USDA doles out $100M to boost use of gasoline-ethanol blends

Source: Amanda Peterka, E&E reporter • Posted: Friday, September 11, 2015

The Agriculture Department today awarded 21 states a total of $100 million for installing pumps at gas stations that can handle higher blends of ethanol.

The funding will nearly double the number of pumps in the country and increase the use of gasoline-ethanol blends such as E15 — which contains 15 percent ethanol — and E85 for flex-fuel cars. Most of the gas stations in the nation currently sell gasoline containing 10 percent ethanol.

Agriculture Secretary Tom Vilsack said the funding was part of USDA’s effort to help boost the biofuels sector, which he said reduces emissions, lowers the price of gasoline and reduces U.S. reliance on foreign imports of petroleum.

Partners in the 21 states have agreed to match the $100 million dollar for dollar, Vilsack said. The money will create almost 5,000 new pumping systems in those states, he said.

The “Biofuels Infrastructure Partnership” comes as U.S. EPA is weighing comments on a proposal to lower refiners’ ethanol requirements for 2014, 2015 and 2016 compared with the levels that Congress wrote into the federal renewable fuel standard.

EPA proposed the lower requirements partly because of the “blend wall,” or a lack of infrastructure in the nation compatible with higher blends of ethanol. USDA first announced the availability of the $100 million in awards on the same day this past May that EPA unveiled its proposal.

Oil industry groups have urged EPA to set even lower standards for the biofuels industry, arguing that EPA’s proposal was still unachievable because of the blend wall. Yesterday, the American Petroleum Institute released a report that found setting targets at the levels that Congress intended would lead to huge spikes in gas and diesel prices (E&ENews PM, Sept. 9).

Vilsack today pushed back against that report, calling it “preposterous.” Biofuel groups, which also criticized the API findings, today praised USDA for the new infrastructure program.

“BIP is a matching grant program, which means USDA also challenged states and ethanol supporters to step up and make equal or greater amounts of infrastructure funding available to station owners,” said American Coalition for Ethanol Senior Vice President Ron Lamberty. “The intended result is nearly a quarter of a billion dollars petroleum marketers can use to buy equipment and offer more ethanol blends to consumers.”

On the heels of USDA’s announcement, fiscal conservative group Taxpayers for Common Sense released a report detailing millions of dollars of government assistance that the biofuels industry receives.

The group called on the government to scale back its role in boosting the ethanol industry.

“Biofuels have been sold as a tonic to achieve U.S. energy independence, reduce greenhouse gas emissions and spur rural economic development,” Taxpayers for Common Sense President Ryan Alexander said. “They have not delivered on these promises, and more government subsidies is not the answer.”