Blender Pump Deployment Could See Uptick Thanks to USDA Funds

On September 10, the U.S. Department of Agriculture (USDA) announced $100 million in awards through the Biofuels Infrastructure Partnership (BIP). The money will help states install biofuels infrastructure, such as blender pumps, at retail gas stations in 21 states.  Typical gas pumps are only compatible with biofuel blends up to 10 percent (E10).  To meet the volumes of renewable fuels as outlined in the Renewable Fuel Standard (RFS), infrastructure investments are needed to allow for the sale of higher ethanol blends (E15 and up).

According to USDA, grant requests totaling over $130 million were received, signaling significant interest from across the country to increase the availability of various biofuels blends at the retail level.  The $100 million is being matched with private and state funds, and is expected to install a total of 5,000 blender pumps at approximately 1,400 fueling stations nationwide.  

Recently, automotive manufacturers, the ethanol industry, and the retail fuels market has expressed interest in mid-level blends (E15 to E30).  Because E85 makes up less than 1 percent of the retail fuel in the United States, increasing the standard blend from E10 to E15 would increase the volume of biofuels in the fuel supply by 50 percent, obliterating the so-called ‘blend wall’.  The majority of new make and model year cars are compatible with E15, and the fuel has been certified for use in make and model year 2001 and newer by both the EPA and the Department of Energy.

Additionally, mid-level blends, such as E25, are being explored by automotive manufacturers as a high octane fuel that is compatible with smaller, more efficient engines. If available in the retail fuels pool, mid-level blends could be one possible tool available to the industry to meet increasingly stringent miles per gallon ratings, or Corporate Average Fleet Economy (CAFE). But for manufacturers to produce the cars that are compatible with this fuel – the fuel has to be commercially available. Thus, the needed infrastructure investments.

With the majority of gas station owners and operators tied to fuel contracts with “The Big Five” (Shell, BP, Chevron, ExxonMobil, and ConocoPhillips), retailers have been disincentivized in offering mid-blends to consumers. While the $100 million and matching funds may be a drop in the bucket, it is USDA’s hope that this increased access will increase demand for renewable fuel. USDA estimates that the investments will double the number of blender pumps in the United States.

For more information see: 

USDA Announces State Finalists for the Biofuel Infrastructure Partnership, USDA