By DAVID PITT,Associated Press Writer

ST. ANSGAR, Iowa (AP) – Mark McKinley need only look out across his car dealership to see the rise in demand for the newest renewable fuel – E85.

In the past 45 days, he said he has sold 10 half-ton Chevrolet pickups equipped with flex fuel engines that can burn either regular gasoline, a fuel mixture with 10 percent ethanol, or E85 – 85 percent grain alcohol distilled from corn and 15 percent gasoline.

“About every truck that we can get that’s going out of here has got the flex fuel motor in it,” he said. “Everything has just seemed to explode as far as the interest level.”

The popularity of E85 is increasing, with farmers buying the new flex fuel vehicles, gas stations converting some pumps to serve the new fuel, and farmers teaming up with investors to build ethanol plants.

McKinley’s flex fuel car buyers, many of them farmers like Steve Duenow, insist on burning E85 fuel, he said.

Duenow, a fifth generation farmer, bought a flex fuel truck from McKinley about two weeks ago. A corn and soybean farmer, Duenow said the purchase made sense. He said, “We grow the corn here and they make it out of corn.”

Duenow said most farmers he knows have burned the widely available 10 percent ethanol for years. They’re convinced it’s better for the environment, provides a broader market for the corn they grow and cuts the need for imported oil.

His 2006 silver Chevrolet Silverado cost the same and runs no different from a regular gas burning truck. In addition, E85 is about 40 cents cheaper than regular gas.

The lower price of E85 usually more than compensates for a reduction in fuel mileage of up to 17 percent for a flex fuel vehicle, according to the Renewable Fuels Association, a national trade group.

The potential for growth in the E85 market prompted McKinley to buy a gas station across the street and convert one pump to serve E85. He now directs his new flex fuel car and truck customers there to fill up at the only E85 pump within 25 miles.

McKinley’s station, one of the most recent fuel retailers to add E85, brings the number of stations selling E85 in the state to 35. Only Minnesota, with about 203 E85 fuel retailers, and Illinois, with 96, have more, according to the U.S. Department of Energy.

Nationwide, about 619 of the nation’s estimated 170,000 gas stations have an E85 pump, with the heaviest concentration in the upper Midwest.

A dozen more Iowa gas stations are planning to carry E85 this year, said Monte Shaw, the spokesman for the Iowa Renewable Fuels Association, a Des Moines-based trade group.

Also boosting E85 demand is the construction of ethanol plants. Many of the plants’ investors are local farmers.

A Mason City plant makes 55 million gallons of ethanol a year from locally grown corn and is expanding to more than double its capacity. The plant is owned by 750 investors, two-thirds of whom are farmers.

A group of investors from St. Ansgar are planning to build an $80 million plant that will convert 18 million bushels of corn a year to about 50 million gallons of ethanol.

Iowa has 29 plants operating or under construction, according to the Renewable Fuels Association. Nebraska has 19 and Minnesota, 16. Across the country, there are 132 ethanol plants operating or under construction.

The popularity of E85 is increasing as publicity widens. GM said it expects to build 400,000 flex fuel cars and trucks this year. Ford said it’s goal is 250,000 and Chrysler’s is 500,000.

Flex fuel vehicles are the only ones that can handle the high alcohol content of E85, which can damage a regular vehicle’s rubber and plastic parts over time.

Motorists without the new engines should be careful about pumping the new fuel into their vehicles. With E85 selling for about 40 cents a gallon cheaper than regular gas, some customers might be tempted to buy E85 instead of gas.

“We encourage people to be careful and only use it in proper vehicles,” Shaw said.

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On the Net: Department of Energy: http://www.eere.energy.gov/afdc/infrastructure/station-counts.html

Iowa Renewable Fuels Association: http://www.iowarfa.org/

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