Ethanol Becomes Mandatory at Hawaii Gas Stations

HONOLULU -- On April 2, Hawaii will require all gas stations to pump a blend with 10 percent ethanol, an alcohol-based fuel made from sugar cane, in order to make the state less dependent on imported oil, pump up the local sugar cane growers and offer tax credits for local ethanol producers, reported Hawaii's KHON2.

Maui and Oahu ethanol companies thought they'd be turning cane to alcohol fuel by now, but problems with financing, land acquisition and engineering issues have pushed plans back to 2007. So ethanol will be imported for now. Some say the legislature put the cart before the horse, according to the report.

"I think that's where lawmakers fall down every time. It's like the bottle bill. It's like the gas cap. They haven't thought out the process," Lowell Kalapa of the Tax Foundation of Hawaii, told KHON2.

Tax credits for ethanol production are generous and enough investors still aren't biting. And the sale of ethanol-blended gas will be exempt from the state's general excise tax until the end of this year, according to the report.

"We're going to be out about $12 million a year because of the credit. That means $12 million less that we collect that we can spend on things like education. That means $12 million more that we, as general taxpayers, will have to make up," Lowell said in the report.

Some argue that because ethanol is not as fuel-efficient, they will be buying more gallons of gas and getting fewer miles per gallon.

Ethanol advocate George Nitta of Nitta's Auto Repairs disagrees.

"What you get from ethanol vs. regular gas is fuel mileage, a lot more mileage on ethanol and a lot more power," he told KHON2.

Nitta is in negotiations to buy at least two service stations that will pump only ethanol at around $2.25 a gallon. He wants to be in operation before April so motorists can start blending their own ethanol gas mix, or go full tank, according to the report.

"Open the gas caps and look on the gas cap and it will say ethanol or gas, and those are the cars you buy," Nitta said in the report.

When the 10 percent blend starts pumping, he recommends motorists add another 10 percent to the mix, no matter what model.

"Like Henry Ford, when he made the car, everybody said no, no, no, you can't beat the horse. Here we are with cars, no horses. And what was Henry Ford's first fuel? Ethanol," Nitta said in the report.