Using Ethanol To Fuel Missouri's Economy Sparks Debate

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LADDONIA - Drivers could see new options at the gas pumps in 2014. Federal regulations require an increase in biofuels starting next year.

Six ethanol plants in Missouri turn corn into fuel for your car. John Eggleston, a farmer in Northern Missouri, sells his corn to the POET Ethanol Plant in Macon.

"It helps in the economics of what we receive as far as income because ethanol does help the overall market," Eggleston said. "Ethanol has made the producer able to raise more acres of corn as long as the increasing technology is there to make higher yields."

Steve Murphy, manager of Laddonia's POET plant, says the Renewable Fuel Standard could bring more money into Missouri's economy.

"In Missouri, agriculture is the biggest industry so it can have a huge ripple effect," Murphy said.

The Laddonia plant receives all of its corn from Missouri farmers and generated 180 million dollars of economic activity last year.

"In Audrain County and in other rural counties, that's a big economic engine for fertilizers, for seeds, for fuel for all of the supplies farmers need and we provide a local source for them to sell their product," Murphy said.

"We are a big consumer of gasoline and yeah, it's going to have a tremendous impact because of the volume of gasoline that we have to maintain every year," Eggleston said.

Nearly all of the ethanol produced at Laddonia stays in state. Missouri currently mandates ten percent of ethanol in regular gasoline. E85, which contains 85% ethanol, is an option at some gas stations.

Opponents of increasing ethanol use say it would increase food prices, because farmers are working to produce crops for gas tanks instead of grocery stores.

"There are several ways the effects of the Renewable Fuel Standard on a national market could affect Missouri in terms of the corn prices that farmers get, the prices for corn or the distillers grains that farmers or feed lots might pay," Wyatt Thompson, MU Professor at Food and Agricultural Policy Institute (FAPRI), said.

Thompson says increasing ethanol use could affect the price of food, but it would be small.

Murphy adds that the corn used to make ethanol is not a sweet corn that you would buy at the grocery store. It's corn used for animal feed, which the plant sells back to farmers.

"Beef poultry pork prices can be affected but the acres planted have caught up with the demand the ethanol industry has put in," Murphy said.

AAA also released a statement warning buyers: "AAA's automotive engineering experts believe that sustained use of E15 could result in costly problems such as accelerated engine wear and failure, fuel-system damage and false "check engine" lights in some cars. An overwhelming 95 percent of consumers surveyed by AAA were not familiar with E15, indicating a strong likelihood of consumer confusion leading to misfueling."

Filling up with E15 also causes your car to get worse gas mileage. The Environmental Protection Agency approved the use of E15 for all cars newer than 2001.

Thompson says it's unclear whether the economy can meet the demands E15 might bring.

"Given what was going on in the markets it seems like the mandates were running against the blend wall and it was becoming harder to mandate," Thompson said.

The blend wall is the limit on the amount of ethanol that can be used beyond E10. Thompson's research on this issue is ongoing.

"The EPA gave a signal that it might reduce the mandates, which it has the authority to do in 2014, so there's been a lot of debate about what sorts of levels might be appropriate," Thompson said.

The Missouri Department of Agriculture recently proposed a rule change to add an E15 fuel, a blend of 15% ethanol in gasoline. Lawmakers decided in an October hearing they would have to go through the legislative process to approve the rule change.

If Missouri adds an E15 option, it would become the tenth state to do so. The EPA can decide how ethanol is mandated nationally and Missouri lawmakers could bring ethanol up for debate at the State Capitol when they convene in January.