SD to launch blender pump incentive program

By Kris Bevill | December 28, 2011

The South Dakota Governor’s Office of Economic Development will begin accepting applications on Jan. 9 for financial assistance to help retailers in the state install blender pumps. State legislators recently approved a proposal agreed to earlier this year by the state’s ethanol producers that will redirect $3.5 million over five years away from the state’s Ethanol Producer Payments Program in order to fund the Ethanol Infrastructure Incentive Program. The GOED said $950,000 will be available for use in 2012.

“Ethanol use is a very simple and real way South Dakotans can decrease their dependence on foreign oil and promote a homegrown product,” said Dana Siefkes-Lewis, president of South Dakota Ethanol Producers Association. “Through this grant program, we hope more gas stations make ethanol blends available to South Dakota consumers, in turn supporting South Dakota’s economy and those employed by the ethanol industry.”

Grants will be available to fund up to $25,000 for the installation of a station’s first blender pump. Applicants are also eligible to receive up to $10,000 for the installation of each additional pump. Hunter Roberts, South Dakota energy policy director, said state officials hope to distribute the entire $950,000 in 2012. “Whether that results in many locations with a few pumps or a few locations with many pumps, we’ll consider it a win,” he said. “Our bottom-line is increasing access to our homegrown ethanol products, and we’re pleased to offer the industry this shot in the arm.” Most of the funds available in 2012 will be awarded on a first-come, first-serve basis. The final $190,000, however, will be awarded on a competitive basis.

Rick Serie, director of market development for South Dakota-based American Coalition for Ethanol, commended the state for its efforts to expand ethanol availability. “The South Dakota Ethanol Producers and the state have shown leadership in putting together this effort,” he said. “This state has continually looked at ways to get more ethanol to consumers and this program will go a long way towards supporting ethanol plants, hundreds of South Dakotans employed by those plants, and the thousands of farmers and local owners that benefit from the economic activity created by ethanol production.”

South Dakota was the first state to allow ethanol blender pumps. Currently, there are about 100 blender pumps in the state, according to the GOED. Fifteen of the nation’s ethanol plants are located in South Dakota, representing more than 1 billion gallons of production capacity. The world’s largest ethanol producer, Poet LLC, is based in South Dakota and operates five facilities there in addition to its research center, which has the capacity to produce another 11 MMgy. More than 900 people are directly employed by South Dakota’s ethanol industry, according to information from the GOED. “Ethanol production is a very effective way to increase the value of our agriculture base,” said Gov. Dennis Daugaard. “By making more ethanol blends available, we are improving producer opportunities, creating jobs and stabilizing our domestic fuel supplies.” 

The GOED, together with the South Dakota Ethanol Producers Association, ACE, Growth Energy, the South Dakota Petroleum and Propane Marketers Association and the South Dakota Association of Cooperatives, will hold three days of informational meetings about the program at locations around the state beginning on Jan. 11. A complete list of dates and locations, as well as application information, is available on the GOED’s website.