In Little Falls, news of Gov. Tim Pawlenty's goal to double ethanol requirements in gasoline was expected to make more demand for an area product.
"If this happens it's going to be great for the ethanol industry," said Kerry Nixon, general manager at the Little Falls-based Central Minnesota Ethanol Co-op.
The co-op produces 20.5 million gallons of ethanol a year, employs 30 people and buys corn from area farmers. Nixon said this has been a solid year for the co-op, better than the two previous years, because of the Clean Air Act.
Nixon said the industry hoped other states -- particularly those in the corn-rich Midwest -- would match Minnesota's required 10 percent ethanol content in gasoline. He said Hawaii recently moved to make that requirement. If Minnesota increases the ethanol content to 20 percent, Nixon said other states may be more willing to begin with 10 percent.
Doubling demand in the state creates greater profits in the area as shipping costs are reduced, Nixon said. The co-op ships product to Chicago and to Seattle, Portland and Tacoma, Wash.
In regard to automaker reaction, Nixon said automakers will have to agree to include the 20-percent ethanol fuel in their warranties.
"I don't think it's an issue that can't be surmounted," Nixon said, noting University of Minnesota tests on the fuel and the use of even greater mixtures in Brazil.
Nixon said greater use of ethanol in fuel helps corn-producing farmers, helps advocates of cleaner air and keeps gasoline costs lower.
"It only makes good sense," Nixon said.
The proposal is being welcomed by North Dakota corn grower groups and debated by politicians.
The North Dakota Corn Growers Association is considering legislation to increase the market share goal for ethanol, executive director Jocie Iszler said.
Thirty percent of the gasoline produced in North Dakota contains 10 percent ethanol. "That's too low," Iszler said.
"We're very encouraged to hear this (Pawlenty's plan). We just feel that progressive action around us is only good news," she said.
(This story includes information from The Associated Press)
RENEE RICHARDSON can be reached at firstname.lastname@example.org or 855-5852.
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