Gas stations which do not install E-85 pumps would start to lose a state tax incentive in 2011 if a bill that cleared its final legislative hurdle becomes law.
The bill’s designed to promote the use of ethanol-blended fuels, and if a station does not install a tank and pump for the higher-concentration of ethanol — E-85 — then the state tax break on E-10 — the 10-percent blend that’s readily available today — would decline.
Representative Steven Olson, a Republican from DeWitt, says it’s a “means of encouraging” retailers to offer E-85 to the motoring public. “If they don’t make some effort to try and make a change, the tax credit does slowly slip away from them,” Olson says.
Legislators and interest groups like the Farm Bureau and the Corn Growers Association have been quibbling over the details of this bill for the past three months but with a shared goal of increasing ethanol use. “It’ll be interesting to see actually what does happen,” Olson says.
The price of E-85 has been substantially higher than other motor fuels this year because out-of-state demand for ethanol has grown and the supply can’t keep up.
“What’s wrong with Iowa being an exporter of E85?” Olson asks. One the supply and demand even out, Olson says the next step will be convincing folks to buy so-called “flexible-fuel vehicles” that can burn the higher-concentration of ethanol.
A fraction of motor vehicles on the roads today are capable of burning E-85 and only 30 stations have E-85 pumps.