Gas Stations Get Aid to Sell More Ethanol
Wall Street Journal, April 9, 2011
http://online.wsj.com/article/SB1000...724394758.html
By BILL TOMSON
The Department of Agriculture will soon be helping gasoline stations install new pumps that can dispense fuel with higher ethanol content, USDA Secretary Tom Vilsack said.
The USDA will soon offer grants and loan guarantees for the installation of costly new "blender pumps" so drivers can purchase fuel with a higher ratio of corn-based ethanol.
Most gasoline sold in the U.S. is 10% ethanol, but a growing fleet of flexible-fuel vehicles can run on an 85%-ethanol blend, or E85. However, there are fewer pumps available to dispense it, Mr. Vilsack said.
In the U.S., only about 2,350 fueling stations out of more than 110,000 offer E85 pumps, according to the USDA.
Gloria Bergquist, vice president of the Alliance of Automobile Manufacturers, said the number of E85 vehicles in the U.S. is growing about 10% each year. In 2008, there were 6.1 million such vehicles; now, the number has increased to about 8.2 million.
New blender pumps, which Mr. Vilsack said cost about $120,000 to install, also would make it easier for drivers of conventional cars to increase the ethanol content of the gasoline they buy. He declined to estimate the total expenses, saying he didn't know how many station owners would seek the guarantees and grants.
Newer vehicles can safely run on gasoline with a 15% blend of ethanol, according to the Environmental Protection Agency.
The USDA goal, Mr. Vilsack said, is to increase the number of flexible-fuel pumps across the nation by 10,000 over the next five years, in accordance with President Barack Obama's pledge to cut U.S. dependency on foreign oil by one-third by 2025.
Industry opponents include livestock producers, who say subsidies push corn prices higher, and some taxpayer groups who say the government can't afford such subsidies.
This year, the ethanol industry is expected to consume five billion bushels of corn, almost as much as the 5.2 billion bushels that will be used for livestock feed, according to USDA data.
U.S. farmers produced 12.4 billion bushels of corn last year. The USDA already has the funds it needs to help finance the new pumps, a spokeswoman said. Congress created the Rural Energy for America Program in the 2008 farm bill to help fund renewable-fuel projects, and it can be broadened to include financing for the blender pumps.
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