The Iowa Senate

State of Iowa

Eighty-First General Assembly

STATEHOUSE

Des Moines, Iowa 50319

For Immediate Release: Tuesday, Jan. 24, 2006

Contact: Kimberly Steenhoek, (515) 281-6571

Senate Republicans Introduce Renewable Fuels Package

Landmark Legislation to Boost E-85 Sales in Iowa

DES MOINES – Iowa drivers soon could have more places to purchase E-85 fuel under legislation introduced today by Republicans in the Iowa Senate. E-85 is the fuel made of 85 percent ethanol and 15 percent gasoline.

“E-85 is the fuel of the future,” said Senate Republican Leader Stewart Iverson (R-Clarion). “Senate Republicans want to help prime the pump by ensuring more E-85 outlets are available across the state.”

The measure would use $5 million annually from the Iowa Values Fund to help retailers install E-85 pumps and storage tanks. Under the plan, 1,800 new E-85 pumps would be installed over the next nine years. Roughly 100,000 flexible fuel vehicles in Iowa can run on E-85, but only 28 retail outlets in the state sell the fuel.

“As more and more people purchase flex-fuel vehicles, demand for E-85 is growing. However, there are only a handful of stations that carry E-85,” said Senate Republican Co-President Jeff Lamberti (R-Ankeny). “It’s time we take the ethanol industry to the next level. Iowa should be the number one E-85 state in the nation.”

The estimated cost to install an E-85 pump and tank is between $60,000 and $80,000. Under the bill, retailers would receive grants up to $25,000 to help with the cost of installing an E-85 pump and tank.

The bill also would provide retailers with a 10 cent-per-gallon credit on each gallon of E-85 sold. The Department of Natural Resources estimates 650,000 gallons of E-85 will be sold in Iowa this year.

Republican senators said the tax incentives will help increase the popularity of E-85, just as they did for E-10, the fuel blend of 10 percent ethanol and 90 percent gasoline. In 1990, E-10 blends made up just 27 percent of total fuel sold in Iowa. In November 2005, E-10 constituted 78 percent of Iowa’s total fuel sales.

“We need to help spur the growth of E-85, just as we did with E-10,” said David Johnson (R-Ocheyedan), co-chair of the Senate Agriculture Committee. “E-10 has seen a lot of success. Now the Legislature needs to focus on promoting fuel that is made from 85 percent corn, instead of just 10 percent corn.”

The legislation also includes tax incentives for bio-diesel sales and sets a renewable fuels goal that 10 percent of all fuel sold in Iowa be renewable by 2010; 15 percent by 2015; and 20 percent by 2020.

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