Last year, lawmakers voted to spend 13-million dollars over the next three years to entice retailers to sell E-85, a blend of fifteen-percent gasoline with a lot more ethanol than most pumps dispense. Stations that put in pumps for E-85 could get 30-thousand-dollar grants.
But Dave Smitherman, chair of the Renewable Fuels Infrastructure Board, said retailers had to sign a five-year contract to get the incentive. There’s a waiver for retailers who install pumps but find they’re not selling much of the product — but he says it won’t be easy to get that waiver.
"Yes, there is a waiver process that you can go through," Smitherman agrees. But he cautions it won’t be easy. Gas-station operators applying for the 30-thousand-dollar grant shouldn’t assume that if a couple years have gone by and they’re losing money, they can automatically get a waiver from the five-year obligation, he says, because they won’t be able to.
Smitherman says most of his board wanted to require only a 3-year contract, but the Department of Economic Development, the Farm Bureau, and the Corn Growers demanded the five-year commitment. President of the Petroleum Marketers and Convenience Stores of Iowa, Dawn Carlson, agrees it’s a heavy commitment. There are 61-thousand "flex-fuel" vehicles on the road in Iowa that can run on E-85…but most owners don’t buy it, and the amount sold in a year totals just 25-gallons for each car that could burn it.
We’re asking retailers to "invest significantly" in their infrastructure, she says, locking them into installing the equipment and selling the product for five years knowing that "the demand isn’t quite there yet." Meanwhile a lobbyist for the Iowa Farm Bureau says five-year contracts are standard for any company receiving a state grant, and they don’t expect that to curtail applications for the program.