House members target USDA efforts on blender pumps, exports

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, March 25, 2015

A coalition of bipartisan House members are urging their colleagues in the Appropriations Committee to limit funding for ethanol infrastructure and exports.

In a letter obtained by E&E Daily, the lawmakers asked agriculture appropriators to bar the Agriculture Department from funding the installation of ethanol blender pumps and the promotion of U.S. ethanol overseas.

“We are writing to respectfully request the inclusion of language to limit continued government support for corn ethanol,” the lawmakers wrote in the letter dated Monday. “The federal government’s creation of an artificial market for the ethanol industry is negatively impacting American consumers, livestock farmers, food producers, retailers, air and water quality, and the ability to feed our nation’s hungry.”

Reps. Bob Goodlatte (R-Va.), Peter Welch (D-Vt.) and Jim Costa (D-Calif.) — who are all co-sponsors of legislation to reform the nation’s biofuel mandates — led the effort. Fifteen other lawmakers signed the letter.

It was addressed to Reps. Robert Aderholt (R-Ala.) and Sam Farr (D-Calif.), who are chairman and ranking member, respectively, on the House Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Subcommittee.

Blender pumps refer to gas station pumps that can handle mixes of up to 75 percent ethanol.

Ethanol advocates and USDA view them as key to getting widespread acceptance of higher blends of ethanol in the fuel market. The status quo in gasoline is 10 percent ethanol, although there are an increasing number of flex-fuel cars on the road that can support higher blends.

But funding for blender pumps has been a subject of controversy since USDA in 2011 announced a goal to install 10,000 blender pumps across the country using the farm bill’s rural energy title.

Congressional foes of ethanol, led by Sen. John McCain (R-Ariz.), tried several times to include a provision prohibiting USDA from funding their installation in several large pieces of legislation; the final 2014 farm bill negotiated behind the scenes by congressional agriculture leaders stripped USDA’s ability to use the program for installing blender pumps.

After passage of the farm bill, Agriculture Secretary Tom Vilsack pledged to find other ways, including using various rural loan and grant programs, for USDA to support blender pumps (E&E Daily, Feb. 28, 2014). The Obama administration’s fiscal 2016 budget included a request for $50 million to support ethanol retail infrastructure.

In their letter this week, the coalition of lawmakers said they were “encouraged” by the farm bill language but would like to see “additional broader language to most effectively address this important issue.”

They asked appropriators to use their fiscal 2016 spending bill for the Agriculture Department to stipulate that no funds be used “to construct, fund, install, operate or pay the salaries and expenses of personnel of the Department of Agriculture to make grants for, the instillation of ethanol blender pumps.”

The lawmakers are also targeting USDA’s efforts to sell U.S. ethanol abroad, according to the letter. They asked Aderholt and Farr to prohibit funds in the fiscal 2016 spending bill to be used to pay for USDA personnel to promote ethanol overseas.

Ethanol exports have become a larger part of business for U.S. producers as U.S. EPA has considered cuts in the amount of ethanol that refiners must blend into petroleum fuel through the renewable fuel standard. According to the Renewable Fuels Association, U.S. producers last year sent 836 million gallons of ethanol abroad, the second-highest level of exports ever.

Along with sending more ethanol abroad, producers have been selling their product to a wider array of countries, including those in the Middle East and North Africa. Last year, U.S. ethanol was exported to 51 countries.

USDA has played a role in opening new markets to ethanol exports, recently 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.

Last May, for example, USDA’s Foreign Agriculture Service supported a trade mission to China that explored potential ethanol trade opportunities there.