USDA stops in MN, MI to discuss blender pumps, research grants

By Kris Bevill | April 21, 2011

The USDA continued its recently launched, fast-paced, biofuels-focused tour of the Midwest on April 20 with stops in Minnesota and Michigan. The tour is part of the USDA’s effort to draw attention to its revised Rural Energy for America Program financing opportunities and to focus attention on its support for the domestic biofuels industry. Secretary of Agriculture Tom Vilsack traveled from Iowa, where he teamed up with EPA Administrator Lisa Jackson on April 19 to tour a biodiesel facility and attend a renewable fuels roundtable, to a St. Paul suburb where he met with state and local representatives and attended a roundtable discussion held at CHS Inc.’s headquarters in Inver Grove Heights.

“CHS was honored to host this gathering and to provide a forum for sharing a wide range of viewpoints on the important topic of renewable energy,” CHS President and CEO Carl Casale said. “We’ve been committed to the marketing and distribution of renewable fuels for four decades as a means of both adding value for producers and addressing our nation’s energy needs.”

CHS is a diversified energy, grains and foods company owned by its 300,000 shareholders, which include a large number of farmers, ranchers and cooperatives. The company operates petroleum refineries and also markets ethanol to fuel blenders. Among its many other activities, the company has played a notable role in expanding the biofuels market through the installation of blender pumps at many of its Cenex-branded retail stations. Drew Combs, vice president of commercial supply and renewable fuels marketing at CHS, said the company not only markets ethanol, but also sells blender pumps to its retailers who choose to upgrade to those dispensers. “We’re very particular about that because of the UL listings and approvals that are required,” he said. “So we’re very integrated with that blender pump technology.”

Approximately 370 Minnesota retail fuel stations offer fuel blends higher than E10, and 97 of those locations are Cenex stations, according to CHS. Nationwide, 10 percent of the estimated 2,400 retail stations offering fuel blends greater than E10 are Cenex locations, Combs said.

Allowing retailers to apply for REAP funds to install blender pump dispensers is a big step towards expanding the ethanol market, Combs said. Blender pump conversions at retail sites can range in cost from $25,000 to $100,000, he said, and financial assistance should allow some retailers to take advantage of the opportunity to provide a choice to their consumers.

During the roundtable discussion, which was also attended by Sen. Amy Klobuchar, D-Minn., and Gov. Mark Dayton, Vilsack addressed the importance of maintaining some form of ethanol tax subsidy rather than sending the Volumetric Ethanol Excise Tax Credit “over a cliff.” Combs said CHS supports this policy suggestion. “We’re supportive of the position of not eliminating the credit overnight, but we do see that we may need to ratchet that back down over time in order to allow the market to transition in a more timely manner,” he said.

In Michigan, Deputy Secretary of Agriculture Kathleen Merrigan toured Michigan State University’s cellulosic ethanol pretreatment lab and pilot plant and announced three grants awarded to university biofuels research projects. Funding for the grants was provided through the USDA National Institute of Food and Agriculture’s Agriculture and Food Research Initiative. “We can produce clean energy right here at home while boosting rural economies, and Michigan is leading the way with this critical research,” she said. “These research projects will give us the scientific information needed to support biofuel production and propel us to out-educate, out-innovate and out-build in the field of renewable energy to help America win the future.”

The three grants awarded to MSU total nearly $3 million. One will quantify the impacts of woody biomass feedstock production systems on carbon sequestration in soils and will seek to determine the net environmental benefits and sustainability of biomass energy production in the northern Great Lakes Region. Another project will research grass-associated pests to determine what bioenergy crops are most suitable for use in the Midwest in terms of sustainable agriculture and energy production. The third project will develop a cost-effect glycerol-based succinate fermentation process to help increase the sustainability of biodiesel production.

USDA plans to continue to spread the word on its modifications to REAP via workshops to be held throughout the country over the next month. A tentative schedule lists upcoming stops in Madison, Wis., and Beatrice and Norfolk, Neb., by the end of April.