KC denied exemption from sale of ethanol

Saturday, June 14, 2008

JEFFERSON CITY, Mo. -- Gov. Matt Blunt announced Friday that he is denying requests to exempt Kansas City from the sale of ethanol-blended gas.

The Mid-America Regional Council and the Greater Kansas City Chamber of Commerce had asked the governor to issue a waiver from a state law that requires most of Missouri's gas to include a 10 percent ethanol blend whenever the alternative fuel is cheaper than regular gas.

Ed Peterson, the co-chairman of the regional council's Air Quality Forum, said Friday that E-10 increases lower-level ozone.

"The result of that decision by the governor is that there's likely to be more pollutants in the air in the region here and that will result in a higher level of ozone," said Peterson, who is also a Johnson County, Kan., commissioner. "It's probably impossible to calculate or quantify that impact because we don't know how much people are going to drive."

The law requiring E-10 gas blends took effect in January 2007. But attitudes toward the fuel have begun shifting and several lawmakers this year supported legislation that would have repealed the mandate.

Ethanol is essentially a grain alcohol made by turning plant starch into sugar and fermenting it.

Blunt, in a letter dated Friday rejecting the waiver, said it's in Missouri's best interest for the Kansas City area to be subject to the ethanol mandate.

Blunt said there are environmental, consumer and regulatory benefits to keeping the mandate intact. He said it would be difficult for Kansas City gas stations to suddenly stop selling E-10 because federal and state clean air laws would require that the gas stations essentially drain their storage tanks. Also, Blunt said ethanol lowers certain vehicle emissions and could provide savings to consumers paying nearly $4 per gallon for gas.

The governor also predicted that "allowing a marketer not to sell E-10 for air quality reasons is likely to have very little affect on the sale of E-10." That's because lifting the mandate wouldn't ban the sale of E-10, and Blunt assumes that gas marketers choose whether to sell ethanol or traditional gas based primarily on cost.

An economic analysis prepared by the consulting firm LECG estimates that Missouri motorists will save 9.8 cents for each gallon of E-10 they use in 2008. That study, paid for by the Missouri Corn Merchandising Council, also predicts that over the next decade E-10 will save consumers $54 per year -- or $214 million for the entire state.

The Missouri Corn Growers Association, among the biggest backers of the ethanol mandate, issued a statement praising Blunt's decision to reject the waiver. The commodity group's president, Mike Geske, said in a written statement that ethanol is "not only better for the environment, but better for consumers as well."

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