Iowa State officials pushing to expand biofuels sales at Iowa gas retailers

Source: by William Petroski, Des Moines Register • Posted: Tuesday, October 15, 2013

State officials on Monday announced a new biofuels pilot program, “Fueling Our Future,” to establish more blender pumps at gas retailers around Iowa to sell mid-level ethanol-blended gasoline and biodiesel fuel.

Gov. Terry Branstad said the public-private partnership will use federal funds to leverage state dollars in the existing renewable fuel infrastructure program to build on the state’s role as a leader in renewable fuels production.

This will include the redirection of $250,000 in federal anti-pollution money from the U.S. Department of Transportation to further leverage state dollars in the existing rural renewable infrastructure program, officials said.

The money will be available to retailers through an application process with the Iowa Renewable Fuels Infrastructure Board and will help provide more blender pumps containing E-30, which is gasoline blended with 30 percent ethanol. This effort will also help improve air quality because ethanol is a cleaner-burning fuel compared to petroleum-based gasoline, said Lt. Gov. Kim Reynolds.

Only vehicles designated as “flex-fuel” capable can be filled with E-30, which is higher than the recommended amount of ethanol for most vehicles on the road. About 10 percent of all vehicles nationally can use flex fuels , although about a quarter of all new cars and trucks are flex-fuel models and the percentage is growing, officials said.

Most gasoline currently pumped in Iowa contains a 10 percent blend of ethanol known as E-10. A 30 percent blend of ethanol with gasoline is considered a “sweet spot” in terms of fuel efficiency for motor vehicles, said Monte Shaw, executive director of the Iowa Renewable Fuels Association, an industry group. Iowans can currently purchase gasoline with an 85 percent ethanol blend, known as E-85, although it offers fewer miles per gallon than clear gasoline without ethanol.

“This pilot program will help provide Iowans with additional access to higher blends of ethanol and biodiesel, which will help our farmers, communities and economy in producing, processing and profiting,” as well as environmental benefits, Branstad said.

Under the state’s renewable fuels infrastructure program, reimbursement to businesses can be for 50% of the costs for specific components of a project with a three- year commitment required to sell certain renewable fuels.

A five- year commitment to store and sell renewable fuels and install certain equipment can result in up to 70% reimbursement for specific equipment or installation costs. Certain biodiesel terminal equipment and/or infrastructure can receive funding for up to $100,000 per project.

Branstad described Iowa as a leader in the production and use of renewable fuels and he expressed hopes other Midwest states will follow Iowa in expanding the market for mid-level biofuels blends.

The Iowa initiative will be supported b y the Iowa Department of Agriculture and Land Stewardship, the Department of Transportation, Iowa State University, and the Iowa Renewable Fuels Infrastructure Board. The governor was joined at a news conference announcing the program by Agriculture Secretary Bill Northey and Iowa DOT Director Paul Trombino.

Iowa State University will evaluate consumer perceptions and the impact of increased access to mid-level fuel blending options, including any impacts on air quality, officials said.