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JEFFERSON CITY-Any hopes of repealing an ethanol standard that went into effect last year were swatted down yesterday at a Missouri Senate Agriculture Committee hearing.
The standard requires gas stations in the state to blend gasoline with a 10 percent mixture of ethanol. The standard was passed in 2006 and went into effect Jan. 1, 2008.
The sponsor of the bill, Sen. Matt Bartle, R-Lee’s Summit, admitted to committee members that his bill had little chance of making it out of committee but wanted a chance to debate the merits of government intervention.
“Everyday I feel like my political views go out of style,” Bartle said in his opening statements. “I wonder what happened to that old notion of letting the free market decide.
“We declared as policy makers that we knew better than the market of what fuel (consumers) need to be buying,” he said about the 2006 bill that is now law. “I didn’t need government telling me to buy it.”
Bartle said the state was “picking winners and losers,” instead of letting the market decide. He said ethanol was already available before what he calls a mandate by government.
Sen. Bill Stouffer was chief sponsor of the bill and said the law is not a mandate but is actually a standard. Stouffer said retailers only have to purchase ethanol if the price is cheaper than gasoline.
“Senator, you are really getting into government speak when you call this a standard when the law requires its use,” Bartle said. “It’s not a standard. Let’s call it what it is.”
Some Senators took exception to Bartle’s charge that the standard is a mandate. Democratic Sen. Wes Shoemyer told Bartle that most of the legislation he focuses on could be considered mandates. Bartle is known for going after businesses that deals with alcohol and sex.
“I don’t think you are as far off on mandates from those of us who believe this is a true mandate that is good for people and good for the state,” Shoemyer said. “In fact, you might have some legislation perceived as a mandate. Would I be right?
“You’re willing to interfere with business because you think it’s the right thing to do just like many of us,” Shoemyer added. Bartle brushed off Shoemyer’s statement and said he regrets giving other industries an unfair advantage.
“I’m ashamed of votes I have taken here which have given head starts to people in the market place,” Bartle said.
Committee Chairman Sen. Dan Clemens told Bartle that mandates are everywhere in government and in the past industries like dairy have been hurt when government didn’t step in. He said the state needs to protect its biggest industry.
“I don’t agree with you because I think government is sometimes required to get involved especially when it’s the number one industry in the state,” Clemens said.
Bartle argued that the ethanol mandate has driven up the price of food. Stouffer said if that is the case, grocery store prices have not fallen in line with lower ethanol prices.
“If ethanol pushed the prices up, then why in the world have they not come down?” Stouffer asked.
Missouri Corn Growers C.E.O. Gary Marshall testified that higher food prices can be attributed to high fuel prices, not ethanol production. He said food prices are a national issue not a Missouri issue.
“The price of food is no different in Overland Park, Kan. than it is in Kansas City where the ethanol requirement is in place,” Marshall said.
Marshall said the 900 million bushels used to produce ethanol is fairly insignificant to the total corn production. He said Missouri exports nearly 25 percent of corn due to abundance.
Bartle said that ethanol production is expensive and taxpayers are footing the bill with subsidies. Stouffer said big oil companies receive millions in subsidies each year and those subsidies were an investment in consumers. He said ethanol contributed nearly seven percent of fuel last summer when oil prices were high. He said Missouri enjoyed prices well below the national average for fuel.
“Missourians got an excellent return on their investment,” he said. “It would have been extremely expensive to replace that seven percent with high oil prices.”
Stouffer went on to say that it also is a social investment that creates jobs in Missouri instead of sending money overseas.
Missouri farmer and former agriculture broadcaster Gene Millard said development and high paying technical jobs are coming to rural communities because of ethanol plants in the state.
Oil company lobbyist Harry Gallagher argued that ethanol was causing problems in fuel systems in cars. Supporters countered his statements with studies that show that most of the time it is people putting the wrong fuel into their cars.
Stouffer and others argued that ethanol is also better for the environment. Bartle asked, if so why are provisions in the bill to stop production for air quality reasons?
“We allow the governor to flip the switch off on the ethanol mandate if air quality gets so bad,” he said. “I wonder why we had to do that?”
Bartle also argued that the bill prohibits other technologies from being utilized.
The committee took no action on the bill.
Photo: The ethanol that is pumped out of this terminal in Carrollton is made at the Show Me Ethanol Plant in the background. Legislation discussed yesterday in the Missouri Senate Agriculture Committee is critical to ethanol’s ability to compete according to sponsors. (Photo by Dennis Sharkey/The Daily News)