Budget Shortfall May Spell Trouble for E85 Group

Earlier this week, the U.S. Department of Energy announced winners of its funding solicitation to increase the use and access of E85 but one name not on that list--the National Ethanol Vehicle Coalition (NEVC)--may spell trouble for the very organization dedicated to expanding the alternative fuel.

Earlier this week, the U.S. Department of Energy announced 16 winners of its $3.1 million funding solicitation to increase the use and access of E85 (85% ethanol, 15% gasoline), but one name not on that list--the National Ethanol Vehicle Coalition (NEVC)--may spell trouble for the very organization dedicated to expanding the alternative fuel.

In April, DOE issued a three-part competitive bid solicitation related to E85--the first part, for $1.5 million, was for refueling infrastructure for E85 and other alternative fuels, while the second and third relate to the incremental cost of alternative fuel vehicles and the idle-reduction training and awareness for school districts.

Thirteen winners were announced for the first solicitation, including:

--the National Biodiesel Board, for a terminal installation project);
--World Energy Alternatives, for increasing biodiesel distribution capacity through infrastructure partnerships and projects;
--WestStart-CALSTART, for a proposal to build an E85 roadway in California;
--the New York State Energy Research and Development Authority, for a retail E85 refueling project;
--the State of Indiana, for E85/B20 in "replicating biofuels successes from Lake Michigan to the Gulf of Mexico;" and
--the State of North Carolina, for the southeast ethanol and biodiesel infrastructure corridor project-Georgia, North Carolina, South Carolina and Tennessee.

Funding levels were not provided for each of the projects.

Teaming up with the Midwest Corridor Group, the NEVC submitted one proposal with two projects: continued national deployment efforts of the NEVC and establishment of a Midwest E85 corridor. But according to an Aug. 29 letter from DOE, while the agency recognized "the significant effort expended on the part of your organization to prepare a response to this announcement," it opted not to fund its request. No further response was provided and DOE said it would provide feedback on the strengths and weaknesses of the application by Oct 31.

NEVC is the main E85 lobbying arm.

"As a consequence, of the $1.49 million appropriated by Congress in federal fiscal year (FFY) 06 "to expand E85 fueling capacity," ZERO dollars will now go to support national E85 deployment or the Midwest Corridor effort," NEVC Executive Director Phil Lampert wrote to his board of directors.

To add insult to injury, some of the funding for the E85 solicitation may have been taken from the $2 million in federal funding earmarked for NEVC in FY05.

But now it also appears that DOE is "diverting $800,000 that had been previously awarded to the NEVC from FFY 05 appropriations. We have a grant agreement in place for $1.8 million of funding added to DOE's FFY 05 budget by Congress, but DOE will now limit their award to only $1.0 million without providing any justification," Lampert said, according to information provided to OPIS. "Obviously this additional de-funding of national E85 deployment will have serious financial consequences. Significant reductions in staffing, contract support, field activities, web based materials and most importantly, direct financial assistance for E85 pump expansion, may all be anticipated," he added.

"If you share my concern that the Department of Energy's inexplicable actions thwart congressional intent and the tremendous progress we have made to expand access to E85 fuel across America, I strongly suggest you contact your elected representatives in the U.S. Senate and House to express opposition to DOE's efforts to limit the expansion of E85 fueling capacity," Lampert added.

The DOE official in contact with NEVC about the apparent funding loss was traveling on business today and could not be reached. Similarly, two more DOE officials did not return calls seeking comment.

-Rachel Gantz, rgantz@opisnet.com
Copyright, Oil Price Information Service

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