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USDA Increases Ethanol Support

Speaking to the ethanol lobbying group, Growth Energy, Agriculture Secretary of Agriculture Tom Vilsack Thursday announced more USDA support for bioenergy research and farmer production of biomass but also praised efforts by the biofuel industry itself to find ways around barriers to sales in gasoline retailing.

Vilsack announced the availability of up to $8.7 million in funding for bioenergy research and education efforts as well as publishing the final rule for a program that provides incentives for farmers and forest landowners interested in growing and harvesting biomass for renewable energy.

Both programs were authorized by the energy title of the 2014 Farm Bill. But Vilsack also promised to do more. His department will soon release a study that rebuts the food vs. fuel arguments of opponents in Congress who want to repeal or weaken the Renewable Fuel Standard.

“Leave here knowing that at the Department of Agriculture you’ve got a friend,” said Vilsack, who spoke at Growth Energy’s executive leadership conference near Phoenix.

Vilsack also made a pitch for Trade Promotion Authority (TPA) for the president, legislation that would speed the debate over pending trade agreements in Congress.  The first agreement that could come up for a vote is the Trans-Pacific Partnership (TPP), but Vilsack pointed out that another trade agreement, the Transatlantic Trade and Investment Partnership (TTIP) is crucial for the biofuels industry. Because the European Union has thrown up barriers to both U.S. ethanol and biodiesel exports, TTIP has the potential to improve U.S. biofuel exports.

And that’s why Growth supports TPA, the group’s CEO, Tom Buis, said later at a press conference with Vilsack and Jeff Broin, executive chairman of ethanol company POET and co-chair of the Growth Energy Board.

“Of course we’re interested in free trade,” Buis said.

Vilsack also praised the ethanol industry in his speech and at the press conference for its own efforts to get around the so-called blend wall by investing in infrastructure to sell E15 and other higher level blends of ethanol.

The program, started by POET and ADM, has been joined by the National Corn Growers Association (NCGA) and is now called Prime the Pump.

“It’s going very well. It’s our industry effort,” Broin told Agriculture.com at the press conference. “To date, we’ve raised tens of millions of dollars.”

Vilsack praised that effort, too.

“This is why you want this industry to survive and thrive – because it’s entrepreneurial and innovative,” Vilsack said.

The Farm Bill has some support for plastics and other products made from crops and biomass as well as biofuels. Vilsack sees the ethanol industry’s efforts to get around marketing barriers from the oil industry as a model for the future bioproducts industry.

“This is what the bioproducts industry is going to confront – the same thing when they take on the chemical companies,” Vilsack told Agriculture.com

Earlier this week at the Commodity Classic in Phoenix, members of the Corn Growers were briefed on Prime the Pump by Paul Bertels, NCGA’s vice president of production and utilization.

Prime the Pump started when ADM and POET looked for retail chains willing to offer E15 for five years. In return, the companies helped put in blender pumps that can dispense the fuel. So far, Prime the Pump has agreements with six chains, Bertels said. One of the most promising is an agreement with Sheetz, a chain with retail stations in six states in the Midwest, Mid-Atlantic, and Southeast. By the second quarter of 2016, Sheetz will be offering E15 in all 60 of its North Carolina locations, Bertels said.

Earlier this year, Growth Energy said that retailers selling E15 say that the fuel offers consumers a $0.05- to $0.10-per-gallon advantage compared to regular gas. 

Bertels told Agriculture.com that if the retailing test by Sheetz in North Carolina goes well, it might be offered in the chain’s other 200 stores.

Prime the Pump likely won’t have funds to buy blender pumps everywhere. But it may give an opening for the fuel, which retailers owned by oil companies have resisted.

“The hope is that competition alone will force other guys in the location to offer it,” said Bertels.

E15 still faces strong headwinds, including oil industry propaganda that it can damage automobile engines. E15 (gasoline blended with 15% ethanol) was tested by the Department of Energy and has been approved by EPA for use in cars made for the 2001 model year and newer. Ethanol supporters say that the reason EPA didn’t extend approval for even older cars is that the Energy Department didn’t have enough older vehicles for its test.

In some locations the fuel can’t be sold in summer, however, except for use in flex-fuel vehicles, because it’s considered to have higher vapor pressure, which might contribute to smog. E10 likely has higher pressure, but E10 has a waiver from rules on vapor pressure. NCGA lobbyist Jon Doggett told Corn Growers at the briefing that his group believes EPA has the legal authority to grant a waiver to E15. So far, EPA has said Congress has to pass legislation to give E15 the same vapor pressure waiver. 

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