Bend plant is planning an expansion next year. Company President Ryland Utlaut told EPM that he fully expects state production to meet the demand created by the renewable fuel standard.

The bill also clarified eligible recipients and a timeline for the Missouri qualified biodiesel producer incentive fund. The language is designed to encourage production that is either majority owned by Missouri farmers or that uses agricultural feedstock produced in the state. This language is similar to that which applies to ethanol production and was enacted last year.