The Iowa ethanol industry plans to ask the legislature to pass a bill requiring that all motor gasoline in the state carry at least 10 percent ethanol.

Despite being the largest ethanol producer in the U.S., Iowa has never mandated ethanol use in gasoline sold within the state.

But Monte Shaw, executive vice president of the Iowa Renewable Fuels Association, noted that the percentage of fuel sold in Iowa with ethanol blended in has been stuck around 75 percent while the percentage of ethanol-blended gasoline now stands at 80 percent in the rest of the nation.

“Iowa is lagging behind the rest of the country in ethanol use,” Shaw said to the annual summit of the Iowa Renewable Fuels Association.

Shaw estimated that the approximately 100 million gallons of ethanol now sold in Iowa would be increased to about 140 million gallons were a state mandate passed.

Iowa is the nation’s largest producer of ethanol, with about 3.2 billion gallons produced at its 39 ethanol production plants last year. The vast majority of the ethanol produced in the state is sent to the rest of the country.

Even so, Iowa has never mandated ethanol use within its own borders. The federal government has stair-step requirements for ethanol use, rising from 10.5 billion gallons last year to 12 billion gallons this year and eventually to 36 billion gallons after the year 2020.

Gov. Chet Culver told the annual meeting that an E10 blend mandate is a “step in the right direction.”

“This can make a statement about our commitment to biofuels and solidfy our position as a national leader in the green economy,” Culver said.

The legislative outlook for a state mandate is unclear. Last year the Iowa Senate approved a bill requiring all diesel fuel sold in the state contain 5 percent biodiesel, made primarily from soybean oil. But that bill failed to come up in the House.

Mona Bond, vice president for public affairs for the Iowa Petroleum Marketers Association said the group is “adamantly opposed” to an ethanol mandate.

State Representative Annette Sweeney (R.-Alden) said she has brought the matter up with the Republican caucus.

“I know there’s interest in the bill and there will be more once the case is made for how important the ethanol industry is to Iowa,” said Sweeney, who attended the renewable fuels summit Monday.

Sweeney, who farms in Hardin County, noted recent U.S. Department of Agriculture reports showing a surplus of more than 1.5 billion bushels of corn.

“Ethanol has been so important to Iowa’s corn growers, and there is a question now what to do with the surplus,” Sweeney said.

The ethanol industry is awaiting a final decision from the U.S. Environmental Protection Agency on approval to increase the allowable blend of ethanol in unleaded gasoline from the current 10 percent to 15 percent.

Such an increase is estimated to add another 7 billion gallons to the annual demand for ethanol.

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