FEBRUARY 2008

Missouri mandates use of ethanol

Missouri became the third state to mandate that 10 percent ethanol be mixed with gasoline effective January 1. Missouri joined Minnesota and Hawaii in requiring the use of ethanol.

Ethanol-blended gasoline, referred to as E10, is becoming common due to federal standards for alternative fuel usage.

Missouri’s transition to ethanol blended gasoline was expected to be smooth since many gasoline stations had already made the switch in 2007. Federal renewable fuels standard calls for oil companies to purchase 4.7 billion gallons of ethanol and biodiesel in 2007. An oversupply of ethanol, along with government tax incentives for ethanol, has caused ethanol-blended gasoline to be approximately $.05 to $.07 cheaper per gallon. This motivated Missouri gas stations to make the switch to ethanol ahead of the mandate.