Blender Pump Push

USDA Program Set to Pump $210 Million Into Biofuel Infrastructure

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Installing so-called flex-fuel pumps is designed to give consumers more choices at the pump, to include E15 and E85. (File photo by Matt Merritt, Poet)

OMAHA (DTN) -- A bumper crop of new biofuel blender pumps is on its way thanks to a better-than-anticipated response to a USDA grant program aimed at expanding the number of pumps across the country, USDA said on Wednesday.

In May 2015, USDA announced it was making available $100 million in grants through the Biofuel Infrastructure Partnership. To apply, states and private partners were required to match the federal funding by a 1-to-1 ratio.

The department received some $130 million in application requests, outpacing the $100 million that was available, USDA stated in a news release on Wednesday. With the matching commitments from state and private partners, the BIP will invest a total of $210 million in 21 states for the installation of nearly 5,000 pumps at some 1,400 fueling stations.

As part of their opposition to the Renewable Fuel Standard, oil industry groups have said the needed infrastructure wasn't in place to expand the market availability of higher ethanol blends such as E15 and E85.

Installing so-called flex-fuel pumps is designed to give consumers more choices at the pump, to include E15 and E85. The U.S. Environmental Protection Agency already has approved the use of E15 in vehicles 2001 and newer. In addition, the oil industry has said E85 is not catching on for lack of consumer demand, while data continues to show owners of flexible-fuel vehicles often have lack of access to E85.

USDA said in its news release Wednesday that the $210 million made available through the Biofuel Infrastructure Partnership would nearly double the number of flex-fuel pumps nationally.

"This major investment in renewable energy infrastructure will give Americans more options that not only will suit their pocketbooks, but also will reduce our country's environmental impact and bolster our rural economy," U.S. Agriculture Secretary Tom Vilsack said in the news release. "The Biofuel Infrastructure Partnership is one more example of how federal funds can be leveraged by state and private partners to deliver better and farther-reaching outcomes for taxpayers. The volume and diverse geographic locations of partners willing to support this infrastructure demonstrate the demand across the country for lower cost, cleaner, American-made fuels. Consumers will begin to see more of these pumps in a matter of months."

States participating in the program include Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, Virginia, West Virginia and Wisconsin.

Lack of expanded market access has been a key issue in the fight for the ethanol industry to maintain the Renewable Fuel Standard as it is written. Ethanol groups have maintained consumers tend to use more biofuels when given the choice at the pump. Oil industry groups continue to say consumers aren't expanding the use of biofuels because they don't want them.

Tom Buis, co-chairman of Growth Energy, said in a statement the USDA program will be important in expanding market access.

"Just six months ago, this was an idea on a piece of paper," he said. "Today, we are seeing first-hand the implementation of this program to increase market access for cleaner, homegrown, renewable fuels. The speed with which this program has been implemented clearly demonstrates that USDA and its state and private sector partners can indeed make good things happen.

"The Biofuel Infrastructure Partnership is helping us to further leverage industry funds to gain measurable market access in a far timelier manner than we could accomplish without the help Secretary Vilsack and the Obama administration is providing."

Blender pumps are considered to be an important component for the ethanol industry to break through the so-called blend wall, where total ethanol production exceeds the available E10 market. Those pumps would provide consumers more access to higher blends.

Proponents of the pumps also say they will help make way for second-generation biofuels such as cellulosic ethanol, which launched commercial production in the past 18 months, including a DuPont-operated plant in Nevada, Iowa, set to launch commercial production this week.

Todd Neeley can be reached at todd.neeley@dtn.com

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Todd Neeley