Ethanol Pipeline Bill Reintroduced

Bill streamlined to help it more easily pass through committee and reach consideration on the House floor.

The ethanol industry has boomed and busted. But for ethanol to go to the next level, an effective means of shipping it where it is produced to where it's needed most needs to occur.

And Rep. Leonard Boswell, (D-Iowa), hopes to help on that front.

Boswell reintroduced legislation Feb. 25 to provide loan guarantees for a dedicated renewable fuel pipeline from the Midwest to the rest of the country. Ethanol companies have said amendments to DOE’s loan guarantee program are needed to include large-scale renewable fuel pipeline projects.

H.R. 4674 amends the loan guarantee program under the Energy Policy Act of 2005 to specifically qualify a renewable fuel pipeline as an eligible project, along with increasing the loan guarantee rate to 80%. Iowa Reps. Tom Latham and Dave Loebsack are original co-sponsors of H.R. 4674.

The reintroduced legislation has been streamlined to help it more easily pass through committee and reach consideration on the House floor.

Boswell estimates construction of a pipeline would create 80,000 jobs and contribute $6.6 billion to the U.S. economy.

Two companies, POET and Magellan, have already expressed interest and completed a feasibility study on a dedicated renewable fuel pipeline that would run from Middle America to the East Coast. In addition to the previous job creation and economic growth numbers, the study reported that the pipeline would also add $3.7 billion in household income, $700 million in federal tax revenues, and $600 million in state & local tax revenues.

"Pipelines are the most cost efficient, safest and most reliable mode of transportation for liquid energy," Magellan COO Mike Mears said.

When complete and operational, this pipeline will have the capacity to ship 240,000 barrels of ethanol a day. This amounts to more than 3.6 billion gallons of ethanol or about one-fourth of the ethanol required to be used in the U.S. by the Renewable Fuel Standard provision of the Energy Independence and Security Act of 2007 (EISA) in 2015.

POET has a network of 35 plants in eight states producing more than 1.8 billion gallons of ethanol annually and many of its plants are on the pipeline route.

Magellan and POET will invest more than $4 billion to develop and construct this ethanol pipeline between 2010 and 2014 when the pipeline is scheduled to become operational.

A statement from Growth Energy said an "ethanol pipeline - built privately with federal loan guarantees - will help assure that U.S. consumers will have choices at the pump that include domestic, renewable ethanol."

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