State Provides Service Stations With $250,000 Grant To Fund Biofuel Pumps

LANSING ? The state has announced a $250,000 grant to help service station owners defray the costs of installing 1,000 biofuel pumps by 2008 to make ethanol and biodiesel fuel more available to Michigan motorists, the second round in a series of state grants.

Five ethanol plants are already in production in Michigan, with two more under construction. Two biodiesel plants are also beginning production, with another plant in the works. In addition, the legislative package signed by the governor in July cut the gas tax by 36 percent for the purchase of ethanol and 20 percent for biodiesel.

?Michigan is moving aggressively to increase production and use of both ethanol and biodiesel fuels,? said Gov. Jennifer Granholm. ?Ethanol and biodiesel production facilities are coming on line. We?ve cut taxes on the purchase of these fuels, and now, thanks to this grant program, we will greatly expand access. Expanding access and use will help reduce the cost of gas for all of us.?

Granholm said that Michigan?s investment in alternative energy production and use will benefit consumers in the long-run as increased use of ethanol and biodiesel helps reduce the demand for foreign oil.

Legislation signed by the governor in July called for the creation of this program to increase the number of retail outlets throughout the state that provide ethanol and biodiesel to fleet owners and the public.

To implement the grant program, the state is seeking proposals from 501(c) (3) nonprofit corporations for state projects to provide incentives to service station owners to convert existing pumps or install new ethanol and biodiesel pumps. Ethanol and biodiesel are clean burning fuels that can be made from renewable resources grown in Michigan. Most ethanol is made from corn, and biodiesel is made from vegetable oils and waste grease. Over the last two years, rising oil prices and an increased number of biofuel production facilities in the U.S. have helped reduce the price difference between petroleum fuels and bio-based alternatives.

Today?s announcement is the second phase of the grant program. In July, NextEnergy received a $62,500 grant to provide the first round of grants to service stations. The initial grants are expected to be awarded in September.