Minnesota among states in line to add hundreds of ethanol pumps

Source: By Jim Spencer, Minneapolis Star Tribune • Posted: Friday, September 11, 2015


WASHINGTON – Minnesota will get millions of federal dollars to help build hundreds more ethanol fuel pumps around the state.

U.S. Secretary of Agriculture Tom Vilsack on Thursday named the state as one 21 across the country that will share $100 million to expand the use of renewable fuels in vehicles.

The exact amount of money headed for Minnesota remains to be determined. The state also will have to match the grant dollar-for-dollar through a public-private partnership with a robust corn industry. But the U.S. Department of Agriculture believes the available funds will be enough to install 620 new blender pumps capable of dispersing fuel with varying percentages of ethanol.

Minnesota Department of Agriculture bioenergy manager Kevin Hennessy said the state is “very pleased, and we look forward to making the best investment of these funds to expand flex fuel and E15 gasoline.”

A jump in available blender pumps in Minnesota should make it possible to drive up ethanol sales as a percentage of overall fuel consumption in the state. Right now, ethanol sales stand at 12 percent, slightly higher than the national average of 10 percent, said Bruce Peterson, president of the Minnesota Corn Growers Association.

“In the past, we really targeted major markets,” added Peterson, whose group has teamed with state agriculture officials and the American Lung Association to invest in ethanol availability. “But we really want to get out to the rural areas.”

The coalition hopes to work with chains of filling stations willing to install 20-to-40 blender pumps at a time among their properties, Peterson said.

Only Florida, which will be funded for an estimated 892 pumps, and Texas, which will be funded for 763, will get more than Minnesota. Nationwide, USDA envisions 4,880 new pumps capable of blending different grades of ethanol.

Vilsack touted the investment as proof of the Obama administration’s commitment to renewable energy. In speaking to reporters, the agriculture secretary also took aim at petroleum producers who have undertaken a massive lobbying and advertising campaign to repeal the renewable fuel standard (RFS) that mandates annual production levels of ethanol.

“Yesterday, the petroleum industry, in a research project that it helped to fund, suggested in a preposterous way that fuel prices could go up to $92 a gallon if the RFS were supported fully and completely,” Vilsack said. He called the conclusion “absurd.”

Minnesota has been among the nation’s leaders in pushing the use of renewable fuels. The state mandates that all fuel sold contain at least 10 percent ethanol. The Environmental Protection Agency says cars made after 2001 are able to use up to E15 (15 percent).

The blender pumps the state will build with the USDA matching grant will be capable of pumping up to E85, a fuel almost entirely composed of ethanol.

As for the impact of that on overall fuel prices, Peterson, like Vilsack, says they should come down, not go up as the petroleum industry projects. Nevertheless, with Senate and House members being lobbied hard by the oil industry and advertisements running in prime time, Vilsack said he hopes Congress understands the importance of renewable fuels to the economy as well as the environment.

“I don’t understand,” added Peterson, “how creating competition is going to drive prices up.”