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N.D. bill may boost ethanol use

BISMARCK - E85 fuel got a bad name last year when demand for ethanol jumped because it was suddenly in big demand as a replacement for a banned gasoline additive.

BISMARCK - E85 fuel got a bad name last year when demand for ethanol jumped because it was suddenly in big demand as a replacement for a banned gasoline additive.

Around the same time, a North Dakota gas tax holiday on E85 expired, boosting the price by 20 cents a gallon.

Ethanol prices spiked. Some North Dakota stations couldn't buy E85 at a decent price and stopped carrying it. Drivers who could find it for sale weren't as inclined to use it.

On that much, all players in an ethanol debate Thursday seem in agreement. Less certain is what North Dakota might do to put new life back into ethanol sales.

On Thursday, Sen. Tim Flakoll, R-Fargo, pitched his bill that would give gasoline retailers yearly rebates for hitting certain goals of ethanol sales. A couple of hours earlier, an American Lung Association official had addressed an energy generation conference in downtown Bismarck, explaining his view of the "pretty good" future of E85 in the state.

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E85 is a blend of 85 percent ethanol and 15 percent gasoline. It can only be used in flexible fuel vehicles.

If Flakoll's Senate Bill 2391 passes, stations whose total fuel sales for 2008 include 8 percent ethanol would get a 3-cent-per-gallon refund from the state. In 2009, the 3-cent refund would come if 9 percent of their total gallons sold is ethanol and so on through a 15 percent threshold for 2015 and thereafter.

He pitched his bill in the Senate Agriculture Committee, explaining it as a totally voluntary program. Stations are not mandated to carry ethanol. Drivers would be more likely to have their choice of using regular, or a 10-percent blend or E85.

Marketers' view

But Mike Rud of the North Dakota Petroleum Marketers Association, didn't like the idea. If the public finds out the stations are getting a 3-cent refund, they may assume the gas dealers are pocketing it instead of passing it along to customers, he said. He, too, noted that drivers and retailers alike had a disappointing experience with ethanol fuel last year when prices jumped.

Lung AssociationTim Gerlach, vice president of clean fuels and vehicle technologies for the American Lung Association of the Upper Midwest, said in an interview that a plan to phase out the use of a chemical known as MBTE as a gasoline additive was instead put into place suddenly last summer. Ethanol was the replacement additive.

But the ethanol industry wasn't prepared, Gerlach and Rud said.

"We learned a lesson," Gerlach said in an interview. He was in town to speak to the Energy Generation Conference at the Bismarck Civic Center. "We have some fence-mending to do."

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He said that with more North Dakota ethanol production coming on line, the fuel should be more plentiful now.

The Agriculture Committee took no immediate action on Flakoll's bill.

Cole works for Forum Communications, which owns the Herald.

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