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Legislators strike deal on ethanol
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The ethanol plant in Bingham Lake, Minn. (MPR file photo/Mark Steil)

St. Paul, Minn. — (AP) Minnesota's embrace of ethanol-gasoline blends would be taken to new heights under a bill that could clear the Legislature as soon as Wednesday.

Two leading legislators on agriculture issues - Rep. Greg Davids, R-Preston, and Sen. Dallas Sams, DFL-Staples - said Tuesday they have struck a deal to boost the amount of ethanol sold in Minnesota. The pact melds bills that comfortably passed the House and Senate earlier this year.

The merged bill would double the percentage of the corn-based additive in each gallon of gas beginning in 2013 if a separate renewable fuel goal is not met.

"It gets us on the road toward lowering our dependence on foreign oil," Davids said. "It's a great piece of legislation and it will help the rural economy."

Currently, most Minnesotans put a 10 percent ethanol blend in their tanks; there are cars that run on 85 percent ethanol, a fuel dubbed E85. Soon, all diesel fuels sold in the state will contain a small fraction of animal fats or vegetable oils, like that derived from soybeans.

The move to a 20 percent blend, so-called E20, which would affect most motorists, isn't a certainty.

Here's why:

-The higher threshold hinges on the total amount of ethanol or renewable fuels consumed in Minnesota. If by the end of 2010, ethanol makes up one-fifth of all gas sold in the state, the new mandate wouldn't take hold.

Such a scenario would depend on E85 sales jumping considerably. Because E85 has so much ethanol per gallon, greater use of it would push Minnesota closer to its overall 20 percent renewable fuel goal. There are more than 100,000 vehicles in the state that can accommodate E85, often in government fleets.

-The federal government holds veto power. If Minnesota can't get a waiver from the Environmental Protection Agency, the state would stick with its current ethanol standard.

Gov. Tim Pawlenty has been pushing for expanded use of ethanol. But a spokesman had no immediate comment on the legislative agreement.

It is expected to get a Senate vote on Wednesday and the House would take it up soon after.

In Minnesota, about 260 million gallons of ethanol are currently consumed. To accommodate a 20 percent blend, ethanol plants would have to make at least 574 million gallons of it. That would require the cultivation of 230 million more bushels of corn, above the 1 billion bushels harvested now each year.

While it would be a boon for farmers, opponents of the higher standard have raised concerns about it damaging vehicle engines and other small motors. Others have complained that government is propping up an industry that should rise or fall on its own.