USDA to invest up to $100M to double number of higher-blend renewable fuel pumps

May 31, 2015 |

Seccretary Tom Vilsack - Advanced Biofuels Enegry Leadership ConferenceIn Washington, US Agriculture Secretary Tom Vilsack announced that the U.S. Department of Agriculture will invest up to $100 million in a Biofuels Infrastructure Partnership to support the infrastructure needed to make more renewable fuel options available to American consumers.

Specifically, USDA will administer competitive grants to match funding for state-led efforts to test and evaluate innovative and comprehensive approaches to market higher blends of renewable fuel, such as E15 and E85. States that are able to provide greater than a one-to-one ratio in funding will receive higher consideration.

Today’s announcement marks USDA’s latest effort to increase renewable fuel use in the United States. To formally launch this infrastructure partnership, USDA will post a Notice of Solicitation of Applications in June.

Higher blends of renewable fuel offer significant potential for increasing the use of renewable fuels in the U.S. gasoline pool, but currently, the typical gas pump can deliver fuel containing a maximum of 10 percent ethanol, limiting the amount of renewable energy consumers can use to fuel their cars. This  new USDA partnership will help support the installation of fuel pumps capable of 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. This new investment seeks to double the number of fuel pumps capable of supplying higher blends of renewable fuel to consumers, such as E15 and E85.

The United States exported more than $2 billion dollars of ethanol last year, making the United States the world’s largest exporter of ethanol. Additionally, the United States has become a market leader in the export of high-quality distiller’s dried grains (DDG), a byproduct of ethanol production used as a high-protein feed for livestock and poultry. Other countries are investing in clean energy technologies because they realize the tremendous economic potential of these energy sources, and the United States must do the same to remain competitive. The projects funded by these competitive grants will expand markets for farmers and help them diversify their rural energy portfolios, support rural economic growth and the jobs that come with it, and ultimately give consumers more affordable options at the pump.

“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.”

Secretary Vilsack has recognized the biobased economy as one of the four pillars of rural economic growth, in addition to production agriculture, local and regional food systems, and conservation and natural resources. Biofuels lower greenhouse gas emissions, reduce dependence on foreign oil, give businesses and consumers more energy options and create well-paying American jobs.

Part of overall multi-point USDA strategy

The action on blender pumps is part of a multi-faceted strategy at USDA to increase use of biobased renewable fuels, including:

• Incentivizing more than 850 growers and landowners farming nearly 48,000 acres to produce dedicated, nonfood energy crops for delivery to facilities that produce renewable energy.

• Doubling the number of farms using a renewable energy producing system since 2007. Between 2009 and 2014, USDA has supported 2,200 wind and solar renewable electricity generation projects, enough to power more than 130,000 homes annually.

• Building 8 new biorefineries to produce advanced biofuels.

• Funding 93 anaerobic digesters to help farm operations produce electricity from captured methane. Thanks to a partnership with the Innovation Center for U.S. Dairy to reduce greenhouse emissions across the supply chain, most of these projects are at dairy operations.

• Accelerating the development of domestic, competitively-priced “drop-in” diesel and jet fuel substitutes. Last year, three companies were awarded a contract to supply the U.S. Navy with over 100 million gallons per year of advanced drop-in biofuels beginning in 2016 and 2017 at a price competitive with their petroleum counterparts.

• Investing in two commercial aviation biofuel projects including a New Mexico facility which produces “green” crude oil from algae, which can be refined into transportation fuel; and a Nevada biorefinery which will produce aviation biofuel from municipal solid waste.

• Working with farmers, ranchers and rural communities to install renewable energy systems and energy efficiency solutions. This will generate and save more than 9.4 billion kWh—enough energy to power 820,000 American homes each year.

• Contributing to renewable energy research through $332 million in funding for projects ranging from genomic research on bioenergy feedstock crops, to development of biofuel conversion processes and costs/benefit estimates of renewable energy production.

• Supporting U.S. exports of distiller’s dried grains (DDG), a byproduct of ethanol production used as a high-protein feed for livestock and poultry. U.S. DDG exports have tripled since 2008 and reached a record $3.4 billion last year.

• Working to strengthen markets for biobased products. Approximately 2,000 products now carry USDA’s BioPreferred label, which helps to clearly identify biobased products made from renewable resources to consumers. Companies in over 40 countries on six continents are now participating in USDA’s BioPreferred program.

Industry reaction

Bob Dinneen, president and CEO, Renewable Fuels Association

“The U.S. Department of Agriculture’s (USDA) announcement today of a significant investment in blender pumps stands in stark contrast to the Environmental Protection Agency’s (EPA) earlier decision that thwarts private sector investment in infrastructure. Clearly, Secretary Vilsack and USDA understand what is necessary to move this country’s renewable energy industry forward. Consumers across this country are applauding USDA today for its efforts to encourage a choice of high-octane, low-cost, domestically produced fuel at the pump. EPA should pay close heed.”

Tom Buis, CEO of Growth Energy

“Today’s announcement by the USDA is a tremendous win for American consumers. The USDA is helping advance consumer choice and market access for higher blends of cleaner burning, American made, renewable fuels. I would like to thank the administration and in particular, Secretary Vilsack, for his unwavering leadership and dedication to promoting America’s renewable fuels and helping bring a choice and savings to consumers when they fill up at the pump.

“This program will provide grants to states who then can, in turn, form public or private partnerships to help defer the costs of infrastructure enhancements for higher blends, such as adding blender pumps and retrofitting existing fueling facilities. By helping build out the necessary infrastructure, consumers will have increased choice at the pump. Higher blends, such as E15, give consumers a choice to use homegrown American biofuels that are less expensive, reduce our dangerous dependence on foreign oil and bolster local communities and our rural economy by creating jobs that will never be outsourced.”

Brent Erickson, executive vice president, BIO’s Industrial & Environmental Section

“We thank Agriculture Secretary Tom Vilsack and USDA for taking a positive step toward opening the market for homegrown, cleaner biofuels and ending U.S. reliance on foreign oil. Assisting fuel retailers in expanding choices for consumers at the pump is a constructive contribution to building U.S. energy independence.”

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