Bucking Congress, Vilsack vows support for infrastructure

Source: Amanda Peterka, E&E reporter • Posted: Friday, February 28, 2014

The Agriculture Department will continue funding ethanol infrastructure despite a congressional attempt to strip its authority to do so, USDA’s top official said yesterday.

Speaking to an ethanol industry audience in Arizona, Agriculture Secretary Tom Vilsack said he had a “whole lot of programs at USDA” at his disposal to fund ethanol infrastructure. He vowed in general to do everything within the department’s power to boost the biofuels industry, even while U.S. EPA is taking steps to reduce the federal ethanol mandate.”This is an invitation to you to come to me, and I will help you and USDA will help you, make no mistake about that,” Vilsack told ethanol producers.The farm bill signed into law earlier this month includes a short provision that prohibits USDA from using the Rural Energy for America Program to fund blender pumps, or gas station pumps capable of mixing up to 75 percent ethanol into gasoline.Blender pumps are key to getting widespread acceptance of higher blends of ethanol in the fuel market — the status quo in gasoline is 10 percent ethanol — and the Agriculture Department had been using REAP for the past several years to provide awards to gas stations for their installation.

In 2011, Vilsack announced a goal of using the program to install 10,000 blend pumps across the country. According to data compiled by the Environmental Law and Policy Center, the department funded just under 100 individual blender pump projects worth about $5.5 million since the beginning of 2011; many projects include funding for more than one pump and more than one gas station site. The Agriculture Department was unable to confirm the data before publication time.

Congressional foes of ethanol, led by Sen. John McCain (R-Ariz.), are opposed to USDA using the program to boost ethanol. REAP is mostly used to help farmers and ranchers install renewable energy and energy efficiency projects.

Though USDA’s blender pump initiative survived several amendments offered by McCain, the final farm bill negotiated behind the scenes by congressional agriculture leaders stripped the department’s authority to use REAP to fund blender pumps.

But Vilsack told ethanol producers yesterday at Growth Energy’s annual conference that USDA believes it can still use various rural loan and grant programs to fund the infrastructure improvements, such as value-added producer grants.

“In all 50 states and all the territories, we’re open for business,” he said.

Vilsack also said he plans to use other farm bill programs to help boost the biofuels industry as a whole. He highlighted expansions in bio-based manufacturing assistance as well as the $881 million that the farm bill provides in mandatory funding for energy programs over the next five years.

For the first time, Vilsack said USDA is also expanding its trade promotion authority, which it uses to invest in trade shows and bring foreign companies to the United States, to promote ethanol abroad. USDA is targeting emerging markets in places like China.

“I am a firm believer in this industry,” Vilsack said. “I think it is essential and I think it is absolutely mandatory that this industry continue to survive, to mature and to expand.”

Growth Energy spokesman Michael Frohlich applauded the secretary’s statements.

“From the industry perspective, from us, the secretary’s made it clear that he’s going to do everything in his power to move forward on infrastructure issues,” Frohlich said.

Frohlich added that the industry is starting to see the marketplace driving investment in ethanol infrastructure. In a big step forward for the industry, MAPCO Express Inc., a large convenience store operator, announced last month that it would sell fuel containing 15 percent ethanol in 100 gas stations (E&ENews PM, Jan. 15).

But Vilsack’s promises at USDA come as EPA is weighing a proposal to roll back the amount both of ethanol and of advanced biofuels that refiners must use in gasoline and diesel this year. While EPA says that the proposal would put U.S. biofuels policy on a “manageable track,” ethanol producers say the rollback would be devastating for their industry (Greenwire, Feb. 20).

Calling the proposal the “elephant in the room,” Vilsack said he’s spoken with both EPA and the White House about it but acknowledged that he has no authority to make a decision on the renewable fuel standard targets. EPA is currently assessing thousands of comments it received; the agency plans to issue a final decision by the end of this spring.