Report Title:




Repeals the requirement for gasoline sold in the State to contain 10% ethanol.



S.B. NO.













relating to ethanol.





SECTION 1. The legislature finds that all gasoline sold in the State for use in motor vehicles must contain at least ten per cent ethanol by volume. As James Madison wrote in The Federalist, No. 20, "Experience is the oracle of truth". Since enactment of the ethanol content requirement, Hawaii has experienced increased prices and further dependence on imported oil for our fuel supply.

The legislature finds that Hawaii's experience with a ten per cent ethanol content requirement has not yielded the lower fuel prices or energy independence that was expected when the law was passed. The legislature further finds that, to the contrary, the ethanol content requirement has helped keep fuel prices high by forcing refiners to import the ethanol additive. Ethanol has yet to be produced in Hawaii in any meaningful quantity, so gasoline prices in the State must also bear the added expense of purchasing ethanol from foreign suppliers and transporting it to the State. The legislature further finds that motor vehicles get lower gas mileage when using ethanol-treated fuel, and this forces drivers to refuel more frequently and use yet more expensive gasoline. The legislature further finds that ethanol-treated gasoline is damaging to marine engines and small gasoline engines, resulting in expensive repairs for individuals who own small boats, watercraft, and gas-powered tools. The legislature further finds that, recently, fuel crops have replaced food crops, and this has increased the prices of staple foods, and in some parts of the world it has resulted in food shortages and social unrest. Additionally, the consensus among the scientific community is that there is no net energy gain from the use of ethanol over traditional fossil fuels. The production cycle of ethanol, including growing, harvesting, and refining, requires more energy input from fossil fuels than the energy output of the finished ethanol product. This paradox has the undesirable effect of increasing our use of fossil fuels, making us more dependent on foreign sources of fuels and increasing our overall greenhouse gas emissions.

Accordingly, the purpose of this Act is to repeal section 486J-10, Hawaii Revised Statutes.

SECTION 2. Section 486J-10, Hawaii Revised Statutes, is repealed.

["486J-10 Ethanol content requirement. (a) The director shall adopt rules in accordance with chapter 91 to require that gasoline sold in the State for use in motor vehicles contain ten per cent ethanol by volume. The amounts of gasoline sold in the State containing ten per cent ethanol shall be in accordance with rules as the director may deem appropriate. The director may authorize the sale of gasoline that does not meet these requirements as provided in subsection (d).

(b) Gasoline blended with an ethanol-based product, such as ethyl tertiary butyl ether, shall be considered to be in conformance with this section if the quantity of ethanol used in the manufacture of the ethanol-based product represents ten per cent, by volume, of the finished motor fuel.

(c) Ethanol used in the manufacture of ethanol-based gasoline additives, such as ethyl tertiary butyl ether, may be considered to contribute to the distributor's conformance with this section; provided that the total quantity of ethanol used by the distributor is an amount equal to or greater than the amount of ethanol required under this section.

(d) The director may authorize the sale of gasoline that does not meet the provisions of this section:

(1) To the extent that sufficient quantities of competitively-priced ethanol are not available to meet the minimum requirements of this section; or

(2) In the event of any other circumstances for which the director determines compliance with this section would cause undue hardship.

(e) Each distributor, at reporting dates as the director may establish, shall file with the director, on forms prescribed, prepared, and furnished by the director, a certified statement showing:

(1) The price and amount of ethanol available;

(2) The amount of ethanol-blended fuel sold by the distributor;

(3) The amount of non-ethanol-blended gasoline sold by the distributor; and

(4) Any other information the director shall require for the purposes of compliance with this section.

(f) Provisions with respect to confidentiality of information shall be the same as provided in section 486J-6.

(g) Any distributor or any other person violating the requirements of this section shall be subject to a fine of not less than $2 per gallon of nonconforming fuel, up to a maximum of $10,000 per infraction.

(h) The director, in accordance with chapter 91, shall adopt rules for the administration and enforcement of this section."]

SECTION 3. Statutory material to be repealed is bracketed and stricken.

SECTION 4. This Act shall take effect upon its approval.