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Ethanol bill nears crucial test
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Supporters of the ethanol bill -- mostly farmers and legislators -- rallied at the Capitol on Wednesday. (MPR Photo/Laura McCallum)
About 200 ethanol supporters rallied at the state Capitol in support of doubling the state's ethanol mandate on Wednesday. Gov. Pawlenty urged the crowd to persuade wavering lawmakers to vote for the plan. The bill has bipartisan support in the Legislature, but it's about to face its toughest test in a key House committee, which holds a hearing on the bill on Thursday.

St. Paul, Minn. — Minnesota is the only state in the country with an ethanol mandate. It requires that each gallon of gas sold in the state contain 10 percent of the corn-based additive. Pawlenty wants to increase that to 20 percent. He told corn farmers that ethanol reduces U.S.dependence on foreign oil and creates jobs in rural Minnesota.

"This is good agricultural policy," Pawlenty said. "It is good energy policy. It is good foreign policy. It is good national security policy. It is good environmental policy. This is a win-win-win-win-win."

Pawlenty chairs the Governor's Ethanol Coalition, and has made the 20-percent mandate a top priority this session. The bill easily passed the Senate last month, and has cleared several House committees. But it's now before the House Transportation Finance Committee, where chairwoman Mary Liz Holberg says the bill will not pass in its current form.

The Lakeville Republican says automobile manufacturers question the impact of the higher mandate on cars.

"I'm concerned about the effects on the tens of thousands of vehicles that are out there right now that can't support that fuel and would need either recalibration of their computer systems, or a search for a different fuel that may or may not be available in the state," she said.

Car manufacturers have testified that warranties won't cover cars that use 20-percent ethanol. Ethanol supporters say the same concerns came up when Minnesota passed the 10-percent mandate, and the predictions of car problems didn't materialize.

Minnesota would need a federal waiver for the higher requirement. The bill's sponsor, Republican Greg Davids of Preston, says that process would put an end to questions of car performance.

"E-20 has to be approved by the EPA, and it'll be studied, there will be engine studies, they'll do the studies, and this bill will not become law until the EPA has approved it," according to Davids.

Davids says supporters will try to persuade members of the Transportation Finance Committee of ethanol's benefits. Advocates say the state's 13 ethanol plants have been an economic boon to rural areas.

James Simonson, who farms near Preston and is board chair at the Pro Corn ethanol plant, says the proposed 20-percent mandate would increase demand for Minnesota ethanol.

"Our ethanol plant has helped our town a lot and we feel if we can get her up to 20, neighboring states will start using more of it," he says.

Simonson and other supporters planned to make one final push for the bill before it goes before Holberg's committee. Holberg says she's being heavily lobbied by both sides, and acknowledges she's getting some pressure from the governor's office. She says she's trying to find a compromise that could make it through her committee.

"I'm trying to recognize the needs of our rural members and our rural economy and work with the issue, but at least put some comfort level into the bill that it doesn't cause too many adverse effects on other areas of our economy and for our citizens," Holberg says.

Holberg's committee is the final stop before the bill would go to the full House. The committee is likely to vote on the bill early next week.