By Todd Neeley
DTN Staff Reporter
OMAHA (DTN) -- As the American Petroleum Institute continues to rail against the Renewable Fuel Standard partly on the basis there isn't enough infrastructure in place to expand beyond E10, USDA Thursday announced a 21-state, $100-million initiative to nearly double the number of blender pumps available across the country.
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 including E15, E30 and E85.
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.
In making the announcement to reporters Thursday, Vilsack called out the American Petroleum Institute for the release of a study Wednesday that claims allowing the Renewable Fuel Standard to continue on its current path would dramatically increase the cost to consumers.
"It does underscore the significance and importance of the biofuels industry," Vilsack said about the API study. "Obviously, it is of increasing concerns to the oil industry. The study on its face is absurd. We're going to continue to work hard so consumers have access (to higher ethanol blends). When they do, they purchase higher blends."
In all, the USDA money is expected to add more than 4,800 new blender pumps at some 1,400 fueling stations across the country.
The money is being provided, Vilsack said, as a result of the 21 states filing applications. In all, the state of Florida stands to gain the most blender pumps at 892. The remaining list includes: Colorado 28; Illinois 428; Indiana 110; Iowa 187; Kansas 174; Louisiana 110; Michigan 89; Minnesota 620; Missouri 171; Nebraska 80; North Carolina 190; North Dakota 90; Ohio 148; Pennsylvania 308; South Dakota 74; Texas 763; Virginia-Maryland 191; West Virginia 107; and Wisconsin 120.
According to a USDA news release, the money awarded still falls short of the $130 million requested.
Iowa Gov. Terry E. Branstad said the state will use the funds for the new "Fueling Our Future 100" initiative. According to a news release, Iowa requested about $5 million. The state has set a goal of adding 100 new fueling sites in the next 18 months, including nearly 190 blender pumps.
"Our state is a proud leader in the production and use of homegrown ethanol and biodiesel," Branstad said in a news release. "I hope that other states will follow Iowa's leadership in an industry that supports agriculture, creates rewarding careers and increases family incomes in rural America, provides lower cost alternatives for consumers and reduces our dependence on foreign oil."
Tom Buis, chief executive officer of Growth Energy, said in a statement Thursday the USDA money comes at a good time for the biofuels industry.
"Today's announcement by the USDA is a tremendous win for American consumers," he said. "The USDA is helping advance consumer choice and market access for higher blends of cleaner-burning, American-made, renewable fuels. The USDA, through these matching grants, will help build out the necessary infrastructure to increase market access for higher ethanol blends.
"It is unfortunate that the obligated parties refuse to follow the law and blend increasing amounts of renewable fuel, but the steps by the administration and Secretary Vilsack will ensure higher ethanol blends, such as E15, penetrate the marketplace, and provide consumers with a choice and savings they deserve."
Renewable Fuels Association President and Chief Executive Officer Bob Dinneen said in a statement EPA should take lessons from USDA's work.
"While the EPA is thwarting investment in private-sector infrastructure by proposing to significantly slash the 2014-2016 biofuel volume obligations contained in the Renewable Fuel Standard, USDA understands what is necessary to assure consumer access and move our nation's biofuels industry forward," he said.
Ray Defenbaugh, chairman of the "Prime the Pump" campaign, said in a statement that blender pumps help the industry break beyond the blend wall.
"We applaud the Department of Agriculture and Secretary Vilsack for their vision with the biofuel infrastructure partnership grant program," he said. "This assistance in building out retail infrastructure is not only good for the American farmer, but it is also great for the American motorist who will now have more opportunities to buy higher octane fuel at a lower cost.
"The renewable fuels industry has grown to 10% of the fuel supply, and giving motorists the opportunity to buy more cleaner, greener, American-made, renewable fuels reduces our need for foreign oil, creates jobs and makes our air cleaner."
Todd Neeley can be reached at [email protected]
Follow him on Twitter @ToddNeeleyDTN
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