Tech Tuesday

New Program to Boost Ethanol Sales

One state makes a commitment to invest in flex-fuel pumps, will others follow? You could help.

In a recent Tech Tuesday blog - Farm-to-City Connection Can Build Ethanol Demand - I noted that farmers can have a role in bringing flex-fuel pumps to the market. Those convenience stores that sell fuel use it as a "necessary product" especially when you see that most of their profits come from cigarettes and food. Your role would be to drive into one of those stores that sell gasoline - in your big flex-fuel pickup of course - and ask the owner why he/she doesn’t offer the flex fuel option.

Well, farmers in South Dakota may want to get on that bandwagon soon. Just ahead of Christmas a state legislative panel voted to establish a fund to pay fuel station owners to install those pumps.

Fuel stations can apply for grants to install pumps to dispense blends of 10% ethanol, 15% or more ethanol, and 25% or more ethanol.

In a news release announcing the program, Gov. Dennis Daugaard says: "Ethanol production is a very effective way to increase the value of our agriculture base. By making more ethanol blends available, we are improving producer opportunities, creating jobs and stabilizing domestic fuel supplies."

To be eligible for the program in that state, projects must be in South Dakota, or director toward end-users in the state. Station owners can be reimbursed up to $25,000 for the first pump and $10,000 for each pump thereafter. Station owners would have to keep the pumps for at least two years. The program will be funded with $3.5 million in grants for the next five years.

That's where you come in. First, you can encourage purchase of that pump by showing the station owner there would be demand for flex fuel - E30 is a kind of sweet spot we've discussed here in the past - and then once that pump is installed you can visit the station and be a customer. Pretty simple, however success in South Dakota could breed similar programs across the country.

USDA has been pushing flex-fuel pumps through the Renewable Energy for America Program, with an installed base of 266 pumps in 30 states. When you consider there are more than 169,000 fuel-selling convenience stores in the country, there's more work to be done.

But the South Dakota and REAP efforts are a start at showing the large role efficiently produced ethanol can play in the future.

The technology of the flex fuel pump ends that "binary" choice of E10 or E85. E10 is a baseline, often mandated in many states. E85 works great in flex-fuel vehicles, but can reduce fuel economy. A different blend - say E30 - could offer a lower cost for fuel, with no hit to fuel economy in a flex-fuel vehicle. The industry is working to create this win-win scenario.

While South Dakota is apparently leading the way, you can be part of the flex-fuel movement too. Just stop by your local convenience store for a chat with the owner.

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