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Trump administration investing $9.3 million in Iowa to increase American biofuel sales

The money will go towards infrastructure improvements at fuel stations to allow more customer choice at the pump

Posted: Oct 9, 2020 2:29 PM

MASON CITY, Iowa - The ethanol industry is getting a federal financial shot in the arm, which means good news for customers as they fuel up at the pump.

During visits to Trail's Travel Center in Albert Lea and Golden Grain Energy in Mason City on Thursday, United States Secretary of Agriculture Sonny Perdue is announcing that the USDA is investing over $9.3 million in grants to increase American ethanol and biodiesel sales in Iowa. The money will go towards various infrastructure projects in multiple states; in Iowa, 15 recipients like Casey's, United Farmers Cooperative, R.A.M. Inc., and Kum & Go will receive money to install dispensers and storage tanks at fueling stations, in order to give customers more access to ethanol sales.

The funds were made available through the Higher Blends Infrastructure Incentive Program, which helps transport fuel and biodiesel distribution facilities convert to higher ethanol and biodiesel blends by sharing costs related to the installation of fuel pump, related equipment and infrastructure.

Many people, including Golden Grain Energy Vice Chairman Steve Sukup, were in attendance at Thursday's announcement. He says the announcement comes at a great time while the industry continues to recover from economic uncertainty.

"It increases the stability of our farmers. The commodity markets have been tough, we had the trade war with China, our biggest trading partner sort of has been confrontational between us. Farmers really need some good news here."

Renewable Fuels Association CEO and President Geoff Cooper says the extra funding helps build off of already strong customer response to using ethanol more and more.

"Consumers have been responding very well to those products. We see E15 and E85 throughout Iowa and throughout the country priced lower than E10, 5-10 cents often. If consumers try it for the first time, you've usually made a customer for life.

"We'll begin to see the results of these grants, and the impact they're going to have on demand, probably next year when some of these facilities start opening with new pumps."

Senator Chuck Grassley was also at the announcement today, taking a tour of Golden Grain along with Secretary Perdue. 

"What the Secretary is announcing today is going to help these filling stations that maybe feel they can't quite afford a special pump for E15, they have the ability to do it." 

Secretary Perdue says the announcement is a continuation of last year's announcement to make E15 year-round.

"Many stations have hidden that E15 pump in the back. It's like putting tobacco in the cage where you had to go find it. Now, we're taking those skulls and crossbones off those pumps and putting them out there with a single blend type of pump."

After the tour, the Iowa Steering Committee of the Rural America 2020 campaign flew a plane over Golden Grain Energy with a banner that read, 'Trump Sold Out Ethanol for Big Oil', taking the President to task on what they feel are promises that have 'repeatedly fallen short.' The committee points to the President allowing a number of waivers for some production facilities to avoid ethanol blending requirements.

Pam Johnson is a sixth-generation corn and soybean farmer near Floyd, and has also been involved in the biofuel industry for the last two decades. While she supports the funding annnouncement, as it is a key piece for infrastructure improvements, she feels that the timing of it comes a bit late and more of a last minute political move ahead of the election.

"Farmers know what an important market ethanol is. Not just ethanol, but also it's good for the livestock industry, which is used for protein. We know how important that policy is, and it's the law of the land. When it is not followed, it is a big deal to any farmer. It doesn't matter what party you're affiliated with. Some of the renewable fuel supporters said, 'what makes us think that we can trust Trump under his second administration will be better on ethanol policy than he has for this first one?'"

In a release, the committee claims that the waivers helped drive down ethanol demand and resulted in promises that the President has made on ethanol and E15 being delayed or not delivered at all.

"Selling ethanol is definitely about infrastructure, but it's also about supporting the renewable fuel standard. This program of higher blends infrastructure allows for another 150 million gallons of ethanol being blended into fuel and giving customers choice at the pump. If you look at it in context, because of President Trump's ethanol policy and giving waivers to oil refiners and oil companies so they didn't have to blend ethanol in the first place, we have lost 4 billion gallons of ethanol use in the United States. That, in context, is a concern to me. Yes, thanks are deserved, but to me, it's like getting the steak sauce without the steak."

Johnson points to a few things that can be done to strengthen the ethanol industry.

"We have to have a President who says from the get go that they're going to support the renewable fuel standard, which means 15 billion gallons of ethanol use means 15 billion gallons. No back door small refinery waivers to gut the RFS, almost like in secret. It's so important for not just us as farmers for market, it's important to those gas stations that put in the infrastructure. It's important to the car manufacturers who are making new engines. And it's important to the consumer so they can have better, cheaper, healthier blends of fuel at the pump."

Ahead of the announcement, the Iowa Democratic Party released a statement calling the announcement 'damage control.' Secretary Perdue says these sort of announcements take time. 

"This has been in the taps for over a year. It takes awhile in the federal government to get things out. We announced this, as Senator Grassley said, several months ago. There are no tricks about that, it takes awhile to get that done and this is the timing for it to come to fruition." 

About another $100 million HBIP investments are expected to be announced in the coming weeks.

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