Fuel stations in
would get $5 million annually in grants
to install new tanks to hold 85 percent ethanol blends under a plan by state
The GOP lawmakers said the nine-year
effort could dramatically boost the availability of renewable fuel. They said
it is the way most likely to increase ethanol use in the state.
About 100,000 vehicles in the state are equipped
to run on E85, but only 26 tanks in
dispense the fuel, The Associated Press reported.
With the current high cost of fuel, Senate
Republican President Jeff Lamberti of
said demand for
flexible-fuel vehicles would soar if the fuel were more widely available.
The cost to install the tanks and pumps is
up to $80,000 per station.
The Republican plan would provide grants
of $25,000 to retailers to install the new pumps, as well as make them eligible
for federal tax credits.
A 10-cent-per-gallon tax credit also would
be extended to biodiesel.
Money to pay for the E85 program would
come from the Iowa Values Fund, the state’s economic development revenue
Gov. Tom Vilsack,
a Democrat, said the proposal was a “worthwhile idea,” but questioned tapping
into the values fund, the Sioux City Journal reported. Instead, he said money from the state’s settlement with tobacco
companies might be a better source.