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Retailer says insurance requirements a snag in E15 switch

JOHNSTON — A regulatory change touted as a less expensive way for retailers to switch to selling gas with a 15 percent blend of ethanol is a key part of the debate over the governor’s proposed ethanol mandate.

Early this year, Governor Kim Reynolds called for a state law requiring all Iowa gas stations to sell gas with a 15% ethanol blend by 2026. The proposal stalled this spring, but supporters hope to revive it. Monte Shaw, executive director of the Iowa Renewable Fuels Association, says his group does not support a mandate that would force retailers to crack into concrete and replace the underground fuel tank that leads to pumps above.

“But there’s a waiver provision in this legislation that would say if you just have to make some minor modifications above ground, we have a state grant program that helps you with that,” Shaw says. “A lot of times, these are $8,000-$10,000.”

And Shaw says already existing regulations from the state fire marshal allow pumps dispensing gas with 10% ethanol to switch to E15. Mark Cobb of Brighton owns nine gas stations in eastern Iowa and is installing new pumps to offer E15 to his customers at all locations. He says it costs far more than the $10,000 Shaw suggests.

“I’d have been thrilled if I could have brought E15 into my stations for that kind of money,” Cobb says. “…I have to have insurance on my system…They require that I have a dispenser that is UL listed for E15, which requires a replacement.”

Cobb, who is an investor in a biodiesel plant, too, says he’s not opposed to efforts to “promote” the sale of biofuels.

“However, I’m not a big fan of a mandate or being forced to sell something that maybe consumers aren’t ready to accept yet,” Cobb says.

And Cobb says premium gasoline that has no ethanol in it must be used in some vehicles on the road today in order to maintain the warranty. Iowa Corn Promotion Board vice president Kelly Niewenhaus, a farmer from Primghar, says he’s optimistic the two sides can find common ground in 2022.

“I’m not a fan of mandates either,” Niewenhaus says, “but we need to grow this industry and since Iowa is the largest corn producing state in the United States, the largest ethanol and biodiesel producing state in the United States, we need to send a message to the rest of the country that we support our industries and what we do for our economy in the state of Iowa.”

The three men made their comments on this weekend’s “Iowa Press” program on Iowa PBS. Three months ago, Governor Reynolds said she’d ask representatives of ag groups and gasoline retailers to meet this summer and fall, to try to come up with a compromise Iowa Renewable Fuels Standard. There’s been no public announcement that a working group has been formed or is meeting.


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