State considers ending subsidy on ethanol

Posted: Tuesday, April 22, 2003

ANCHORAGE (AP) -- Gov. Frank Murkowski is proposing to cut a state subsidy of ethanol gasoline for Anchorage drivers that costs $2.5 million annually.

The proposal is among the budget cuts the governor is seeking.

Ethanol is added to gasoline in Anchorage from November to March to reduce the levels of carbon monoxide. The city used to regularly exceed federal clean air limits for carbon monoxide on a regular basis but hasn't done so since 1996.

The state gives Anchorage fuel dealers a 6-cent-per-gallon break on gasoline taxes for blending ethanol into the mix. If the state stops supporting the ethanol program, Anchorage residents could end up paying higher winter prices at the pump.

The state, however, believes Anchorage has cleaned up its air enough to skip ethanol. Otherwise, state administrators wouldn't have written the subsidy out of the state's budget, said Tom Chapple, state director of air and water quality.

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