Agriculture Secretary Tom Vilsack has announced that USDA will provide federal assistance to help owners of the nation's fueling stations buy up to 10,000 pumps capable of dispensing varying ethanol blends. Speaking last week at the National Press Club, Vilsack said the program would encourage the growth of biofuels by making higher blends of ethanol more conveniently located.
Vilsack did not say how much assistance the federal government will provide. He said, though, that the government will provide matching funds out of existing rural development money. Vilsack said blender pumps cost between $25,000 and $50,000. If the department covers half the cost of the pumps, it could cost as much as $250 million.
Vilsack said the "missing link" in attaining the government's goal of 36 billion gallons of renewable fuel in 2022 is "the lack of convenient locations to obtain higher blend rates."
Vilsack also announced that USDA has published in the Federal Register a final rule 22 establishing the biomass crop assistance program. The program will provide up to 75 percent of the cost of establishing new biomass energy crops, as well as annual rental payments to cover the cost of transition from current cash crops.
Vilsack also announced that a department report that said replacing petroleum gasoline with less expensive ethanol would reduce domestic spending on motor fuels, with cost savings for households. That report, in PDF format, is available at this Web site.
Vilsack also said he supports a temporary extension of 45-cent-per-gallon ethanol blender tax credit, but added that he believes it should be phased out. Under current, the tax credit will expire Dec. 31 unless Congress extends it during the upcoming lame duck session. The secretary added that he believes Congress should reinstate the $1-per-gallon biodiesel production tax credit that expired last Dec. 31.
The Des Moines Register reports that the ERS report that Vilsack cited concludes that if the tax credits are extended, the national biofuels mandate would reduce gross domestic product by as much $6 billion, depending on the price of oil, the study said. And, the newspaper notes, a recent study by the Congressional Research Service estimated that the cost to taxpayers of biofuel subsidies could rise from $6.7 billion this year to $27 billion in 2022, if the existing policies are continued.
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