USDA to Help Finance 'Blender Pumps' to Boost Nation's Use of Ethanol

The Obama administration has set a goal helping to finance the installation of 10,000 flexible fuel pumps across the country over the next five years as a way to boost the amount of ethanol going into the nation's transport fuel supply.

The Obama administration has set a goal helping to finance the installation of 10,000 flexible fuel pumps across the country over the next five years as a way to boost the amount of ethanol going into the nation's transport fuel supply. The federal support will come in the form of both direct grants and loan guarantees.

Flex fuel pumps cost approximately $120,000 to install, which would result in an overall cost of $1.2 billion for all 10,000. Ideally, not all of the $1.2 billion would be borne by USDA.

"Flex-fuel pumps will give Americans a choice to purchase domestically produced renewable transportation fuels," said Agriculture Secretary Tom Vilsack, adding that the pumps will enable consumers to blend motor fuel with up to 85 percent ethanol for cars that can run on the higher ethanol blends. The administration said that the funding will come from USDA's rural energy for America program (REAP).

The program will be announced in an interim rule intended to clarify that the definition of renewable energy systems in the REAP includes flexible fuel pumps, sometimes referred to as "blender pumps," a clarification the department says is intended to provide fuel station owners with incentives to install the fuel pumps.

Congress created REAP in the 2008 farm bill to help fund renewable-fuel projects and specified that $60 million could be spent in fiscal 2010, $70 million in fiscal 2011 and $70 million in fiscal 2012.

In addition to flexible fuel pumps being eligible for funding under REAP, Vilsack noted that grants will be made available for audits of energy improvements and studies to determine the feasibility of renewable energy systems; and agricultural producers in non-rural areas will be eligible for REAP assistance. However, small businesses still must be located in rural areas to qualify for the program. This clarification makes REAP eligibility requirements consistent with those of other USDA energy programs, USDA said.

Recently, Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) said during a committee hearing that other fuel sources might never be fully explored because of the drive by ethanol supporters in Congress and the White House to increase use and demand for the fuel. 

"I'm concerned about overshooting the mark on maximizing E85 infrastructure," Bingaman said. He said he has hopes that other renewable fuels "such as algae-based biocrude or biobutanol will emerge to fill much of our renewable-fuel requirements in the future."

Vilsack said the department will continue its efforts to develop and identify cellulosic and advanced biofuels. Bingaman and other lawmakers should view USDA's latest effort to expand E85 distribution "as complementary, not contradictory, to our efforts to expand opportunities in biofuels," Vilsack added.

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