June 6, 2015
By Russell Hubbard
U.S. Agriculture Secretary Tom Vilsack said Friday that his agency has initiated a $100 million federal grant program to encourage installation of gas station fuel pumps capable of dispensing blends made with a greater percentage of ethanol.
In late May, the Department of Agriculture said its Biofuels Infrastructure Partnership has budgeted $100 million in matching funds for states willing to invest their own money in incentives to encourage the retail sale of higher ethanol blends, such as the E15 and E85 varieties that contain 15 percent and 85 percent ethanol.
“We have to figure out ways to get more E85 and E15 access,” Vilsack said in an interview. “This could expand the number of service-station pumps by 10,000 or more.”
Iowa is the largest ethanol producer with 42 plants, followed by Nebraska, with 24. The industry in Nebraska has an economic impact of $5 billion per year, according to a University of Nebraska-Lincoln study released this year.
Ethanol producers, however, have been up against the so-called “blend wall,” or the point at which formulations, such as E10, are insufficient to get all the envisioned production into the nation’s gas tanks at current levels of U.S. fuel consumption.
Last week, the Environmental Protection Agency set biofuel blending requirements for 2015 and 2016 that were seen as a compromise between what ethanol supporters and critics wanted, but which industry observers said will require the adoption of higher blends.
Shannon Textor, a spokeswoman for the Iowa Corn Growers Association, said that the group supports efforts to assist retailers in offering higher blends and that it is evaluating the specifics of the grant program. Todd Sneller, administrator of the Nebraska Ethanol Board, also said that his group is evaluating the grant program and that efforts to sell higher ethanol blends are needed.
Vilsack, a former governor of Iowa, also said Friday that U.S. exports of ethanol are rising and that foreign trade benefits Nebraska and Iowa. He said Congress should allow President Barack Obama to confer “fast-track status” to a major in-progress trade agreement, the Trans-Pacific Partnership, which would do away with barriers such as tariffs between the United States and 11 mostly Asian nations.
The proposal has been opposed by some organized labor and farm groups that say earlier free trade pacts, such as the North American Free Trade Agreement, have cost jobs and not boosted exports.
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