DES MOINES -- Apr 13 - Knight Ridder/Tribune Business News - Todd Dorman Waterloo-Cedar Falls Courier, Iowa

Sweeping ethanol legislation that took months to craft cleared the Iowa House in just five minutes Wednesday and is now on its way to Gov. Tom Vilsack's desk.

The irony wasn't lost on Rep. Steve Olson, R-DeWitt, who guided the bill to passage on a 97-1 vote. He was at the center of a session-long effort to bring together competing groups who grow, manufacture and sell renewable fuel.

"I think the months of groundwork paid dividends," Olson said after the vote. "Many people wondered whether we were ever going to get it off the ground."

At its core, the measure creates a "renewable fuels standard," or a series of ambitious goals aimed at boosting the use of ethanol and biodiesel fuels. By 2020, the bill requires that 25 percent of motor fuel sold in Iowa come from renewable sources.

Reaching that goal means dramatically expanding the sale and use of E85 --- a fuel blend with 15 percent gasoline and 85 percent ethanol. Gas stations that embrace E85 would be in line for millions of dollars in state tax credits and incentives.

Vilsack, a Democrat, said Wednesday it's likely he will sign the bill.

For consumers, the bill could mean expanded access to E85, which is currently available at only 30 fuel outlets across the state. Tax credits for station owners also may help keep E85 cheaper than regular unleaded gasoline, making it more attractive to car-buyers who might choose a flex-fuel vehicle that uses the fuel.

"I think a lot of people, if they know they have an option, will choose to use renewable fuel," said House Speaker Christopher Rants, R-Sioux City.

Backers of the bill also claim it will have a big economic impact on the farm and along main street. The Iowa Renewable Fuels Association estimates that increases ethanol usage in Iowa could boost the state's Gross State Product by $1.8 billion by 2020 and create nearly 4,000 jobs.

"This is the most aggressive renewable fuels program in the country," said Monte Shaw, the association's executive director.

But the owner of your corner gas station may have a big decision to make.

It's virtually impossible for gas station owners to meet the sales goals spelled out in the bill unless they sell E85. Stations that don't meet those goals receive a smaller tax credit or no tax credit at all.

Stations that get the credit can pass some of their good fortune on to consumers in the form of lower prices. Stations that don't get the credit may find themselves at a competitive disadvantage.

And it costs tens of thousands of dollars to install the equipment necessary to sell E85. Some station owners have been reluctant to make that investment when only about 2 percent of vehicles on the road in Iowa are equipped to burn the fuel.

The first set of sales goals don't kick in until 2010, so the state has time to study the bill's potential effects.

"To penalize companies for not meeting standards when there's no demand for the product is the wrong thing to do," said Dawn Carlson, executive vice president of the Petroleum Marketers and Convenience Stores of Iowa.

"I think we're going to find out that we're going to need to come back and change the legislation," Carlson said.

Shaw said the bill needs to provide both carrots and sticks for gas stations. He said lawmakers are poised to approve a second bill that will provide $16 million over the next four years to help gas stations make the conversions necessary to sell E85.