Senate bill introduced to expand ethanol market

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, October 2, 2013

Legislation introduced this week in the Senate would create a system of supports to build up the nation’s renewable fuel infrastructure and roll out gasoline that contains higher amounts of ethanol

The bill would create a $1 billion grant program for the installation of ethanol pumps at gas stations, require the Department of Energy to issue new regulations that compel fuel distributors to install at least one ethanol pump at half their gas stations by 2022, and create a loan guarantee program to fund renewable fuel pipelines.

Sen. Tom Harkin (D-Iowa) quietly introduced the bill Monday as the government shutdown took center stage.

According to a draft version of S. 1563 circulated Friday, the secretary of Energy would be required to issue grants to gas stations for the installation of blender pumps, or gas pumps that can blend any amount of ethanol in gasoline, from zero to 85 percent. The bill would authorize a total of $1 billion in appropriations for the blender pump grant program between fiscal 2014 and 2015.

The Harkin legislation would also require DOE to issue regulations that ensure that major fuel distributors — those that have branded or majority-owned gas stations around the country — install at least one blender pump at 10 percent of their gas stations by 2016. By 2022, major fuel distributors would be required to have blender pumps in at least half of their gas stations.

Along with forcing changes at the gas station, the bill would require the Department of Energy to issue regulations creating a loan guarantee program for ethanol pipelines; ethanol today is either transported by rail or by truck because it corrodes existing fuel pipelines. It also would require car manufacturers to ensure that they increase the percentage of automobiles and light-duty trucks that are capable of running on more than one fuel.

Original co-sponsors are Sens. Al Franken (D-Minn.), Amy Klobuchar (D-Minn.) and Tim Johnson (D-S.D.). The bill has backing from the renewable fuels industry, which has accused the oil industry of putting up roadblocks to higher ethanol use in vehicles.

Bob Dinneen, president and CEO of the Renewable Fuels Association, called the measure a “very wise, well-thought-out plan.”

“The Harkin bill will stop the foot-dragging and get the infrastructure in place to expand consumer options, which in turn will lead to a stronger, more energy-independent nation in the long run,” he said yesterday.

U.S. EPA regulations allow passenger vehicles with model years 2001 and newer to fill up with gasoline containing 15 percent ethanol, but the rollout of E15 has been slow to materialize because of concerns raised by oil industry groups and auto manufacturers over engine damage. There are currently about 40 stations in nine states selling E15.

Flex-fuel cars are able to take E85, a fuel containing at least 70 percent ethanol. Today, more than 3,000 gas stations in the nation offer E85, and there are about 15 million flex-fuel vehicles on the road, constituting about 6 percent of the entire U.S. vehicle fleet.

The Department of Agriculture has been awarding grants to gas station owners to install blender pumps through its Rural Energy for America Program, but the department’s efforts have been hampered by the lack of a new five-year farm bill (E&E Daily, Oct. 1).