Falling prices in Missouri allow sale of gas without ethanol

SPRINGFIELD, Mo. -- The recent drop in fuel prices has triggered a provision in the state's ethanol mandate allowing gas stations to sell fuel without the corn-based additive.

Most Missouri retailers stopped adding ethanol to their fuels in the last four weeks, said Ronald Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association.

"The economics in the past three to four weeks have changed where unblended fuel is less expensive than E10," he said.

Since January, state law has required that Missouri retailers blend all fuel with 10 percent ethanol, or E10, if the corn-based fuel was cheaper than regular gasoline. The opt-out provision, which Leone said his group supported, ensures that consumers will always receive the cheapest available price for fuel.

Missouri has some of the cheapest gasoline in the country, averaging $1.57 per gallon, according to AAA. By comparison, the national average is $1.88 per gallon.

Ethanol advocates have been surprised by the rapid decline in gas prices, which reached $3.50 per gallon and above this summer.

Cody's Convenience stores in southwest Missouri were selling E85 -- a blend of 85 percent ethanol and 15 percent gasoline -- at $1.53 per gallon on Monday, two cents more than regular gasoline.

"The gas price has really dropped tremendously and ethanol has not quite kept up with the pace," said Ron Hayes, director of the Missouri Department of Agriculture's weights and measures division, which monitors gasoline sales in the state.

The drop is also affecting the state's six farmer-owned ethanol plants where the price of oil "has really slowed down, if not stopped, any additional expansion of capacity," said Gene Millard, president of the Missouri Renewable Fuels Association.

"Plants are just not going to start up producing a product that's showing negative pricing margins," said Millard, chairman of a farmer-owned ethanol plant in northeast Missouri.

Millard added that the wildly fluctuating price of corn this year has hindered ethanol's ability to compete with regular gas prices, ranging from $7 a bushel in early July to $3.50 now.

"In some respects, we've got to take a long-term view of how were going to address energy price volatility," Millard said. "Nobody knows what the future holds, that's for darn sure."