Bipartisan Iowa House majority approves ethanol mandate

DES MOINES — The Iowa House overwhelmingly supported a “big deal” Wednesday to boost the renewable fuels industry and farmers by mandating that retailers offer products to consumers containing more ethanol.

“This is a huge deal,” House Ways and Means Chair Lee Hein, R-Monticello, said just before the House voted 82-10 to require fuel retailers to begin offering E15, a higher blend than the E10 fuel more typically found as the gas pump.

Passage of House File 2128 will not only spur demand for ethanol and produce savings for motorists, but promote use of the Iowa corn-based ethanol beyond the state’s borders, backers said.

“Iowa is the leader in developing it and this is a big deal where we’re standing up and moving this forward,” Hein said.

If the bill, a priority for Republican Gov. Kim Reynolds, is approved next by the Iowa Senate, more than half of Iowa fuel retailers would be required to offer E15 on at least one pump, and after January 2023 new stations and those that install new pumps would have to offer E15 from at least half of their dispensers.

Small retailers with outdated or incompatible equipment would be eligible for waivers.

Democrats were happy to join the majority party because Iowa farmers and the ethanol industry are “too important to us to let politics get in the way,” said House Minority Leader Jennifer Konfrst, D-Windsor Heights.

A key to their support was an amendment protecting “mom and pop” retailers from taking on unsustainable debt or going out of business to comply with the requirement

“We also were really glad that we were able to offer the amendment and work with Rep. Hein because that was our idea to help protect small retailers,” she said. “It was really important to us to find that middle ground.”

“We didn't want to jeopardize them,” House Speaker Pat Grassley, R-New Hartford, said about the small retailers that will be able to apply to the Iowa Department of Agriculture and Land Stewardship for waivers that will “protect our small stores, especially in rural Iowa.”

Rep. Chuck Isenhart, D-Dubuque, who voted for HF 2128, reminded colleagues during the Legislature’s first floor debate of the 2022 session that the ethanol standard comes at a cost to state taxpayers.

According to an analysis by the Legislative Services Agency, the measure will increase taxpayer subsidies to the ethanol industry by $182 million over six years and a reduction of nearly $56 million in motor fuel taxes the state collects over eight years.

The ethanol industry predicted that as E15 becomes the new normal like E10 is today, consumers will save between 5 and 10 cents a gallon, Iowa household income will increase $73 million annually and nearly 4,000 jobs will be created.

Despite the support of both party leaders, seven Republicans and three Democrats voted against the bill.

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