Iowa state senate head proposes white-labeling E10 to boost ethanol sales

February 15, 2008

In Iowa, State Sen. Jack Kibbie, president of the Iowa Senate, has proposed giving gas stations the right to remove labeling from E10 ethanol blended fuel, as a measure to stimulate ethanol usage. A similar move in Kansas has resulted in higher ethanol sales. Kibbie told the Des Moines Register that E10 ethanol is stalled at a 73 percent usage rate in Iowa, in part because of resistance to ethanol from out-of-state residents.

Iowa Senator Chuck Grassley recently called on President Bush to direct the Environmental Protection Agency to approve E15, E20, E30 blends. Grassley said that with E85 not gaining acceptance, the US had to find other ways to ensure a market for higher blends of ethanol.
Iowa lawmakers expressed disappointment this week that, two years after landmark legislation was passed in support of E85 conversion, E85 represents only 0.1 percent of Iowa fuel sales. 7.5 percent of Iowa fuel comes from renewable sources, about the same as two years ago when Gov. Vilsak signed a measure allocating $13.6 million to E85 conversion, and mandating that 25 percent of the state’s fuel usage come from renewable sources by 2020.

Lawmakers noted that E85 is available in half of Iowa’s counties, with only 100 pumps statewide, and that only 12 percent of new cars sold in Iowa last year are flex-fuel ready, mostly pickups and SUVs.

Even in Iowa, E85 is tough to find, and the general manager of the East Central Iowa Cooperative said “I don’t think flex-fuel even passes through someone’s head when they are buying a vehicle around here”. The sales manager of a Waterloo, IA Chevrolet dealership said that rising flex-fuel vehicle numbers are “mostly a coincidence”.

Part of the problem is a poor cost-benefit performance. A new cost-benefit analysis by researcher John Graham at the Pardee Rand Graduate School found that E85 scored the worst among all fuel options. Diesels performed the best, saving $2300 over a vehicle’s lifetime compared to regular gasoline. Hybrids were a close second, while E85 cost $1600 for fuel over vehicle lifespan. The study’s authors did not disclose the mileage standards used in the study, or the vehicles studied

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Written by Jim Lane · Filed Under Policy