Biofuels Market Expansion Act calls for more FFVs, blender pumps

By Holly Jessen | January 27, 2011

The Biofuels Market Expansion Act of 2011 has been introduced in the U.S. Senate, with a goal of increasing the number of flex-fuel vehicles (FFVs), blender pumps and renewable fuel pipelines. “Biofuels displace close to 10 percent of our gasoline supplies, and they have the potential to make significantly larger contributions,” said Tom Harkin, D-Iowa, who rolled out the bill Jan. 25. “[This] is an important step in our overall energy policy and a job generator for Iowa and our nation as a whole.”

Cosponsors are Sen. Al Franken, D-Minn., Sen. Amy Klobuchar, D.-Minn., and Sen. Tim Johnson, D-S.D. As of yet, there is no companion bill in the U.S. House of Representatives.

The bill mandates that increasing number of FFVs be manufactured in the U.S., starting with 50 percent in 2015 and by 2016 the bill calls for 90 percent of all vehicles be FFVs.

For blender pumps, the bill would require major fuel distributors to install at least one blender pump at gas stations they own or where they market fuel. The percentage increases over time, starting at 10 percent in 2014 and reaching 50 percent by 2020. Major fuel distributors with less than the required number of pumps will be allowed to trade for credits. The legislation, if passed, would define a major fuel distributor as one that owns or directly markets fuel from a refinery but does not include businesses that market fuel through less than 50 retail fueling stations.

The bill also addresses funding for biofuels infrastructure. It would authorize grants of up to 50 percent for blender pumps, tanks and associated equipment. It appropriates $50 million in 2012, increasing yearly to $350 million in 2016. Major retailers would not be eligible for the grants. Finally, the bill would authorize DOE loan guarantees for loans covering 80 percent of project costs for renewable fuel pipelines.

Harkin, the former chairman and now senior member of the Senate Agriculture Committee, is a long-time supporter of biofuels. He urged the U.S. EPA and President Barack Obama to quickly approve E15 and has long wanted to see the items included in the market expansion bill become a reality.

The American Coalition for Ethanol said it supports the bill and urged other legislators to sign on so it can move forward. Recent news that E15 is now approved by the EPA for vehicles model year 2001 to present is appreciated, said Brian Jennings, executive vice president of ACE. However litigation and EPA’s E15 pump labeling rule is creating uncertainty about when the fuel will be available to consumers. “Flexible fuel vehicles and blender pumps allow a wide range of fuels to be offered by the gas stations and selected by the motorists, ensuring that homegrown renewable fuels have access to the marketplace and that motorists have the ability to choose the best fuel for their own vehicle,” he said.

Growth Energy called the bill to put more FFVs in consumers’ garages and more blender pumps at gas stations “forward thinking.” The group has said repeatedly that U.S. ethanol needs access to the market to compete against foreign oil. “Just as our Fueling Freedom proposal outlines, we believe this is the only way we can reform and open the market – and give consumers greater choice at the pump,” said CEO Tom Buis.