E85 funding spreads nationwide

By Luke Geiver | April 15, 2010
The availability of funding for ethanol infrastructure is aiding the growth of ethanol-compatible blender facilities across the U.S. But, while most states and development groups accept anything they can get, some have chosen to decline the funding.

In February, the Southern California Association of Governments turned down an $11 million federal grant for ethanol fueling station expansion. The decision by SCAG came before the final rule for the renewable fuels standard was announced in mid-February. Noting the difficulties in understanding the benefits of ethanol blending terminals in California, Debbie Cook, a former SCAG committee member, spoke out in opposition to accepting the funding. "You have to consider carbon emissions in your land use, you have to consider everything," Cook said. "That is something that has not been done by the boosters of ethanol."

The funding, which was intended for 55 new ethanol fuel stations, was sponsored by the U.S. DOE. Paul Wuebben, clean fuels officer for the South Coast Air Quality Management District, spoke in favor of the funding. "[Ethanol's] wider use would reduce dependence on gasoline and remove pollutants from the air," Wuebben said. Another member of the AQMP, assistant deputy executive officer Henry Hogo, said the group did consider everything in its research, adding, "Ethanol in terms of E85, we feel, has benefits to Southern California and the environment."

In the end, the decision to refuse the grant was made by the community members making up the SCAG committee. After questioning the possibility of cellulosic ethanol, Cook added, "We make amazing assumptions about areas we are really not well informed on. We understand things a mile wide and an inch deep. We can't possibly know the critical questions that need to be asked."

Less than a week after the SCAG decision, Propel Fuels announced it has raised $20 million in equity funding for E85 infrastructure expansion, while DMC Green Inc. announced it has received two DOE grants to do the same. Matt Horton, CEO of Propel Fuels, called SCAG's decision to decline the funding for fueling station expansions disappointing. Through the equity funding, Propel plans on adding to five existing E85 stations while hiring 35 people at its headquarters in Sacramento. "Our success in Sacramento has shown us that despite what some government officials believe, consumers and fleets do want this fuel now."

In agreement with Horton, F. Kent Leacock, director of corporate and regulatory affairs for DMC Green, also said the SCAG decision was disappointing. DMC Green had also applied for funding from the rejected grant, and Leacock spoke about the SCAG decision, noting that infrastructure construction for corn-based ethanol will be a proactive step to benefit cellulosic ethanol in the future. "There will be no way to sell the fuels if you don't build the infrastructure," Leacock said.

Like Propel Fuels and DMC Green, an ethanol development group based in Florida had no reservations about accepting DOE funds for ethanol fuel station expansion. Protec Fuels will put in 30 new fueling stations across Florida, Georgia and Alabama. In a partnership with Urbieta Oil, Renewable Fuels Association, U.S. Clean Cities Coalitions and General Motors, the goal for Protec is to place the stations into the highest use areas. "Just because there are a lot of flex-fuel vehicles in one area, doesn't mean we will put a blending facility there," said Todd Garner, managing partner for Protec. Starting with the number of flex-fuel vehicles located in the vicinity of each proposed site, Garner said information regarding the presence of corporate fleets, military vehicles and the distance between those vehicles and the proposed site also help determine where to construct a station. Because of the research performed before applying for grant money, Garner believes Protec can be more successful in receiving the funding and better situated to help a fueling station succeed. "Our success rates at our stations average more gallons of E85 than any other stations in the nation," said Garner.

In South Dakota, motorists will have more choice at the pump as well. After Gov. Mike Rounds signed House Bill 1192 into law, South Dakota will use $1 million in federal funds for the installation of ethanol blender pumps. "We support maximum consumer choice at the pump," said Brian Jennings, executive vice president of the American Coalition for Ethanol, "and this legislation will make it easier for South Dakota fuel marketers to add more renewable fuel choices for their customers."