Blender Pump Boom
Two transportation fuel booms are happening simultaneously in North Dakota.
SOURCE: Ethanol Producer Magazine by Kris Bevill, November 15th 2010
The western half of the state is in the midst of massive oil production growth, making the state one of the top five oil-producing states in the country. Meanwhile, the state has also more than doubled its usage of renewable fuels in the past year. According to the North Dakota Corn Council, the state consumed just over 167,000 gallons of renewable fuels in the first eight months of 2009. Between January and August this year, that number skyrocketed to more than 351,000 gallons.
Most of the credit for increasing renewable fuels use is being given to greater availability of ethanol-blends through the installation of blender pumps. The North Dakota Department of Commerce says 76 new blender pumps have been installed in the past year through its $2 million biofuels blender pump program, initiated last October. The 12-month program offers retailers $5,000 in addition to tax incentives for each blender pump installed. Applications for reimbursement are being accepted until May 1, 2011. As of Oct. 27, there were 172 pending applications. If all applications are approved, North Dakota could have more blender pumps per capita than any other state.
In addition to the state's incentive, the North Dakota Corn Council has been offering a $2,500 per-pump matching grant. When combined, these incentives cut the retailers' installation costs in half. Tom Lilja, executive director of the North Dakota Corn Council, says the blender pump incentive program could serve as a model for other states to follow. "The blender pump initiative partners our western oil fields with our eastern corn fields and gives our citizens' savings at the fuel pump through competition," he says. "We believe the blender pump initiative, along with investments in all our energy sectors, will provide our nation with a blueprint for energy independence."
Even with incentives, retailers wouldn't install pumps to dispense ethanol blends if they didn't believe the fuel would sell, as evidenced by their response to E15. Therefore some of the credit for the success of blender pumps in North Dakota should be given to consumers. Andrea Holl Pfennig, the commerce department's blender pump program administrator, says North Dakota citizens may be more willing to accept ethanol because many of them are aware of its benefits to the state's corn growers. "But we designed this program to be a win for everyone," she says. "The ethanol producers, the corn growers and the retailers."
Kent Satrang, CEO of Petro Serve USA, says he expects sales of ethanol to dramatically increase at his retail stations as a result of blender pumps. "What we've accomplished in the past year was to build a pipeline right from the corn field to the flex-fuel vehicles of North Dakota," he says. "The sales of ethanol next year in North Dakota are going to skyrocket."