USDA and States to Spend $210 Million on Fuel Pumps

On May 29th, the United States Department of Agriculture (USDA) announced $100 million in grants offered through their Biofuel Infrastructure Partnership (BIP) program. According to Secretary of Agriculture Tom Vilsack, the move is to make renewable fuel options more available to American consumers. The program is a 1:1 partnership with states to build fueling stations and purchase blender pumps for E15 and higher. The preliminary spending tally estimates $210 million for 5,000 pumps at 1,400 fueling stations in 21 states.

This latest money toss is yet another multi-million dollar outlay resulting from the Renewable Fuel Standard (RFS), as mandated by the 2007 Energy Independence and Security Act (EISA). The mandate requires gasoline to be blended with renewable fuel sources at incremental increasing levels.

The original RFS mandated level was 10% ethanol or E-10. The next mandated level, 15% ethanol or E-15, is a blend level the EPA labels to be used only in Flex-fuel passenger vehicles, model years 2001 and newer. The label goes on to state, “Do not use in other vehicles, boats, or gasoline-powered equipment. It may cause damage and is prohibited by Federal law”. Still, the EPA wants to make even higher blend levels available, even if that means taxpayers are to fund the necessary infrastructure.

Unlike the traditional pumps where a consumer makes the fuel choice of diesel, unleaded, or octane levels, the government has decided to fund blender pumps offering a choice between ethanol or even more ethanol. Even though the overwhelming preference of consumers, environmentalist, economists, most ag sectors and automakers is E-0, an option not found on the new pumps.

Though extensive studies with science-based evidence prove the damage ethanol contributes to the environment and engines, along with the real damage to a market-based economy, federal agencies continue to dig deeper into the ethanol quagmire. Even the Government Accountability Office (GAO) found the RFS costs outweighed its benefits and criticized the EPA’s economic analysis of the RFS as intentionally misleading. In a 2014 report to Congress, the GAO exposed the agency’s false reporting of the program’s costs stating, “EPA estimated net benefits of the mandated volumes ranging from $13 to $26 billion.” However, the EPA did not include the infrastructure costs (such as this latest $100 million) in their calculations. An expense the EPA estimates to total an astounding $90.5 billion.

 

Comments (5)

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  1. Francisco Machado says:

    Given that the justification for the renewable fuel standard was to forestall the depletion of our petroleum resources and ameliorate the effect of a tight petroleum market, neither of which are a problem today and given that alcohol is more expensive, less efficient, destructive of motors, more polluting than gasoline, and – since corn is soil depleting, requires more fertilizer when fertilizer runoff is considered by the EPA to be a pollutant – I think it would be reasonable to include in an article on it why the EPA favors not only continuing it but even increasing the amount. Incidentally, what action is being taken against the agency for the river pollution in Colorado? That seems to have dropped from the news.

  2. Belinda Silva says:

    Hello Francisco,

    Thank you for your comments. Your assertions are accurate. The two principal original arguments for taxpayer-funded ethanol research, development, and marketing where to achieve energy independence and produce an environmentally friendlier fuel. We now know the ethanol industry has not achieved the promised return on investment.

    However, the Renewable Fuel Standard (RFS), and the requirement to increase blend, is a legal mandate. The RFS is Title II, Subtitles A thru D of the 2007 Energy Independence and Security Act (EISA). Because of that, it will take legislative action to eliminate or amend the program.

    In regards to the Gold King Mine spill, on August 24th, the EPA released findings from their internal investigation. That report states the spill was “inevitable” and credits the site team with acting to prevent fatalities. However, on October 22nd, the U.S. Department of Interior (DOI), Bureau of Reclamation released an independent assessment titled, Technical Evaluation of the Gold King Mine Incident.

    The DOI report is peer reviewed by the U.S. Geological Survey and the U.S. Army Corp of Engineers, and it finds the EPA is at fault. The report states, “[T]he actual cause of failure is some combination of issues related to EPA internal communications, administrative authorities, and/or a break in the decision path…”. Where the EPA calls the spill “inevitable” the DOI report calls it “preventable”.

    It will be interesting to see what happens next.

  3. Mike Neary says:

    This is not limited to cars. This past winter, the oil furnace that heats my parent’s home needed considerable work. Part of that was due to biofuels in home heating oil.

    • Belinda Silva says:

      Hello Mike,

      Thank you for sharing that. It becomes a job in itself tracking the impact of poorly considered policy. It seems more attention gets paid to the wrappings and trappings of government programs than to the actual “gift” inside. In this case, the Ethanol policy is the gift that just keeps on giving. Not good for our economy or individual’s like your parents.

      Thank you again.

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