Iowa grant request seeks infrastructure improvement, could also improve market for higher ethanol blends

The Petroleum Marketers and Convenience Stores of Iowa (PMCI) is asking Iowa’s legislators to implement a grant program to replace aging underground gas and diesel storage tanks. Many tanks are approaching or exceeding their life of 25-30 years and, over time, can become susceptible to leaks and other environmental hazards, says Dawn Carlson, president, PMCI, which represents more than 2,000 business locations in Iowa. Storage tanks currently in place were not designed for higher level ethanol blends so installation of new tanks could enable retailers to offer higher blends in the future, Carlson adds.

Since 2006, Iowa has offered grants to fuel retailers who offer E85 to consumers. These grants are cost-share agreements with 50% of the project eligible for funding up to $50,000, whichever is less, Carlson says. “Retailers are required to submit a grant application with a proposal outlining their project. Eligibility is dependent upon the type of biofuel that is detailed in the grant application. For ethanol, a retailer would agree to dispense E85 for a period of five years.  For biodiesel, a retailer would agree to dispense a minimum biodiesel blend of B2 for five years,” she explains.

“By simply extending the one cent/gallon Environmental Protection Charge (EPC) already collected at the dispenser, lawmakers could finish funding the cleanup of petroleum-contaminated sites and launch this new infrastructure grant program with no impact to the State Budget,” Carlson says. “A cost share program administered by the Underground Storage Tank Cleanup Fund Board would assist owners in replacing aged infrastructure with alternative fuel compatible infrastructure that will protect the environment and help advance biofuels.

“If the legislature approves the request, we anticipate that virtually all of our members will install equipment that is listed by an independent testing laboratory as compatible with higher blends of ethanol,” Carlson says.

More than 100 PMCI member locations currently offer ethanol-blended gasoline above the typical E10. “It’s difficult to place an exact figure on how many more members may choose to offer higher ethanol blends through the use of this program. However, with infrastructure being one of the primary hurdles to the sale of higher ethanol blends, we anticipate that this legislation would be a very significant step towards allowing more retailers to make the decision to sell higher blends of ethanol,” Carlson says.

Carlson adds, “If the grant program is expanded, Iowa may be able to show other states a successful road map toward addressing the infrastructure barrier that exists for higher blends of ethanol with existing retail infrastructure.” 

Read more blogs from Lynn Grooms on the biofuels industry.

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