Following the announcement by USDA on Friday, May 29 to commit $100 million to help fund infrastructure to double the number of blender pumps currently available, the Iowa Renewable Fuels Association (IRFA) issued the following statement.
"The renewable fuels community is thrilled to see the USDA's latest commitment to expand availability of higher ethanol blends. Consumers will greatly benefit from greater access to these cleaner-burning, lower-cost fuels. By encouraging investment in the necessary infrastructure, more motorists will be able to take advantage of safe and economical E15 and E85, providing greater competition at the pump and wider fuel choice. The Iowa ethanol industry stands ready and willing to provide the additional gallons for higher blend levels that this program could generate."
USDA's announcement was good news, EPA's was not
USDA's announcement of its new program to support renewable fuel infrastructure was made last week the same morning the U.S. Environmental Protection Agency released its new proposed biofuel blending requirements under the Renewable Fuel Standard (RFS) for years 2014, 2015 and 2016. "We aren't happy with the EPA announcement," says Lucy Norton, managing director of IRFA. EPA is proposing to reduce its volume targets for the RFS to levels below those mandated by federal law. The RFS targets announced by EPA on May 29 are an 11.27 billion gallon shortfall over the three years for total biofuels, well below the targets called for by Congress in the law."
The unwillingness of EPA to adhere to the targets set forth in the law will continue to cause capital investment to turn away from the U.S. renewable fuel sector in favor of foreign investments, says Norton.
Wants to double number of higher blend renewable fuel pumps
On May 29, U.S. Ag Secretary Tom Vilsack announced USDA 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 1-to-1 ratio in funding will receive higher consideration.
"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 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."
Higher blends of renewable fuels needed, so are pumps
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% ethanol, limiting the amount of renewable energy consumers can use to fuel their cars. This new USDA partnership will help support 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 U.S. exported more than $2 billion dollars of ethanol last year, making the U.S. the world's largest exporter of ethanol. Also, the U.S. has become a market leader in export of high-quality distillers 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 U.S. must do the same to remain competitive, says Vilsack.
Blender pump projects funded by grants will expand markets
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, he says. The 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.
Vilsack recognizes 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.
USDA helping jumpstart advanced biofuels with BCAP
USDA has also helped jumpstart efforts to provide a reliable supply of advanced plant materials for biofuels. Through its Biomass Crop Assistance Program (BCAP), for example, USDA is incentivizing more than 850 growers and landowners farming nearly 48,000 acres to establish and produce dedicated, non-food energy crops for delivery to energy conversion facilities.
To ensure those feedstocks are put to use, USDA has invested in the work needed to create advanced biofuels refineries. USDA has supported efforts to build six new biorefineries to produce advanced biofuels in Louisiana, Georgia, Oregon, Nevada, North Carolina and Iowa, in addition to two existing facilities in New Mexico and Florida previously supported by the program.
USDA has also worked with agencies to strengthen markets for biobased products. Approximately 2,000 products now carry USDA's BioPreferred label, and approximately 150 applications for the BioPreferred label are in process. Companies in over 40 countries on six continents are now participating in USDA's BioPreferred program.
USDA has partnered with the U.S. Navy and Department of Energy to accelerate the development of domestic, competitively-priced "drop-in" diesel and jet fuel substitutes. Awards under the Defense Production Act were announced in 2014 for three companies (Fulcrum Sierra Biofuels, LLC; Emerald Biofuels, LLC; and Red Rock Biofuels, LLC) to scale up production capacity to supply the U.S. Navy with over 100 million gallons per year of advanced drop-in biofuel beginning in 2016 and 2017 at a price competitive with their petroleum counterparts.
Vilsack says USDA has invested $332 million over the past six years to accelerate research on renewable energy ranging from genomic research on bioenergy feedstock crops, to development of biofuel conversion processes and costs/benefit estimates of renewable energy production.