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Location: Douglas, Coffee Co., The Other Georgia, United States

Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Saturday, April 09, 2011

USDA to fund new E85 blender pumps at cost of $120,000 to install. Guess what? Ethanol lobbying group says it strongly endorses the plan.

From the Wall Street Journal:

The Department of Agriculture will soon be helping gasoline stations install new pumps that can dispense fuel with higher ethanol content, USDA Secretary Tom Vilsack said.

The USDA will soon offer grants and loan guarantees for the installation of costly new "blender pumps" so drivers can purchase fuel with a higher ratio of corn-based ethanol.

Most gasoline sold in the U.S. is 10% ethanol, but a growing fleet of flexible-fuel vehicles can run on an 85%-ethanol blend, or E85. However, there are fewer pumps available to dispense it, Mr. Vilsack said.

New blender pumps, which Mr. Vilsack said cost about $120,000 to install, also would make it easier for drivers of conventional cars to increase the ethanol content of the gasoline they buy. He declined to estimate the total expenses, saying he didn't know how many station owners would seek the guarantees and grants.

Industry opponents include livestock producers, who say subsidies push corn prices higher, and some taxpayer groups who say the government can't afford such subsidies.

This year, the ethanol industry is expected to consume five billion bushels of corn, almost as much as the 5.2 billion bushels that will be used for livestock feed, according to USDA data

Mr. Vilsack announced the plan at a time when concerns about strong demand for corn, the primary ingredient in ethanol made in the U.S., have pushed prices of the grain to record highs. Corn futures have more than doubled since last summer on strong foreign and domestic demand, including record U.S. ethanol output. The USDA, in a crop report issued Friday, said producers of the biofuel would be consuming even more corn than expected this year. Corn futures on Friday closed up 1.2% at $7.68 a bushel, near the all-time high of about $7.73 a bushel set Thursday.

Congress also provides hefty support for the ethanol industry with a 45-cent-a-gallon subsidy that is paid to gasoline blenders that include ethanol in fuel.

The Renewable Fuels Association, an ethanol lobbying group, said it strongly endorsed USDA's new plan.


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