Omaha-Based Ethanol Company Says It Won't Make Money off Controversial Grant

February 18, 2020

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by Paul Hammel (Omaha World-Herald Bureau) ... Todd Becker of Omaha-based Green Plains Inc. said the $1.8 million shifted away from wetland and conservation easement projects would be parceled out in grants to retail gas stations, not his firm, to help pay for the installation of “blender” pumps that can deliver fuel with 15% to 85% ethanol.

Becker, as well as a state ethanol advocate, said the only reason his company was part of the grant application was to help increase the chances of obtaining the grant, which will be parceled out by the Nebraska Department of Environment and Energy to the gas stations.

“They needed a company to help them apply for the grant,” Becker said. “We don’t get one dollar out of it.”

He added that the company, which sells ethanol to wholesalers, may, in the end, sell more ethanol if more blender pumps are installed in Nebraska. But, Becker said, there’s no guarantee such pumps will use Green Plains fuel.

The recommendation by the trust board last week stirred controversy among some conservationists, who questioned why five higher-scoring grant applications from Ducks Unlimited, the City of Lincoln and the Nebraska Land Trust were defunded, and, instead, an extra $1.8 million in lottery money was recommended for the ethanol project.

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The corn-based fuel also has clean air benefits, Bredenkamp said, citing a recent USDA report that said ethanol produces 39% less greenhouse gas emissions than regular gasoline.

“It could be considered economic development,” he said of the grant. “But at the end of the day we use ethanol because it’s a renewable product and it’s better for the environment than the alternative.”

Green Plains will have a role in deciding who gets the grants, which are intended to pay half of the cost of 60 blender pumps and storage tanks. Department of Environment and Energy spokesman Brian McManus said the company will get one representative on the committee that chooses which retail gas stations get grants.

Green Plains, which has five ethanol plants in Nebraska that sell about 7 million gallons a year in the state, committed to providing about $25,000 of in-kind “administrative expenses” to the process of reviewing and awarding the grants, which would have to be matched 50-50 by the retailers.

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The public can still comment on the grant recommendations by the Environmental Trust Board by April 1 via mail, to the Nebraska Environmental Trust, P.O. Box 94913, Lincoln, NE 68509-4913, or via email at marilyn.tabor@nebraska.gov. READ MORE

Editorial: Resolve the ethanol issue so the Environmental Trust can do its work (Omaha World Herald)

The Public Pulse: Environmental Trust (Omaha World Herald)

Meeting to consider controversial $1.8 million grant for ethanol pumps is delayed (Omaha World-Herald)

Nebraska Environmental Trust board chooses ethanol pumps over wetlands for $1.8 million grant (Omaha World-Herald)

Group forms to help ensure that Nebraska Lottery money goes to grants for environmental projects (Omaha World-Herald)

Excerpt from Omaha World-Herald: The board’s vote affirmed a controversial recommendation in February, made with little discussion, to defund five conservation projects and instead award $1.8 million to several gas stations for installation of ethanol blender pumps that deliver higher blends of the corn-based fuel.

Supporters — who included Gov. Pete Ricketts, a staunch backer of ethanol who appoints nine of the board’s 14 members — said the switch funded a fuel that improves air quality and would help the state’s economy, and that clean air was even more important now given that COVID-19 attacks the respiratory system.

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Ricketts, at a press conference on a different subject, said the grant switch, which was approved on a 7-2 vote with three abstentions, was appropriate.

“This is something that’s going to benefit a huge part of our overall rural economy here in Nebraska,” he said. “It’s a very wise use of our grant dollars.”

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But opponents — including former State Sen. and Lincoln Mayor Chris Beutler, who cosponsored the bill that created the Environmental Trust in 1992 — said that the change ignored the Trust’s grant selection process and funded a project that was more about economic development and politics than the purpose of the Trust, which is to “conserve, enhance and restore the natural environments” of Nebraska.

“You’ve violated the integrity of the process … and violated the very purpose of the Environmental Trust,” said Randy Moody of Lincoln, a former lobbyist who worked on the campaign that led to voter approval of a State Lottery and use of the funds. “I’m not sure where gasohol pumps fit in there.”

At least a couple opponents of the decision questioned whether the switch was legal, citing state laws that bar grants from the Environmental Trust — which is funded by state lottery proceeds — that primarily deliver “private benefits” and go to organizations that could afford the project without state funds.

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More than 200 written comments were received by the Trust — a majority against the grant switch — and at one time, 120 people had logged into the meeting, which was held via an Internet video hookup because of the coronavirus outbreak.

The five conservation projects that were defunded were $900,000 to continue restoration of rare saline wetlands in the Lincoln area, $834,000 for three marsh restoration projects by Ducks Unlimited and $117,000 for the Nebraska Land Trust to finance a conservation easement to maintain a 2,900-acre ranch that features wild sheep habitat and a publicly accessible trout stream.

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Instead, that $1.8 million was redirected to a grant sponsored by the Nebraska Department of Environment and Energy and Green Plains Energy, the nation’s largest ethanol producer, to provide grants to rural gas stations so they can purchase and install blender pumps. That project had already been recommended for about $1.3 million in funding, but now will receive more than $3 million over three years.

Backers said that Nebraska, the nation’s No. 2 producer of ethanol, lagged far behind neighboring Iowa in the availability of the blender pumps, which are intended to increase the usage of ethanol, and, in turn, help sales and prices of corn.

A sore point with opponents of the switch was that the five conservation projects had been ranked much higher — from No. 7 to No. 36 among 120 applicants — in recommendations by the Trust’s grants committee than the ethanol project, which ranked No. 78. It was the lowest ranked project to be recommended for funds. In the past, such committee recommendations were usually followed when given final approval by the full board.

But several members of the Trust board said that they were well within their rights to shift priorities. The board, at the end of its meeting Thursday afternoon, passed a resolution stating that proper procedures were followed in switching the grants. READ MORE