E85 Boondoggle of the Day: Iowa RFIB Gives Gas Retailers $13m

Over the next three years, the Iowa Department of Economics Renewable Fuel Infrastructure Board (RIFB) will grant gasoline retailers and their pump-oriented pals $13m. The Tall Corn State is allocating taxpayer money to encourage these commercial enterprises to offer E85 to the customers. More specifically, Ethanol Producer Magazine reveals that “the maximum award can’t exceed 50 percent of the total cost of making the [E85 oriented ] improvements, or $50,000, whichever is less. Projects must be completed within eight months of the award date unless an extension is approved.” Seems fair enough, right? Problem: with gas prices hovering at $1.50 a gallon, E85 is a drug on the market. In other words, why convert to corn juice if no one’s buying? Yes, well, never underestimate the power of the boondoggle: “At its quarterly meeting Dec. 16, the Iowa Department of Economics Renewable Fuel Infrastructure Board approved more than $1.52 million in grants for 43 biodiesel and E85 retailers and terminal operators across the state to expand their renewable fuel infrastructure.” Now, shall we talk about the federal program?

“The 2007 energy bill established a new Renewable Fuel Infrastructure Grant Program in which the U.S. Department of Energy (DOE) is authorized to make grants available to assist retail and wholesale fuel dealers with E85 infrastructure or blender pumps,” the Iowa Department of Economic Development reminds us. “The grants can provide assistance totaling up to 33% of the cost to install, replace, or convert fuel equipment, or $180,000 for a combination of equipment at any one retail location. The DOE must adopt rules for the program by 2009.

“The grant program is subject to annual appropriations from Congress. The American Coalition for Ethanol will post details of the grant program on its website, www.ethanol.org as soon as they become available.”

We can’t wait!