SPRINGFIELD — A battle between the oil industry and the nation’s corn farmers is brewing in the state Capitol.
In action Tuesday, a Senate panel heard testimony on a proposal backed by corn growers that would remove the sales tax break on gasoline that is mixed with 10 percent ethanol.
Instead of granting incentives to motorists who buy what is commonly known as E10 fuel, the corn growers want to instead apply the tax breaks to gasoline that is 15 percent ethanol.
The shift to E15 would not only potentially boost demand for corn, but it is being promoted as an environmentally friendlier alternative to straight gasoline.
Petroleum marketers, however, are fighting the push.
Representatives of the oil industry, including gas station and pipeline owners, told members of the Senate Agriculture Committee that ending the tax break would not only hurt gasoline retailers, but it could hurt motorists and the environment because E15 may damage engine components and storage tanks.
“It would create leaks out there in our fueling systems,” said Jeff Dzierzanowski, manager of new business development at Source North America Corp.
“I don’t have anybody asking to buy this product,” said Matt Schrimpf, president of Hartford-based HWRT Oil Co.
The Illinois Corn Growers Association, the Illinois Renewable Fuels Association and others say E15 has been extensively tested and has been approved for use by the U.S. Environmental Protection Agency.
State Sen. John Sullivan, D-Rushville, who is sponsoring legislation seeking to end subsidies for E10, said the time is right to begin pushing for E15.
“E10 does not need a tax incentive anymore,” Sullivan said.
State Sen. Kyle McCarter, R-Lebanon, said the legislation could have unintended consequences for petroleum marketers, who would have to spend money to retrofit their stations.
“I know we all want to do good things for the environment, but we may be putting a huge burden on this industry,” he said.
The legislation is Senate Bill 52.