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Farm bill removes subsidies for biofuel blender pumps

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Jan 29 (Reuters) - Lobbyists opposed to mixing more ethanol in gasoline scored another victory on Wednesday after the U.S. House of Representatives passed a farm bill with a provision removing subsidies for biofuel blending pumps in rural areas.

 

The provision, tucked into page 735 of the 949-page farm bill, could make it more difficult for gasoline blended with higher concentrations of ethanol to find its way to rural areas, where demand for the fuel is greatest.

 

That, in turn, could make it more difficult for the United States to implement a program known as the renewable fuel standard, or RFS, which mandates increasing amounts of biofuels like corn-based ethanol be blended into the nation's fuel supply.

 

The subsidy cut is also a blow to the Obama administration, which in 2010 set a goal of helping gasoline station owners install 10,000 blender pumps over the next five years to promote consumption of higher-ethanol gasoline. Blender pumps mix gasoline and ethanol for sale at gas stations.

 

"We figure there will be a lot fewer blender pumps if it's not subsidized by the federal government," said Wayne Allard, vice president of government relations for the American Motorcyclist Association, which lobbied for the provision.

 

Allard said his group wanted to limit the chance that motorcycle owners will damage their engines by buying gasoline blended with higher amounts of ethanol than the 10 percent norm.

 

The lobbying victory follows a November move by the U.S. Environmental Protection Agency to reduce for the first time the amount of ethanol required to be blended into U.S. gasoline supplies. The EPA proposed the cuts in part due to concerns over the lack of infrastructure, such as blender pumps needed to sell gasoline with greater concentrations of ethanol.

 

"There is irony in the fact that EPA has proposed cutting back on the RFS because of their concern about the availability of infrastructure to satisfy higher blends of ethanol while the Congress eliminates funding for blender pumps," said Bob Dinneen, head of the Renewable Fuels Association, which represents ethanol producers.

 

"The U.S. ethanol industry remains committed to growing demand and opening new markets, which will require expanded infrastructure," he said.

 

Gasoline blended with higher concentrations of ethanol, such as 15 percent, or E15, has been most popular in rural areas, which are targeted by the subsidy removal.

 

There are only 59 stations across 12 states that currently sell E15, according to a list published by the RFA. Most of them are in corn-producing states such as Iowa, Kansas and Illinois. Although growing, that total is still miniscule compared with the 120,000 to 125,000 U.S. gasoline stations, according estimates by the American Automobile Association.

 

Wednesday's vote does not guarantee the subsidy cut will become law, but there is little opponents of the provision can do to stop it. The Senate is expected to vote on the same version of the bill as early as next week, at which point it will go to President Obama for signing into law.

 

Leaders of the House and Senate agriculture committees have said they expect the resident will sign the bill .

 

(Reporting by Cezary Podkul in New York; Editing by Dan Grebler)


 

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President Obama ....Line Item Veto?

He can't, it's not available to the President........Not even sure if all Governors have it available to them.............wonder if the Signing Statements like Dubya used would work here though.

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He can't, it's not available to the President........Not even sure if all Governors have it available to them.............wonder if the Signing Statements like Dubya used would work here though.

 

Congress attempted to grant this power to the president by the Line Item Veto Act of 1996 to control "pork barrel spending", but in 1998 the US Supreme Court ruled the act to be unconstitutional in a 6-3 decision in Clinton v. City of New York.

 

 

 

So with Line Item Veto out of the question ..then yeah the "REAP" Blender Program will end. Not sure how big of a loss it will be ...we have had what maybe 200 Blenders added via that program ..but still that will hurt

 

 

I have over the past year decided that for the money straight E85 pump makes more sense anyways and is far less expensive ..but yeah I like Blenders simply for the fact that that is where I want to see E15 at (instead of as a base fuel.)

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I would like to see the ethanol lobby groups (Growth Energy, American Coalition on Ethanol...) step up and put their own money where their lobbying mouths are. 

 

One thing that turns people off about ethanol is that they have the impression that it only exists because of government mandates and subsidies...  I know the blenders credit has expired years ago, but this is the perception of "JQ (lord help them) Public".  I've heard multiple complaints to the effect that "if this fuel is SO good, why do they need Uncle Sam to dole out grants to bait people into selling it?"...  What they see is that they (ethanol industry) want others to pay to build the infrastructure they need (blender pumps)...  I once heard the argument that "if this fuel is so great, and is such a good deal, why doesn't the ethanol industry give these grants to build the pumps?"

 

They sort of have a point.  By the ethanol industry's relying on Uncle Sugar Sam's grants to build infrastructure it gives the impression that these pumps are not valid legitimate investments...  worthy of wasting "other people's money"... but not their own profits.

 

How about THIS proposal... of the top of my head, just brainstorming.

 

Here in the Midwest, the concept of producer check offs have been SO fabulously successful at expanding markets.  Heck, where would the ethanol industry be were it not for the early investment of corn check off dollars?  I would like to see states start an "ethanol check off"...  Say a flat 1/2 cent per gallon produced.  A standard 50mgy plant, would contribute $25k.  A larger 100mgy plant $50k.  State of Nebraska with 2bgy (billion gallons per year), would contribute $10 million.  Iowa's 3.7 bgy...  $18.5 million a year...  Maybe this could be done nationwide.

 

I'd like to see 1/2 of the money be used locally, with 1/2 of all money used to build infrastructure (pumps) in the same state that the ethanol was produced.  Other 1/2 used to fund the building infrastructure outside the ethanol belt...  focus on building pumps in high FFV density areas, with people who can buy ethanol at good prices to offer good spreads...  maybe use some of this money for advertising campaigns in these regions...

 

Anyways, this is my raw proposal...  ethanol investing their own money, for developing their own markets, for their own future.  Such a system would go a long way towards earning the trust of JQ Public who perceive ethanol as being a product of government mandates/subsidies... wanting the government to invest their money to build future ethanol profits on.

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Little Sioux Corn Processors will give $15,000 towards blenders and there still aren't many takers.

Morning cessna .. Wouldn't it make more sense for Little Sioux to simply Pay for the install in exchange for a contract to sell Ethanol through that pump..  goes back to ethanol setting up their own infrastructure just like Oil has done

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