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Missouri Ethanol Mandate Goes Into Effect

January 3, 2008

A law that took effect Jan. 1 makes Missouri just the third state — behind Minnesota and Hawaii — to implement a wide-ranging ethanol mandate. Because the corn-based fuel is cheaper than gasoline, most of Missouri's gas stations made the switch months in advance, the Associated Press reports.The federal renewable fuels standard called for oil companies to buy 4.7 billion gallons of ethanol and biodiesel in 2007. Oil companies are expected to use about 7 billion gallons, but ethanol plants have produced about 7.5 billion gallons, said Gary Marshall, chief executive officer of the Missouri Corn Growers Association.That oversupply, combined with government tax incentives for ethanol, has caused ethanol-blended gasoline to be about 5 to 10 cents cheaper per gallon at the retail level than traditional gasoline.According to the AP, the new law includes an exception automatically suspending the ethanol mandate anytime the price of ethanol exceeds that of traditional gasoline.
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