Monday, April 11, 2011

Feds to offer rural gas stations aid for E85 pumps

The Obama administration is offering grants and loan guarantees to rural gas stations for installing pumps for E85 pumps, the fuel that is 85 percent ethanol. The U.S. Department of Agriculture will offer grants and loan guarantees to cover up to 75 percent of the cost of installing equipment needed to dispense E85, Philip Brasher of the Des Moines Register reports. The hope is to place ethanol pumps in 10,000 stations within five years.

"About 2,300 stations nationwide are now equipped to sell E85," Brasher writes. "About 8 million cars and trucks on the road are equipped to use E85." Agriculture Secretary Tom Vilsack said in a news release,  "Many folks who own these vehicles may have a difficult time accessing the necessary fuel." Retrofitting a station to supply E85 costs around $120,000, and many stations will see that as too much even with the federal aid, John Eichberger, vice president of government relations for the National Association of Convenience Stores, told Brasher.

"The government is offering you a $25,000 grant. Most stations only made $30,000 to $40,000 in pre-tax profit last year," Eichberger told Brasher. "You're looking at a pretty hefty investment." He says a better solution would be for Congress to certify existing equipment as able to supply E85 and other blends of ethanol and gasoline. USDA has restricted the aid to stations in communities with fewer than 50,000 people, one definition of rural. (Read more)

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