Louisiana to Sell Ethanol Fuels Despite Some Concerns

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Louisiana to Sell Ethanol Fuels Despite Some Concerns

BATON ROUGE, La. -- Once production of ethanol-blend gasoline reaches 50 million gallons in Louisiana, the government will require it and other alternative fuels to be sold at gas retailers throughout the state, according to an Associated Press report.

Gov. Kathleen Blanco signed a bill requiring ethanol sales this week, in spite of fears that this legislation might raise the price of gasoline at the pumps. It promotes "homegrown, environmentally friendly energy," enables the creation new jobs and opens up a new market for both farmers and the state, she said.

"I'm looking for a benefit bonanza. Benefits for the farming community, the economy, the environment and most importantly, the consumer. Louisiana needs to keep its competitive edge in fueling the nation," Blanco said in a written statement.

The bill does not name who will be required to sell the alternative fuels, but it does include a mandate for its inclusion in gas sales once the production markers are reached. Exactly when the 50-million-gallon marker will be reached is still up in the air, according to Blanco, it could be as long as two years before the state reaches that amount. Once reached, 2 percent of the gas sold will have to include biodiesel or ethanol.

Many retailers and even Blanco are concerned about the effect such a law would have on the price of gasoline. Estimates vary that the price of ethanol-blended gasoline could jump 8 cents to 30 cents per gallon as reported by The Associated Press.

Agriculture Commissioner Bob Odom will enforce the bill and develop the rules and regulations for the alternative fuel program. Odom can delay its implementation if it appears that it will significantly increase gasoline sales, according to Blanco.

Opponents to the bill claim that this legislation will not give Odom the ability to stall the mandate, should it raise prices in the future. They also are pushing for another bill that will delay the alternative fuels mandate if prices for the ethanol or bio-diesel fuel go above the price of regular gasoline.

Jeff Copesky, a member of the Louisiana Mid-Continent Oil and Gas Association told The Associated Press that without additional legislation, there is no "price safety valve." He said, "There is nothing in law to let the commissioner do anything based on price." Odom countered by saying that conditions can be written into the regulations of the ethanol program.