U.S. to Pay for Pumps to Sell More Ethanol

[Fuel Miser]

Gas Stations Get Aid to Sell More Ethanol
Wall Street Journal, April 9, 2011
http://online.wsj.com/article/SB1000...724394758.html
By BILL TOMSON

The Department of Agriculture will soon be helping gasoline stations install new pumps that can dispense fuel with higher ethanol content, USDA Secretary Tom Vilsack said.

The USDA will soon offer grants and loan guarantees for the installation of costly new "blender pumps" so drivers can purchase fuel with a higher ratio of corn-based ethanol.

Most gasoline sold in the U.S. is 10% ethanol, but a growing fleet of flexible-fuel vehicles can run on an 85%-ethanol blend, or E85. However, there are fewer pumps available to dispense it, Mr. Vilsack said.

In the U.S., only about 2,350 fueling stations out of more than 110,000 offer E85 pumps, according to the USDA.

Gloria Bergquist, vice president of the Alliance of Automobile Manufacturers, said the number of E85 vehicles in the U.S. is growing about 10% each year. In 2008, there were 6.1 million such vehicles; now, the number has increased to about 8.2 million.

New blender pumps, which Mr. Vilsack said cost about $120,000 to install, also would make it easier for drivers of conventional cars to increase the ethanol content of the gasoline they buy. He declined to estimate the total expenses, saying he didn't know how many station owners would seek the guarantees and grants.

Newer vehicles can safely run on gasoline with a 15% blend of ethanol, according to the Environmental Protection Agency.

The USDA goal, Mr. Vilsack said, is to increase the number of flexible-fuel pumps across the nation by 10,000 over the next five years, in accordance with President Barack Obama's pledge to cut U.S. dependency on foreign oil by one-third by 2025.

Industry opponents include livestock producers, who say subsidies push corn prices higher, and some taxpayer groups who say the government can't afford such subsidies.

This year, the ethanol industry is expected to consume five billion bushels of corn, almost as much as the 5.2 billion bushels that will be used for livestock feed, according to USDA data.

U.S. farmers produced 12.4 billion bushels of corn last year. The USDA already has the funds it needs to help finance the new pumps, a spokeswoman said. Congress created the Rural Energy for America Program in the 2008 farm bill to help fund renewable-fuel projects, and it can be broadened to include financing for the blender pumps.

[Ford Man]

I'm not sure of how true this is, but someone told me the other day the government was building 5 ethanol producing plants. I guess they think they will get their finger in the pie for part of the profit.

[dieselbenz]

Corporate welfare at its finest.

[theclencher]

Couldn't find the cost of a regular pump + install... seems a regular pump is about $11,000 all by itself. I don't know how much of a premium a blender pump is compared to that but I'm sure the $120,000 quote includes lots of labor and of course there needs to be another underground tank.

There's a blender pump in my town but even though I burn lots of E85 (percentage wise) I haven't used the blender pump yet. I had suspicions- perhaps totally unfounded- that the cost/gallon was higher than just getting it from the "straight" pumps? Would be easy to do the math but I haven't done it yet- have to go get prices to do so.

[pgfpro]

WOW!!!

Nice find!

I like the use of E85 for racing purposes but its not the greatest for an over all fuel. To much politics and they need to find a better fuel base other then corn. I hope the Algae plants start making some head way?

[dieselbenz]

Wont happen as long as the corn lobby owns congress.

[pgfpro]

Originally Posted by tjts1

Wont happen as long as the corn lobby owns congress.

You got that right!!!

[Fuel Miser]

Yesterday
NACS Turns to Congress for Renewable Fuels Help

ALEXANDRIA, Va. -- As more drivers rely on convenience stores to gas up, the industry as a whole would like the chance to sell more renewable fuels, but it needs Congress' help to make it more affordable and less risky.

Testifying before the House Energy and Commerce Committee's Subcommittee on Energy Power, NACS Chairman Jeff Miller noted that 80 percent of the country's motor fuels are sold at convenience stores. "We support the use of renewable fuels and are working hard to expand their use with the motoring public," said Miller, who is president of Norfolk, Va.-based Miller Oil Co. But before retailers add new fuels such as E15 they have to carefully examine concerns related to potential costs, liability concerns and customer demand.

"Choosing to sell a new fuel is very different than choosing to sell a new candy bar. As new fuels come onto the market, we want to have a reasonable expectation that we will be able to generate a return on our investment and have the option to sell them while being in compliance with all laws and regulations. But to do this, we need your assistance," he explained.

A major concern when choosing to sell a new fuel is the cost of compatibility, Miller said, adding that all related fueling equipment must be listed by Underwriters Laboratories (UL) as compatible. He explained that because UL will not re-certify any existing equipment, even equipment that is technically compatible with the new fuel, a retailer's only legal option is to replace dispensers, at a cost of roughly $20,000 per unit. In addition, underground storage equipment must also be replaced if it is not UL certified.

"Once I crack open concrete my costs could easily exceed $100,000 per location, which now gets us up to about $200,000 in pump and tank costs. So offering E15 could become very expensive," Miller said.

Furthermore, retailers need to be concerned with issues related to misfueling. Under the Environmental Protection Agency's partial waiver, only certain engines are authorized to fuel with E15. Vehicles manufactured before 2001 and all off-road use engines are not included in this partial waiver and retailers could be exposed to claims related to damage from misfueling, he explained to Congress.

"So how do I prevent the consumer from buying the wrong fuel? If I don't, I could be fined or sued under the Clean Air Act. Or, if using the wrong fuel causes engine problems, I could be sued by the consumer or word could spread that my fuel damages engines, hurting my reputation,? Miller testified.

Another liability concern relates to the potential that E15 could later be called a defective product.

Retailers also are worried that there may not be a demand for E15 since it is the first fuel transition in which no one is required to purchase the fuel. "It is also important to remember that E15 is approved by EPA for only certain vehicles and that the auto manufacturers do not support this decision. So, it is almost impossible for me to evaluate consumer demand," he added.

To help ease the cost and potential risks of embracing new fuels in the convenience store marketplace, Miller told Congress that its members should authorize an alternative method for certifying retail equipment, ensure that those retailers who comply with EPA's labeling regulations can't be held liable for self-service customers using the wrong fuel, provide regulatory and legal certainty that compliance with current laws and regulations will protect retailers from retroactive liability should law and regulations change, and support the development of vehicle and infrastructure-compatible fuels (drop-in fuels).

"If Congress takes these actions to lower the cost of entry and to remove the threat of unreasonable liability, more retailers may be willing to offer a new renewable fuel. The market will then be able to determine the fate of new fuels," Miller concluded.

http://www.csnews.com/top-story-nacs_turns_to_congress_for_renewable_fuels_help-58651.html

[theholycow]

80 percent of the country's motor fuels are sold at convenience stores

What does that mean and why does it matter?

In my region, 98% (that's a guess but I'm not trying to exaggerate) of gas pumps are accompanied by a convenience store...99.5% if you classify smaller stores selling fewer items as convenience stores. Even the very few that lack a convenience store (grocery store and warehouse store discount fuel sales, which have a huge store) sell cigarettes, wiper blades, motor oil, etc at their little booth. I haven't seen a gas pump with only a stand selling nothing else since I was a child.

Furthermore, retailers need to be concerned with issues related to misfueling.

Yes, because every day people put diesel or kerosene in their gas engine.

Retailers also are worried that there may not be a demand for E15 since it is the first fuel transition in which no one is required to purchase the fuel.

That makes sense to me. I'd try it if it's cheaper, but a lot of people wouldn't.

[Fuel Miser]

NACS Turns to Congress for Renewable Fuels Help

Quote:
80 percent of the country's motor fuels are sold at convenience stores

Originally Posted by theholycow

What does that mean and why does it matter?

"NACS" is the National Association of Convenience Stores.