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South Dakota Reviewing Blender Pump Grant Applications

NEW YORK -- BYOB has taken on another meaning in South Dakota, where it translates into Buy Your Own Blend -- of gasoline.

It's the result of a quiet revolution at the pump, where for the past few years motorists with flex fuel vehicles in South Dakota and neighboring states like Minnesota, Nebraska, Iowa and North Dakota, have been able to choose the blend of ethanol fuel they'd like for their cars, instead of being limited to E10 and E85. The "secret" is the blender pump, which custom blends ethanol and gasoline, enabling stations to offer mid-level blends, such as E15 and E30.

The pumps, used for years to blend unleaded and premium gasoline, have found a new home in the ethanol market, and some look at it as a win-win situation for both petroleum marketers who gain from higher ethanol sales, and motorists who enjoy greater choices at the pump.

Now the South Dakota legislature, recognizing the benefits of ethanol blending by retailers, has taken a giant step to encourage the practice by offering gas stations one-time grants of up to $10,000 per blender pump to offset the cost of installation. Among the qualifications for the funding is having a minimum of four hoses, and dispensing at least E10, E15 and E85. (North Dakota also has a funding program, offering $5,000 per pump, with a limit of $40,000 per station.)

"Blender pumps are beneficial to marketers who want to give their flex fuel customers a choice of blend," said Dawna Leitzke, executive director of the South Dakota Petroleum and Propane Marketers Association.

South Dakota retailers have been offering such blends since 2006 when Leitzke wrote to EPA to clarify which ones could legally be sold for flex fuel vehicles.

"South Dakota was the first state to install ethanol blender pumps and for retailers who have made the investment, it has been successful," she said. "This new grant program will help to defray cost of installing more blender pumps, which helps everyone.'

Grant applications for the funding were accepted until May 21, with projects to be completed by December 2010.
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