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Ethanol pumped in all states but not everyone sold on it
Monday April 21, 12:22 pm ET

Ethanol now pumped in every state but some still want straight gas

BELFIELD, N.D. (AP) -- Ethanol has a toe-hold in every state, pushed by increased production, government subsidies and people looking to save a few pennies at the pump.

"For the farmer, it's another market for our product -- this is a good thing," said Mike Clemens, a Wimbledon farmer and a director of the North Dakota Corn Growers Association.

"Corn is an American-made product that we convert into an American-made fuel," Clemens said. "It lessens the reliance on foreign oil, helps the economy and helps the farmer -- I don't know why anybody wouldn't like it."

Yet not everyone is sold on it -- many motorists still are willing to pay a premium for gasoline without the corn-based fuel additive if they can find it.

"Ethanol is not my favorite thing, but I will use it if I have to," said Kenny Doll who was filling up recently at a gas station that offered only ethanol blends. "I think I get a little better gas mileage using regular gas."

Doll doesn't like that ethanol is helped by a 51-cent-per-gallon federal subsidy, which has drawn criticism in Washington.

"I'm paying to pay to use it," Doll said.

"Five years ago, ethanol was pretty much a Midwest product," said Ron Lamberty, a vice president of the Sioux Falls, S.D.-based American Coalition for Ethanol. "Now it's nationwide -- I don't know of a state where you can't get it.

"History has indicated that once ethanol gets into a market, it stays there," Lamberty said. "This is a great thing, and something we've been working for."

New York and California began selling ethanol blends in 2004, Lamberty said. Stations in the southeastern United States were the last to offer it at the pump, he said.

Glennie Bench, a vice president of Bainbridge, Ga.-based Southwest Georgia Oil Co., said ethanol use in southern Georgia, Alabama and Florida has been hampered by a lack of infrastructure.

Bench said her company built a 100,000-gallon bulk storage facility to supply ethanol to those states over the past few months. Tanker trucks come from Atlanta to keep the storage tank topped off, she said.

"Stations are wanting to offer it," she said. "It's a way for consumers to show commitment for alternative fuel ... but they won't pay more than a 3-cent premium for an alternative fuel."

The demand for ethanol has been driven by the price, which is typically a nickel to a dime cheaper per gallon than straight unleaded gasoline, industry officials say.

"People are shopping with their pocketbooks -- unless or until it doesn't become competitive, it will continue to sell," said Jim Smith, president of the Florida Petroleum Marketers and Convenience Store Association.

Not everywhere, though.

"Absent a law that forces you to sell ethanol blends, you're going to have retailers who refuse to put it in," Smith said.

One of them is Dan Heiser, owner of Dan's Interstate Conoco in Belfield, in southwestern North Dakota off Interstate 94 in North Dakota's Badlands. His dislike of ethanol prompted him to put "Want Mileage -- No Ethanol" on his station's marquis. He said business has increased since he posted the sign recently.

Heiser said vehicle mileage is reduced by about 10 percent using ethanol, a claim denied by the ethanol industry.

"You might save $1 on a fill-up, but it will cost you more in mileage," Heiser said. "People are shopping the lowest price but it's not apples to apples -- it's comparing apples with unleaded."

Lamberty said studies by his group and others found that mileage is reduced minimally with vehicles burning a gasoline blended with 10 percent ethanol.

"On average, there is a 1.5 percent difference in mileage," Lamberty said. "When you take price into consideration, no way is unleaded a better deal."

Cars run differently on different fuels, and customers should have the option to buy ethanol, he said.

Lorrie Hecker, a spokeswoman for Woodbridge, N.J.-based Hess Corp., said every one of the company's 320 stations in Florida is selling only ethanol-blended gasoline. She said the company began converting stations over to ethanol in November and finished in March.

"It's been a nonevent for customers," Hecker said. "Generally, people don't have an issue with it or are not aware of it and haven't noticed a difference."

Cy Fix, general manager of Cenex stations in Bismarck and Mandan, said he's been using ethanol since 1975, with no noticeable difference in gas mileage or abnormal engine wear.

Fix said his stations offer regular unleaded and ethanol-blended gasoline, and is careful to label them as such. "Some people don't want ethanol or trust it for whatever reason," he said.

Fix's stations also offer an 85 percent ethanol blend, or E-85. Vehicles using E-85 typically have a 15 percent or more cut in mileage. He said the price of E-85 has to be at least 40 cents cheaper a gallon than regular unleaded to make it economical.

Ethanol production this year is expected to be 9 billion gallons, up from 6.5 billion gallons last year and 5 billion gallons in 2006, Lamberty said.

The U.S. has 154 ethanol refineries, up from about 120 at the beginning of 2007, Lamberty said. Fifty-five additional ethanol refineries are being built, and seven of the existing plants are being expanded, he said.

Mike Rud, president of the North Dakota Petroleum Marketers Association, said ethanol made up 70 percent of the total gasoline gallons sold in the state in February, up 10 percent from the month before. Ethanol use was nearly nil in 2001, he said.

"When the prices are lower, no doubt people will take the lower-priced product," Rud said.

While the use of ethanol is up, total fuels sales have been down in the state, he said. North Dakota motorists purchased 367 million gallons of fuel last year, down about 10 million gallons from 2006.

"North Dakotans are very conservative and thrifty -- they're staying closer to home and doing less traveling," Rud said.

Drivers can increase fuel economy by slowing down, Rud said.

"But good luck finding somebody who will drive 55 on the interstate, or legislatures that are going to support it," he said.

Source: Associated Press

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