Thursday, July 22, 2010

Poet/Magellan ethanol pipeline project gets boost from DOE study

OMAHA, Nebr. - A proposed pipeline to send ethanol from the Midwest to markets in the East received a boost on July 19 when the U.S. Department of Energy released the findings of a feasibility study.
The study found that a dedicated ethanol pipeline would be feasible under certain conditions, particularly if U.S. markets were opened to fuel blends containing more than 10 percent ethanol or if use of E85 - a motor fuel with up to 85 percent ethanol - were expanded.
Rep. Lee Terry, R-Neb., said the report is good news for the project. Terry and Rep. Leonard Boswell, D-Iowa, recently introduced a bill that would provide federal loan guarantees for the $3.5 billion, 1,800-mile pipeline.
Terry cited lower fuel costs as a reason that U.S. policy is advancing to the higher use of ethanol, with the U.S. Environmental Protection Agency signaling interest in mandating fuel blends of at least 15 percent ethanol.
Terry said the findings should help lead to a vote before year’s end.
The bill by Boswell and Terry would extend to ethanol pipelines the same types of federal loan guarantees available to oil and gas pipeline projects. Backers say those guarantees are critical to making the project a reality.
Magellan Midstream Partners, a Tulsa, Okla., pipeline company, and Poet Ethanol Products, a major ethanol producer based in Sioux Falls, S.D., are working on the proposed pipeline, which would extend from Mitchell, S.D., to shipping terminals in New York. They hope to have it operational by 2015.

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