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Unleaded Gasoline Without Ethanol May Become More Scarce or Expensive

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CEDAR RAPIDS, Iowa - Iowa motorists prefer ethanol-blended fuels by a vast majority. The Iowa Renewable Fuels Association estimates 83 percent of all the fuel sold in the state currently is E-10, the mixture of 90 percent gas and 10 percent ethanol that is priced cheapest at the pump.

But a consistent minority of buyers want regular gasoline without added ethanol for various reasons. And a switch by Magellan Midstream Partners, operators of Iowa's largest pipeline system, will make that a more difficult or more expensive option by mid-September. Magellan has notified Iowa retailers that the 87 octane unleaded regular gasoline, which is the most popular alternative to ethanol-blended fuels, won't be sent through the pipeline after September 15th.

Instead, the pipeline company will ship an 84 octane unleaded along with the much-more-expensive 91 octane "premium" gasoline. Petroleum retailers said it would be possible to blend the premium fuel with the lower octane gasoline to create the regular unleaded currently available at the pumps. But doing that might increase the price by 30 to 40 cents a gallon at the pumps. Currently, regular unleaded gasoline without ethanol is about ten cents a gallon more expensive at most stations.

Eighty-four octane fuel would not be legal to sell "as is" in Iowa because the octane level is too low for vehicles. Retailers would add ethanol to create the E-10 mixture sold to most Iowa drivers now. The octane content of E-10 would then drop from the current 89 octane to 87 octane.

Dennis Ciha, one customer at a convenience store on Monday, said while some people would pay a bit more to get gasoline without ethanol, he doubts many would be willing to shell out that much more per gallon.

"It's too much money, 30 to 40 cents (per gallon) on a full tank of gas--that's a lot of money," Ciha said.

Todd Satterly, present of the Guppy's on the Go store chain, said he's not sure what petroleum marketers will do about the switch. It may not make sense to offer an regular gasoline product that is priced so high no one would buy it. Satterly said retailers would probably keep the premium fuel without ethanol because some automobiles, like sports cars, still require that fuel with a high octane content. He also said BP requires those retailing that company's gasoline to offer a premium fuel.

Another issue for consumers is the impact of less available gasoline without ethanol on small engines, like those in lawnmowers or chain saws.

Jayson Cook at employee at Midwest Outdoor Equipment in Hiawatha, said manufacturers allow the use of E-10 with newer small engines. But many customers still prefer to use fuel without ethanol. Cook said the problem is ethanol-blended fuel if stored for long periods of time and not used can corrode small parts inside an engine. Even though manufacturers approve E-10, he and others who sell the equipment still tell customers to be wary if they use it in small engines.

"Eighty percent of our customers will not use it (E-10), we've told them not to use it. If there's no regular unleaded, the problem is they're going to be here more often visiting us to get it repaired," Cook said.

The Iowa Renewable Fuels Association said one positive from the removal of 87 octane regular gasoline from the pipeline system is that would free up a tank at convenience stores or gas stations. That might make retailers more interested in carrying the E-15 blend of gasoline and more ethanol because they would now have tank space.

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