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Move to extend tax breaks for E15 under way in Illinois
By STEVE BINDER
Illinois Correspondent

SPRINGFIELD, Ill. — Legislation introduced in Illinois would eliminate tax breaks for fuel mixed with 10 percent ethanol and instead give the breaks to fuel mixed with 15 percent of the corn-based product.

Big Oil doesn’t like the idea, while the state’s top corn group says now is the time to continue moving toward a much more environmentally friendly gasoline and a more independent fuel supply.

But E15, while approved for newer car models by the U.S. Environmental Protection Agency (EPA last year), has been slow to catch on so far, in part because of continuing political opposition. It is also because many believe more research is needed to determine E15 is not only safe for many vehicles to use, but that retailers are protected legally for selling it.

State Sen. John Sullivan, a Democrat from western Illinois, has proposed S.B. 52 because he said he believes any tax breaks for ethanol products should be used to advance the use of more ethanol. “E10 does not need a tax incentive anymore,” he said.
Sullivan’s legislation, assigned to the Senate’s Agriculture and Conservation Committee, has the strong support of the Illinois Corn Growers Assoc. and the Illinois Renewable Fuels Assoc. Those groups maintain the testing of E15 in recent years has been extensive and note the EPA wouldn’t have approved its sale if it believed it were unsafe for most vehicles.

But state Sen. Kyle McCarter, a Republican from southwestern Illinois, is concerned about sellers of the product. “I know we all want to do good things for the environment, but we may be putting a huge burden on this industry,” he said.

During testimony before the Senate Ag Committee, petroleum representatives said the move now to E15 is premature.
“It would create leaks out there in our fueling systems,” said Jeff Dzierzanowski, manager of new business development at Source North America Corp. Matt Schrimpf, president of the HWRT Oil Co., said demand for E15 is nonexistent.

Bob Dineen, president of the national Renewable Fuels Assoc., said, “The growth has been pretty slow. We’ve got about a dozen stations, maybe 15 stations today in Kansas, Nebraska, Iowa, Illinois.” But he noted the nation’s Renewable Fuel Standard (RFS) requires movement forward on higher blends of ethanol-gasoline use.

High corn prices, as well as a leveling off of gas use in recent years, have idled about 30 of the nation’s 211 ethanol plants during the past nine months. But with a move toward more E15 use, production of corn-based ethanol would be rekindled and would easily reach the RFS requirement of mixing 16 billion gallons of ethanol in the nation’s fuel supply this year.

“You’d have another six (billion) or seven billion gallons of ethanol demand,” Dineen said. “Clearly you would be able to restart the two billion gallons of capacity that is currently not being utilized, and there’d be room for growth as new cellulosic or other biofuels come into marketplace.”
3/27/2013