USDA Secretary Vilsack defends Obama's record on ethanol

WASHINGTON – U.S. Agriculture Secretary Tom Vilsack pushed back hard Tuesday against complaints from some in the ethanol industry that the Obama administration has weakened its commitment to the alternative fuel.

In an interview with the Star Tribune, Vilsack said a new $100 million USDA program to build more blender pumps to distribute multiple grades of ethanol is just the latest proof of White House advocacy.

"There are 17 million flexible fuel vehicles on the road," Vilsack said.

Getting them much wider access to fuel with higher amounts of ethanol — from 15 percent ethanol to as high as 85 percent — will create demand that will help corn growers and biofuel refiners in Minnesota and across the country, Vilsack said.

He spoke as ethanol producers, at a meeting in Minneapolis, sharply criticized the Environmental Protection Agency for proposing rules that biofuel blending mandates are less than they want.

In Minnesota, which has aggressively promoted blender pump construction in partnership with the Corn Growers Association and the American Lung Association, the new USDA program is "great news," said Charlie Poster, an assistant commissioner in the state Agriculture Department.

"We're coming for that money," Poster said of federal blender pump dollars.

The cost of installing blender pumps is expensive. It can run to more than $100,000 per pump station depending on whether underground tanks must be replaced, according to Poster. The state now has 48 blender pump stations, more than nearly every other state. But the ultimate goal in corn-rich Minnesota is to have blender pumps at every service station.

In the short term, Vilsack thinks the blender pump grants can relieve some of the financial pressure brought on the agricultural industry by low commodity prices and the bird flu epidemic that has wiped out more than 8 million chickens and turkeys on Minnesota farms.

"These competitive grants will create additional markets for feedstock commodities," the USDA said in a news release.

The long-term reward for publicly subsidizing construction of the pumps, said Vilsack, is a growing source of biofuels that cost consumers less than regular gasoline.

But that depends on availability, as well as supply, Vilsack and Poster both noted. Currently, it remains difficult for drivers to find gas stations that offer the 15 percent ethanol blend known as E15 and especially hard to find the 85 percent ethanol blend known as E85. The answer is a single pump that offers any of three grades of ethanol — 10, 15 and 85 percent.

Meanwhile, Vilsack said the battle over ethanol is not between the White House and the ethanol industry. It is between the renewable fuel's advocates and oil companies that would prefer to sell ­regular gasoline.

He said the Obama administration has encouraged biofuel made from nonfood crops and piloted a program for a biofuel additive that can be put in jet fuel. Meanwhile, oil companies have launched "a broad-based attack" in the courts and Congress, Vilsack said.

The agriculture secretary also said that concerns by some environmental groups about ethanol pollution are rooted in "outdated studies."

"A gallon of ethanol competes with a gallon of oil in environmental impact," he said, adding that the export market for American-made biofuels is growing.

As for concerns expressed by some consumers that higher percentages of ethanol will hurt vehicle engines, Vilsack said consumers continue to buy the product for flexible fuel vehicles.

In Minnesota, the state mandates that all fuel sold contain 10 percent ethanol. The Environmental Protection Agency says cars made after 2001 are able to use up to E15.

"If it was true that ethanol wrecks engines," Poster said, "you'd see engines blowing up all over the place."

Jim Spencer • 202-383-6123