Vilsack: USDA will continue to push for blender pump expansion

By Kris Bevill | August 18, 2011

The USDA’s Aug. 17 announcement of 900 Rural Energy for America Program grants included just 21 awards for blender pumps. USDA officials promise, however, that more funding is on the way. The announcement highlighted state-approved projects for which grant amounts do not exceed $20,000. A USDA representative said the national office will announce more awards for blender pump project assistance by mid-September. The agency representative could not say exactly how many blender pump projects would be included on the list, but said the project awards will predominantly be greater than $20,000 each.

The USDA has been aggressively promoting the expansion of blender pumps and biofuel infrastructure since last fall when it announced a goal of installing 10,000 blender pumps in the U.S. within the next five years. In a conference call with reporters on Aug. 18, Secretary of Agriculture Tom Vilsack said his agency will continue to push for expanded infrastructure, perhaps through other programs within the USDA.

“We’re working very hard to work with petroleum marketers and convenience store operators to see if we can encourage and incent them,” he said. “Part of the problem is a lot of these marketers are in urban areas which don’t qualify under our REAP provisions. We’re working with other programs within the USDA to see if we might be able to provide help and assistance to some of the larger petroleum marketers who have interest in this program.”

This year was the first time that blender pump projects were allowed to apply for the REAP program. But in order for any project to qualify for REAP funding, applicants must be located in areas with populations of 50,000 or less. That program stipulation immediately raised concerns for Redwood City, Calif.-based alternative fuel retailer Propel Fuels Inc. CEO Matt Horton, who told EPM earlier this year that he was doubtful of the overall effectiveness of a program. “Our experience has shown that the highest-performing fuel stations don’t tend to be in those rural areas,” he said. “So a lot of the best real estate is not eligible for this program, which is a bit disappointing.” Additionally, most of the currently installed blender pumps in the U.S. are already located in rural areas, where cooperatives and smaller fuel retailers have taken an early-adopter approach to increased blends of ethanol and biodiesel. Propel unveiled its own blender pump expansion plan on Aug. 18, announcing an agreement with Pacific Convenience and Fuels to install its alternative fuel pumps at more than 80 of the fuel retailer’s sites located on the West Coast and in Colorado.

Vilsack, who conducted the Aug. 19 media call from Iowa, said he recently spoke with executives at Des Moines, Iowa-based retail fuel chain Kum & Go LC, which operates 430 gas stations in the Midwest, about its concerns regarding funding for blender pumps in urban areas and asserted that the USDA will work to help provide funding to those types of retailers. “We’re going to continue to market this; we’re going to continue to push it,” he said. “It probably is a little difficult to do because Congress, or at least the House budget, basically wiped out funding for REAP and essentially suggested it shouldn’t be used for blender pumps. That maybe created some confusion in the countryside, but we’re going to continue to market this as long as we have REAP resources.”

The 21 state agency-approved blender pump projects announced on Aug. 17 are located in 13 states and account for about $292,000 of the total $11.6 million awarded in this round of funding. California and Minnesota each received three blender pump project approvals. Missouri, New Mexico, Ohio and South Dakota each approved two projects while Illinois, Indiana, Kansas, North Carolina, North Dakota, Oklahoma and Texas each approved one project. As noted earlier, none of the grants exceed $20,000. Two projects received only about $6,700 each. A complete list of the awards can be viewed here.