WASHINGTON, May 29, 2015 -- USDA today said it will invest up to $100 million in a Biofuels Infrastructure Partnership with the goal of doubling the number of fuel pumps capable of supplying higher blends of ethanol to American consumers.

The department said it will administer competitive grants to match funding for state-led efforts to test and evaluate new approaches to market higher blends of renewable fuel, such as E15 and E85. Currently the typical gas pump can deliver fuel containing a maximum of 10 percent ethanol (E10), limiting the amount of renewable energy consumers can use to fuel their cars.

“American-made, clean energy sources support the environment, reduce our dependence on foreign oil, create jobs and sustain the economy in rural communities across the country,” Agriculture Secretary Tom Vilsack said in announcing the new partnership, adding that the U.S. is fortunate in that the country’s farmers are producing record amounts of corn, soybeans and other feedstock for the these biofuels.

"However, a combination of factors, including lower commodity prices and reduced demand for feed as the poultry industry recovers from highly pathogenic avian influenza, are creating uncertainty for America's corn and soybean producers.”

Vilsack’s earlier attempt to fund blender pumps ran into problems in Congress, and this one could, too. Congress previously barred USDA from continuing to use a farm bill program, the Rural Energy for America Program, to fund the pumps. This time, the department is planning to dip into a fund, the Commodity Credit Corp., that has traditionally been used to provide financial assistance to farmers.

“This is the latest salvo aimed at the poultry industry in the battle between food versus fuel,” said Tom Super, a spokesman for the National Chicken Council.

“Congress clearly made their will known not to fund this boondoggle when they barred funding from these programs through REAP.  Now USDA is looking for a different sock drawer from which to pull money. “

USDA recently got approval from the White House to use CCC funds to compensate poultry producers for losses from avian influenza. Poultry producers have been among the strongest opponents of government biofuel policy, which they argue increases the cost of feed.

USDA’s announcement was made just as the EPA released its long awaited proposal for volume requirements for blending of biofuels with gasoline under the Renewable Fuel Standard through 2016.

Scott Irwin, an economist at the University of Illinois, said USDA’s offer of financial assistance for blender pumps would likely have little impact because the EPA’s proposed mandates were too low to encourage refiners and service stations to increase their use of ethanol.

“Who’s going to do it (install blender pumps) when there’s no reason to do it,” he said.

USDA said the projects funded by the competitive grants will expand markets for farmers and help them diversify their rural energy portfolios, support rural economic growth and the jobs that come with it, and ultimately give consumers more affordable options at the pump.

(Updated at 4 p.m.)

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