Ethanol at the pump

Tuesday, January 8, 2008

The push for alternative fuel for motorized vehicles took an official turn in Missouri with the start of 2008. Missouri became the third state in the nation to require a 10 percent ethanol blend, as long as it doesn't cost more than unblended gasoline.

While many motorists may have thought this requirement would change the gasoline being sold at pumps, most gasoline retailers had made the switch months ago, because it allowed them to sell fuel at lower prices. There was no notice to consumers, because in 2002 Missouri repealed the requirement that pumps dispensing blended fuel be labeled.

The state mandate for the gasoline-ethanol blend was prompted by pressure to find alternatives to petroleum-based fuels. But it also was helped along considerably by agriculture-based groups to spur more demand -- and higher prices -- for corn. The ethanol push also has given rise to the construction of ethanol plants throughout the state. Several are planned in Southeast Missouri.

For now, prices of ethanol are low enough to spur demand, thanks to generous government subsidies. It will be interesting to see how the marketplace responds to this fuel initiative and to other efforts to develop alternative fuels.

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