Ethanol has had something of a fall from grace over the last decade.

Increasing amounts of ethanol must be blended into the U.S. gasoline supply to comply with the Renewable Fuels Standard passed in 2007.

The realities of ethanol production and gasoline use have made that standard harder to meet in recent years, but ethanol continues to have powerful advocates.

DON'T MISS: Bills To Kill Renewable Fuel Law, Ban E15 Ethanol Fuel Likely Doomed

The U.S. Department of Agriculture (USDA) is now offering states up to $100 million for the installation of ethanol "blender pumps," according to TheHill.

The agency will match state funds spent on blender pumps--which add varying proportions of ethanol to gasoline at fuel stations.

USDA officials hope the funding program will double the number of blender pumps in use.

Big square baler harvesting wheat straw for production of cellulosic ethanol

Big square baler harvesting wheat straw for production of cellulosic ethanol

This, in turn, is meant to encourage consumers to choose blends higher than the E10 (10 percent ethanol, 90 percent gasoline) found at most gas stations.

All vehicles sold in the U.S. since 2001 are rated for E15--15 percent ethanol--but older models can only run on E10.

ALSO SEE: Senate Bill Introduced To End Ethanol Mandate For Gasoline

That's where the blender pumps come in. They can be used to dispense both E15 to newer models, and E10 to older cars and trucks.

Proposed EPA E15 gasoline pump warning label for ethanol content

Proposed EPA E15 gasoline pump warning label for ethanol content

The added cost of installing these pumps has been one of several roadblocks to the implementation of E15.

Several carmakers also sell "flex-fuel" vehicles that can run on either gasoline or E85--a blend of 85 percent ethanol and 15 percent gasoline.

However, because so few stations sell E85, most of these vehicles run entirely on conventional gasoline, which currently has just 10 percent ethanol in it (known as E10).

The blender pumps enable gas stations to sell E15 gasoline, which was approved by the EPA several years ago amidst controversy over its potential impact on older vehicle engines and small engines of various types.

MORE: EPA Proposes Lower Increases For Ethanol In Gasoline

Thus far, the proportion of gas stations with blender pumps is negligible--and that's what the Agriculture Department funding hopes to address.

The USDA announcement comes just after an Environmental Protection Agency (EPA) proposal to cut the levels of ethanol required by the Renewable Fuels Standard.

After some delay, the EPA proposed setting the level for 2014 at 15.9 billion gallons--the actual amount used and significantly less than the 20.3 billion gallons required by the standard.

FlexFuel badge on E85-capable 2009 Chevrolet HHR

FlexFuel badge on E85-capable 2009 Chevrolet HHR

The EPA proposal also cuts 2015 and 2016 targets by about 25 percent. The public comment period for these proposed rules runs through July 27.

The agency hopes to finalize 2014-16 rules by November, and release the 2017 target on time next year.


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