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USDA to Invest Up to $100 Million to Boost Infrastructure for Renewable Fuel Use

The USDA is Seeking to Double Number of Higher Blend Renewable Fuel Pumps

WASHINGTON, May 29, 2015 – Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture (USDA) will invest up to $100 million in a Biofuels Infrastructure Partnership to support the infrastructure needed to make more renewable fuel options available to American consumers. Specifically, USDA will administer competitive grants to match funding for state-led efforts to test and evaluate innovative and comprehensive approaches to market higher blends of renewable fuel, such as E15 and E85. States that are able to provide greater than a one-to-one ratio in funding will receive higher consideration.

“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. We are fortunate that our farmers are producing record amounts of feedstock for these fuels,” Vilsack said. “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. With this partnership, USDA is helping to ensure the infrastructure is in place for consumers to access more renewable fuels, expand marketing opportunities for farmers, and grow America’s rural economies.”

Higher blends of renewable fuel offer significant potential for increasing the use of renewable fuels in the U.S. gasoline pool, but currently, the typical gas pump can deliver fuel containing a maximum of 10 percent ethanol, limiting the amount of renewable energy consumers can use to fuel their cars. This new USDA partnership will help support the installation of fuel pumps capable of supplying higher blends of renewable fuel by partnering with states to fund innovative, public-private partnerships to test more comprehensive approaches to marketing such blends. This new investment seeks to double the number of fuel pumps capable of supplying higher blends of renewable fuel to consumers, such as E15 and E85.

The United States exported more than $2 billion dollars of ethanol last year, making the United States the world’s largest exporter of ethanol. Additionally, the United States has become a market leader in the export of high-quality distiller’s dried grains (DDG), a byproduct of ethanol production used as a high-protein feed for livestock and poultry. Other countries are investing in clean energy technologies because they realize the tremendous economic potential of these energy sources, and the United States must do the same to remain competitive. The projects funded by these 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.

Today’s announcement marks USDA’s latest effort to increase renewable fuel use in the United States. To formally launch this infrastructure partnership, USDA will post a Notice of Solicitation of Applications in June.

Secretary Vilsack has recognized the biobased economy as one of the four pillars of rural economic growth, in addition to production agriculture, local and regional food systems, and conservation and natural resources. Biofuels lower greenhouse gas emissions, reduce dependence on foreign oil, give businesses and consumers more energy options and create well-paying American jobs.

USDA has also helped jumpstart efforts to provide a reliable supply of advanced plant materials for biofuels. Through its Biomass Crop Assistance Program (BCAP), for example, USDA is incentivizing more than 850 growers and landowners farming nearly 48,000 acres to establish and produce dedicated, non-food energy crops for delivery to energy conversion facilities.

To ensure those feedstocks are put to use, USDA has invested in the work needed to create advanced biofuels refineries. USDA has supported efforts to build six new biorefineries to produce advanced biofuels in Louisiana, Georgia, Oregon, Nevada, North Carolina, and Iowa, in addition to two existing facilities in New Mexico and Florida previously supported by the program.

USDA has also worked with agencies to strengthen markets for biobased products. Approximately 2,000 products now carry USDA’s BioPreferred label, and approximately 150 applications for the BioPreferred label are in process. Companies in over 40 countries on six continents are now participating in USDA’s BioPreferred program.

USDA has partnered with the U.S. Navy and Department of Energy to accelerate the development of domestic, competitively-priced “drop-in” diesel and jet fuel substitutes. Awards under the Defense Production Act were announced in 2014 for three companies (Fulcrum Sierra Biofuels, LLC; Emerald Biofuels, LLC; and Red Rock Biofuels, LLC) to scale up production capacity to supply the U.S. Navy with over 100 million gallons per year of advanced drop-in biofuel beginning in 2016 and 2017 at a price competitive with their petroleum counterparts.

USDA has invested $332 million over the past six years to accelerate research on renewable energy ranging from genomic research on bioenergy feedstock crops, to development of biofuel conversion processes and costs/benefit estimates of renewable energy production.

President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, investments in housing, community facilities, businesses, infrastructure and renewable energy have empowered rural America to continue leading the way—strengthening America’s economy, small towns and rural communities. To create jobs in rural communities, drive economic growth, and help reduce our dependence on foreign oil, USDA will continue to aggressively pursue investments in renewable energy.

Updated Grant List from the Legislative Session

We are working with a few other agencies to get together a comprehensive list of grants available as a result from the 84th legislative session. Please download the excel document for detailed information about current and closed grants.

June 2015 Grants

Vote on Diesel Gallon Equivalent (DGE) Standard Scheduled for July

Call to Action!

In July, the National Conference on Weights and Measures (NCWM) will vote on the diesel gallon equivalent (DGE) standard.  The vote will take place at the NCWM Annual Meeting July 19 – 23 in Philadelphia, Pennsylvania.  It is critical that natural gas advocates reach out to their state regulators in the next month in order to encourage them to support this important vote. 

Our member NGVAmerica will attend the meeting to speak in support of the DGE proposal.  However, state regulators need to hear from businesses in their affected states.  NGVAmerica is asking members, trade allies, and other affected businesses to consider:

  1. Attending the NCWM Meeting and testify during the open session; this involves speaking from the floor during the open session; remarks are often given informally and do not have to be technical or detailed;
  2. Contacting state NCWM officials and urge them to vote for the DGE proposal;
  3. Writing a letter to your state representative urging them to support the DGE proposal and copy the NCWM Executive and others (we have prepared a sample draft letter);
  4. Contact elected officials in states where you operate and urge them to contact the states voting representative;
  5. Let us know if you state regulators have indicated how they plan to vote; and
  6. Let us know if you will be at the meeting in Philadelphia.

This standard compliments the gasoline gallon equivalent (GGE) standard that has been in place for more than 20 years.  Under the proposal, retailers of CNG and LNG will be able to offer these fuels in diesel gallon equivalent units.  CNG retailers would have the option of using GGE or DGE units but LNG would only be sold in DGE units.

 

Below are links to more information on state representatives and details on the upcoming Annual Meeting.  If your state is represented on the L&R or S&T Committees, it would be helpful to also write those officials.

 

Link to State Directors: http://www.ncwm.net/resource/state-directors-all

Link to NCWM L&R Committee Members:  http://www.ncwm.net/committees/laws-regulations

Link to NCWM S&T Committee Members:  http://www.ncwm.net/committees/specs-tolerances

Link to NCWM Annual Meeting Details (July 19 -23, Philadelphia, PA):  https://www.ncwm.net/meetings/annual/publication-16

 

As of this May 2015, ten states now officially recognize the DGE standard as the legal method of sale for natural gas.  The latest state to do so was New Mexico, which on May 14 issued final regulations recognizing DGE for CNG and LNG.  Twenty-five states also use the DGE unit for taxation of LNG.

About the Establishment of a Standard for Dispensing CNG and LNG in DGE Units

Establishing a standard for dispensing CNG and LNG in diesel gallon equivalent (DGE) units is important for the continued use of natural gas in trucking and other applications that traditionally use diesel fuel. The natural gas industry has requested that the National Conference on Weights and Measures (NCWM) adopt a DGE unit for CNG and LNG that is sold to truckers and other users who typically use diesel fuel. From the purchaser’s perspective, the pump display and readings would show the number of DGE units dispensed and information would be provided on the pump to show how natural gas is converted to DGE units. This is the only rational way to offer CNG and LNG when sold to truck operators. Under the proposal, LNG would only be sold in DGE units since LNG is expected to be used exclusively as a heavy duty vehicle fuel. CNG would be dispensed in GGE units at retail outlets serving the general public and would be sold in DGE units on pumps selling to trucks and heavy duty vehicles.

Standards adopted by NCWM in 1994 require CNG to be sold in gasoline gallon equivalents (GGE). That standard has benefited consumers and industry alike because it provides a common unit for comparing the average energy in CNG to the average energy in a gasoline gallon. It also provides a ready means of informing consumers as to the relative economic cost of natural gas compared to gasoline. All of the retail pumps used today in the U.S. use the GGE unit for dispensing CNG and all retail stations price CNG in GGE units. Moreover, many states increasingly are using the GGE as the most appropriate unit for taxing CNG.

The need for this action is driven by the fact that there currently is significant national interest in promoting increased use of natural gas in heavy duty vehicles where diesel fuel has traditionally been used. The federal government and many state governments currently have in place policies intended to expand the use of natural gas as a transportation fuel. Private firms are investing hundreds of millions of dollars establishing a national network of retail fueling stations to supply this fuel to motor vehicles. Development of a weights and measures standard for a DGE of natural gas will complement the effort made 20 years ago to create the GGE standard.

Texas NGV Industry Shines at ACT Expo 2015

From the Texas Railroad Commission

On May 5, Commissioner David Porter gave the opening remarks at the ACT Expo in Dallas, Texas.  More than 3,500 attendees and over 200 exhibitors convened at the Kay Bailey Hutchison Convention Center in Dallas for the industry’s largest annual alternative fuel conference and expo.  Commissioner Porter gave an update on his Texas Natural Gas Initiative.  Commissioner Porter noted, “We’ve made some major progress in Texas since 2013.  Natural gas motor-fuel sales, the number of natural gas vehicles, and the number of natural gas fueling stations are surging in our state. The Texas Comptroller of Public Accounts reports natural-gas motor-fuel tax collections doubled in the first six months of fiscal 2015 compared to fiscal 2014, jumping from $1.1 million to $2.2 million.  At $0.15/gallon equivalent, these receipts represent sales 14.6 million gallon equivalents of CNG and LNG, compared to 7.3 million previously.”  He continued, “The number of natural gas vehicles has more than doubled in the past two years, to more than 7,900 vehicles.  The number of stations has kept pace, doubling from 69 to 136 in the same period.  New figures from the Railroad Commission show that investment in natural gas vehicles and fueling stations in Texas totaled $260 million in the past two years, with a 12:1 match of private to public investment.”

 

Check out the Clean Cities Webinar Archives.

Clean Cities University offers monthly webinars for coordinators and stakeholders with up-to-date information about industry topics and training on Web-based tools. They keep all of the previous webinars in their archives section, where you can watch them.

They offer information on many different subjects!

Go here to watch a few.

All U.S. States Show Promise for Alternative Fuel Deployment

When it comes to the world of alternative fuel deployment, it’s a common mantra that no single technology will be the “silver bullet” for reducing the consumption of conventional fuels like diesel and gasoline. Instead, a combination of all viable fuels and vehicle technologies is necessary to improve the nation’s energy security and reduce environmental impacts.

A new report released by the National Renewable Energy Laboratory, the Geography of Existing and Potential Alternative Fuel Markets in the United States, examines the potential to successfully deploy the five most commonly used alternative fuels: electricity (used by plug-in electric vehicles), biodiesel (blends of B20 and higher), E85 ethanol, compressed natural gas (CNG), and propane.

To evaluate existing and potential regional market strength, the report’s authors studied six market indicators (in order of importance) for each state: the availability of existing fueling infrastructure, the current density of the area’s light-duty alternative vehicles (AFVs), gasoline and diesel prices, the availability of state incentives for AFVs, and the proximity to domestic resources such as biodiesel and ethanol. The report’s conclusion found that while markets varied among states, every state showed promise for being able to deploy at least one alternative fuel.

Other major report findings were:

  • California, Illinois, Indiana, Pennsylvania, and Washington appear to have the best potential markets for alternative fuels in general
  • Wyoming showed the least potential due in part to its low population density, with weak markets for all alternative fuels except for CNG, although even that market remains sporadic
  • Of all the fuels, CNG is the most promising fuel for the greatest number of states. This fuel showed the most potential largely because freight traffic provides likely demand for many far-reaching corridor markets and because the sources of CNG are so widespread geographically.
  • National Renewable Energy Laboratory
  • For more information:
  • Clean Cities Technical Response Service Team
  • technicalresponse@icfi.com
  • 800-254-6735

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