Funds to Expand Blender Pumps

OMAHA (DTN) -- The number of ethanol blender pumps at fuel stations nationwide could double with $100 million in funding USDA announced Friday, the same day EPA released Renewable Fuels Standard volumes.

EPA proposed higher Renewable Fuel Standard requirements for 2014-16 than initial proposals from the agency indicated. Those initial proposals caused controversy within both the petroleum and renewable-fuels industries last year. EPA reported a total renewable fuel requirement of 15.93 billion gallons for 2014.

EPA also proposed a 2015 RFS volume obligation of 16.30 billion gallons, about 9% higher than the 2014 levels, and a 2017 volume obligation of 17.40 billion gallons.

Agriculture Secretary Tom Vilsack announced USDA will provide $100 million for the Biofuels Infrastructure Partnership, which will provide competitive grants to match funding for state-led efforts to promote higher ethanol blend levels such as E15 and E85. States that are able to provide matching one-to-one ratio funding will receive higher consideration for those grants, USDA stated.

"American-made, clean energy sources support the environment, reduce our dependence on foreign oil, create jobs and sustain the economy in rural communities across the country. We are fortunate that our farmers are producing record amounts of feedstock for these fuels," Vilsack said. "However, a combination of factors including lower commodity prices and reduced demand for feed as the poultry industry recovers from highly pathogenic avian influenza, are creating uncertainty for America's corn and soybean producers. With this partnership, USDA is helping to ensure the infrastructure is in place for consumers to access more renewable fuels, expand marketing opportunities for farmers, and grow America's rural economies."

Currently, E15 can only be found in slightly more than 100 gas stations across the country, according to the Renewable Fuels Association. E85 pumps are much more common with about 3,000 stations nationally offering 85% ethanol blends.

USDA noted that while the country is now exporting more than $2 billion of ethanol, the U.S. needs to better invest in infrastructure to use more of that ethanol domestically.

USDA's partnership will help support the installation of more fuel pumps supplying higher blends of renewable fuel by partnering with states to fund innovative, public-private partnerships to test more comprehensive approaches to marketing such blends, USDA stated.

To formally launch this infrastructure partnership, USDA will post a notice in June to solicit applications from states for the grants.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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