North Dakota's service stations should not be forced to sell ethanol-blended fuel, senators decided as they voted down a bill that was advertised as a leap forward for the state's alternative fuels industry.

Aside from the ethanol mandate, the bill included a $20 million alternative fuels development program, along with investment subsidies for ethanol, hydrogen fuel cells, wind turbines and biodiesel, which is diesel fuel mixed with soybean oil.

The measure established a renewable energy development commission, with representatives from North Dakota's corn, soybean and oilseed grower associations, the agriculture commissioner, the director of the state Commerce Department and other officials.

"How much longer are we going to get left behind?" asked Sen. Joel Heitkamp, D-Hankinson, the measure's primary sponsor. "At some point … we're going to have to take a real hard look at whether we want to be leaders in this industry."

Sen. Rich Wardner, R-Dickinson, said the $20 million commitment from Bank of North Dakota profits was a large obligation, which would require overhauling other budgets.

Although not every North Dakota service station sells gasoline with a 10 percent ethanol blend, the fuel is widely available and becoming even more so, Wardner said. The state Senate voted 30-16 on Monday to defeat the legislation.

"There's no question we want to have more ethanol use," Wardner said.

Heitkamp said states that have the greatest local market penetration for ethanol require fuel stations to sell it.

In Minnesota, which has such a law, ethanol-blended fuel availability is universal, and Minnesota Gov. Tim Pawlenty wants to raise the required ethanol content in gasoline from 10 percent to 20 percent in five years.

Heitkamp said the legislation would "create jobs, create product, and, yes, it creates demand."

"We're telling people it's time to start using ethanol," Heitkamp said. "Because the debate over whether or not to use it, in my opinion, is over."

The bill is SB2229.