By TIM ALEXANDER
Illinois Correspondent

BLOOMINGTON, Ill. — When the Illinois Senate passed a measure last week that would allow higher ethanol blends to receive the same, 20 percent sales tax exemption that 10 percent ethanol blends currently enjoy, it opened the door in Illinois to an anticipated nationwide increase in the ethanol blend wall to 12 or 15 percent.

“We wanted to make sure that when or if the U.S. EPA allows for a higher blend that we were ready,” Tim Lenz, president of the Illinois Corn Growers Assoc. (ICGA), told Farm World. “If U.S. EPA decides on a 15 percent blend wall then that is the blend that would receive the 20 percent reduction in sales tax in Illinois. If we’d have left that alone at 10 percent, it would have been a dis-incentive for blenders to market a higher blend in Illinois.”

The legislation (HB 4652) essentially links the state’s definition of ethanol blended fuels to the EPA’s highest allowable levels of ethanol as defined in the Clean Air Act – which is currently under review.

Lenz maintained that if EPA were to approve a blend wall boost, consumers would realize an immediate savings in their personal fuel costs.

“Right now, ethanol wholesale-wise is 65 cents cheaper than gasoline. We feel it would be good for consumers if we were allowed to blend a little higher. It should only lower their motor fuel prices,” said Lenz, a corn grower from Strasburg. “This is great news for anyone that buys fuel in Illinois.”

Illinois is currently home to 15 operating ethanol plants with a combined annual capacity of 1.5 billion gallons, according to the ICGA. More than 1,000 people are directly employed in Illinois ethanol plants, the association said.

Lenz hopes Illinois Gov. Patrick Quinn will sign the measure into law before Memorial Day, when gasoline prices typically begin their yearly, cyclical increase – and in time for a possible green light from the EPA to boost the blend wall to at least 12 percent.
“The timing on this legislation is critical,” Lenz stated. “We expect EPA to approve ethanol blends of up to 15 percent in the nation’s fuel supply sometime this summer.

Without this statutory adjustment in Illinois, consumers would have immediately lost some of the price advantage as ethanol blends increase.”

In the wake of the recent oil spill incident in the Gulf of Mexico, Renewable Fuels Assoc. President Bob Dineen urged President Obama to use the ongoing incident as a “teaching moment” as he tries to reduce U.S. reliance on petroleum-based fuels.

“The juxtaposition of a green American farm field and the copper-toned oil slick spreading across the Gulf is striking,” Dineen stated in a letter to the Obama Administration, in which he called for the U.S. EPA to immediately begin allowing for the blending of 12 percent ethanol by volume in each gallon of gasoline as an “interim step” towards ending U.S. reliance on foreign fuels.

Dineen also called for a full waiver from the EPA for the use of 15 percent ethanol blends as soon as the Dept. of Energy finishes testing on catalytic converters early this summer.

Meanwhile, interest groups allied with the oil and auto industries urged the EPA last week to delay action on allowing higher ethanol blends in gasoline.

The Auto Alliance, the American Petroleum Institute and the Outdoor Power Equipment Institute said higher levels of ethanol have not been proven safe or effective for automobiles, according to a report from Telvent DTN.