Proposed fuel mandate would cause problems for Iowa retailers and consumers

My mother makes it a point to avoid using ethanol when filling the tank in her 2012 Lincoln. The vehicle’s previous owner used only non-ethanol gasoline, and she feels it is best for the engine to continue that practice. Someone with more automotive expertise might tell her that her car could safely accommodate ethanol-blended fuel, but like the vehicle itself, the decision to use alcohol-free gas is hers. Unfortunately, a controversial mandate proposed in the Iowa Legislature threatens to limit the choices that my mother and many other Iowans make at the pump.

Senate File 549 would designate non-ethanol gasoline as “restricted use gasoline.” While it wouldn’t ban non-ethanol gasoline outright, it would require labeling affixed to the pumps that could potentially mislead consumers on their ability to use it. Worse, the bill’s companion in the House, HF 859, allows only premium grade non-ethanol gasoline to be dispensed, which typically sells for an average of 60 cents more per gallon.

The 10 percent ethanol minimum is just a starting point. Depending on the version, beginning as early as January 2025, the requirement for the minimum blend of ethanol increases to 15 percent, or E15. This means some costly infrastructure upgrades for gasoline retailers.

According to the Fuel Choice Coalition, described by The Gazette’s Erin Murphy as “a coalition of retailers, wholesalers, fuel distributors, transportation groups and others,” the costs of updating Iowa’s fuel infrastructure could easily top $1 billion. “Currently,” their website states, “the vast majority of fueling stations in rural Iowa are unable to offer higher blended biofuels due to requirements mandated by the EPA.”

Regardless of stance on the legislation, all invested parties agree that ethanol is vital to Iowa’s livelihood. FUELIowa, a fuel industry association staunchly opposed to the bill, agrees that “renewable fuels like ethanol and biodiesel are critical to our economy. We have long shared a goal to expand our infrastructure to move more biofuels across the state.”

Biofuels are popular with consumers, too. An April report from the Iowa Department of Revenue showed that ethanol blends accounted for 85 percent of all fuel sales in Iowa in 2020.

But the increased ethanol usage proposed in this legislation isn’t voluntary. It’s mandatory. Retailers could have their licenses revoked by the state if they are unable to afford the cost of complying. Violations of the applicable part of Iowa Code are already subject to civil and criminal penalties. Though financial incentives would be available for retailers to upgrade their sites to meet new storage requirements, the text of the legislation indicates that those incentives won’t come close to the actual cost of the repairs.

Also troubling is the impact the mandate will have on consumers whose choices represent the other 15 percent of Iowa’s fuel sales. Those who remember long lines at gas stations after the Aug. 10 derecho might wince at a law that could hamper the availability of fuel, especially the type we needed for our generators and chain saws. Federal regulations don’t even allow the use of ethanol in vehicles made before 2001, so a family living paycheck-to-paycheck might not appreciate paying more to gas up their 1998 Dodge Caravan if premium fuel is suddenly their only option.

The biofuel mandate appears dead as this legislative session nears completion. But the fight for its passage in 2022 has only begun. Ethanol might be good for Iowa, but so is consumer choice. If only we could embrace both.

Althea Cole is a lifelong resident of the Cedar Rapids metro area. Outside of her various freelance projects, she devotes much of her time to engaging in political issues and volunteering for worthwhile causes.