Pennsylvania announces $3 million in Alternative Fuel Incentive Grants

Everyone thinks of California as the hotbed of green car legislation, and Cali does have a lot going on there (like the Santa Monica expo), but Pennsylvania is no slouch in the alternative fuel department. We've covered a lot of stories from the Quaker State (other, now slightly ironic nicknames for Pennsylvania: The Coal State, The Oil State) and the news just keeps on coming. Yesterday, Pennsylvania Governor Edward Rendell announced Alternative Fuel Incentive Grants worth $3 million. The goal, as always, is to "stimulate the production, distribution and use of biofuels made in Pennsylvania."
If you're interested in this story, I recommend you click through the jump and read all the details, but the short version is that grants will go to organizations that will be paying more to shift to biofuels. The city of Pittsburgh, for example, got $303,675 to buy 1.2 million gallons of biodiesel and build biodiesel storage tanks.

[Source: Pennsylvania Office of the Governor]
Pennsylvania Governor Rendell Announces $3 Million Investment in Alternative Fuel Technologies
Grants will Help Reduce Dependence on Imported Oil, Improve Environment

PITTSBURGH, Dec. 7 /PRNewswire/ -- Governor Edward G. Rendell today announced the investment of more than $3 million in Alternative Fuel Incentive Grants to stimulate the production, distribution and use of biofuels made in Pennsylvania.

The grants leverage more than $40 million in private funds for the production of almost 64 million gallons of clean-burning biodiesel annually, as well as for the installation of storage tanks that are needed to distribute and sell biofuels. AFIG also covers 100 percent of the added costs to eligible applicants who purchase high-percentage biofuels blends for use in their fleets.

"Pennsylvania has aggressively pursued a leadership role in advancing the technology and deployment of alternative fuels in order to build a dynamic new commercial sector that diversifies our energy supplies and puts people to work," Governor Rendell said. "These strategic investments will move us further down the road to true energy security for the people and businesses of Pennsylvania."

Environmental Protection Secretary Kathleen A. McGinty announced the $3 million investment of AFIG funds during an event at Heinz Field, which will provide much of the waste vegetable oil used to produce biodiesel for the city of Pittsburgh's fleet. The city received a $303,675 grant to cover the incremental cost of almost 1.2 million gallons of biodiesel and to provide biodiesel storage tanks at city refueling sites.

Pittsburgh joins other Pennsylvania entities converting fleets to biodiesel. The Pennsylvania Turnpike Commission, York County Transit Authority and Great Valley School District in Chester County also are early adopters of this environmentally and fiscally responsible fuels strategy. Because there are no mechanical changes needed for vehicle fleets to operate on the cleaner- burning biodiesel, the switch to this fuel is relatively simple. Further, it has been shown that biodiesel reduces wear on engines and helps to cut down on maintenance expenses.

"Pittsburgh's purchase represents a far-reaching combination of environmental protection and economic development," McGinty said. "By combining the recycling of waste vegetable oil with the local production of cleaning-burning biodiesel that will fuel its fleet, the city is supporting innovative new businesses, reducing waste and lowering emissions of soot and pollutants that form smog. This is high-performance public policy that truly deserves our support."

By emphasizing investments in ethanol and biodiesel, AFIG supports Governor Rendell's "PennSecurity Fuels Initiative" to produce and use 900 million gallons annually of clean, domestic fuel -- an amount equal to what the state is expected to import from the Persian Gulf 10 years from now. The Governor is investing $30 million over the next five years to build re-fueling and production infrastructure to support wide distribution of the alternative fuels.

Pennsylvania will be a national leader in production of biodiesel, with annual production capacity of more than 60 million gallons expected to be online by the end of 2007. The state also contains enough plant matter to produce in excess of 500 million gallons of cellulosic ethanol per year.

For the first time, AFIG offered incentives to Pennsylvania producers of biodiesel and ethanol: 5 cents a gallon to Pennsylvania producers of biodiesel or ethanol, up to 12.5 million gallons in 12-month periods. These clean fuels made from indigenous sources help reduce the state's dependence on imported oil, improve environmental quality and foster economic development by encouraging the deployment of innovative energy technologies.

The grant round also includes $75,000 for Greater Philadelphia Clean Cities' E85 Corridor project, which previously received $283,380 in federal funding. The project will convert at least 12 fueling stations to provide E85, a blend of 85 percent ethanol and 15 percent gasoline, along a 200-mile corridor stretching from central Pennsylvania to the Philadelphia suburbs.

Earlier this year, three Sheetz convenience stores in Allegheny County began offering E85. Other retail locations in Pennsylvania selling E85 are Pacific Pride in Middletown, Dauphin County, and three in Lancaster County: WoGo in Lititz, HC Rineer & Sons in Strasburg, and Molly's Convenience Store in Manheim.

The Pennsylvania E85 Corridor Project is the effort of private and public sector organizations working together to reduce petroleum use in the transportation sector and provide the fueling needs of flexible-fuel vehicles (FFVs) throughout Pennsylvania. There are approximately 160,000 FFVs operating in Pennsylvania already and the major automakers are offering numerous models of FFVs at no extra cost compared to similar gasoline-only units. Flexible- fuel vehicles are capable of using gasoline or ethanol blends.

Studies show that alternative fuels are cleaner than conventional fuels, emitting little to no particulate matter, less carbon monoxide and fewer pollutants that contribute to ground-level ozone, or smog.

The use of biodiesel and ethanol fuels offers an alternative to conventional transportation fuels that come primarily from petroleum imported from foreign countries, making AFIG even more significant as a means of promoting reliable sources of energy at stable, affordable prices for Pennsylvania consumers, businesses and local governments.

Governor Rendell signed an expansion of the state's Alternative Fuels Incentive Grant Program (Act 178 of 2004) into law two years ago, enabling DEP to increase funding for projects.

The law also allows DEP to offer a rebate instead of a grant to commonwealth residents who purchase hybrid electric and alternative fuel vehicles. Hybrid-vehicle purchasers can now apply throughout the year and will be eligible for the rebate as long as funding is available and DEP receives the required information within six months of the purchase. This year, Pennsylvania doubled the amount of grants available for hybrid vehicle rebates to a total of $3 million.

Since its inception in 1992, DEP has awarded almost $32 million through AFIG for 999 projects in almost every county in the commonwealth. DEP has also awarded more than $2.5 million since March 2005 to individuals who purchased hybrid electric vehicles. AFIG funds have leveraged more than $118 million from public and private fleet operators, fuel providers and the federal government.

Governor Rendell has pursued a broad array of policies and financial tools to promote advanced energy projects in the commonwealth.

Pennsylvania's Alternative Energy Portfolio Standard, one of the most progressive in the nation, ensures that 18 percent of all retail energy generated by 2020 comes from clean, efficient and advanced resources. The law promises to substantially build on the state's leadership in wind production east of the Mississippi, with wind sources providing enough clean energy to power some 70,000 homes.

Because of that leadership, Governor Rendell was able to lead a campaign to land the Spanish wind-energy company Gamesa Corp., the second largest wind energy company in the world, beating out many other vying states. With its U.S. headquarters in Philadelphia and manufacturing facilities in Bucks and Cambria counties, Gamesa represents an $84 million investment in the state that will create as many as 1,000 jobs over five years.

The state's clean energy law far surpasses other states in ensuring the wide distribution and use of zero-pollution solar power. By 2021, when the solar share is in full effect, utilities will be required to purchase 700 megawatts of solar-produced electricity -- the second largest solar requirement in the nation.

In November, Governor Rendell announced that Germany-based Conergy AG -- the world's largest solar power integration company -- has agreed to locate the North American headquarters of its financial subsidiary, voltwerk, and the East Coast operations of its solar engineering and installation subsidiary, SunTechnics, in Pennsylvania. The move will create up to 50 engineering, financing and management jobs and up to $100 million in clean energy deals over the next three years.

The commonwealth is leading in other areas of advanced energy development, creating jobs and cleaning up the environment while putting indigenous resources to work.

The Governor recently redoubled the commonwealth's "green" electricity commitment to 20 percent, making Pennsylvania the largest state purchaser of green electricity in the nation. On Monday, Pennsylvania received a 2006 Green Power Leadership award from the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) for its green electricity purchasing leadership. The annual awards recognize leading national green power purchasers and suppliers for their commitment and contribution to helping advance the development of the nation's green power market.

Pennsylvania also is second only to California in the number of buildings certified by the U.S. Green Building Council under the internationally recognized Leadership in Energy and Environmental Design program.

The nation's first coal gasification-liquefaction plant is being built in northeastern Pennsylvania. The facility will use waste coal to produce 40 million gallons of clean-burning diesel fuel each year. What the Governor is doing to support the project is unprecedented, creating a fuel consortium with private industry to purchase nearly all of the offtake. Pennsylvania will lock in its supply for some 10 years at prices well below current market values and ensure a long-term, viable market for the plant.

Pennsylvanians now spend some $30 billion per year on imported energy fuels. Instead of spending overseas, Governor Rendell is investing at home and putting Pennsylvanians to work.

Brought back to life after years of inactivity, the Pennsylvania Energy Development Authority has awarded $21 million in grants and loans for 57 clean energy projects that will leverage $240 million in private investment. The projects will create 975 permanent and construction jobs.

The Pennsylvania Energy Harvest Grant Program has awarded $21 million and leveraged another $51.9 million in private funds since its inception in May 2003 for projects using sources such as wind, solar, biomass, waste coal and recycled energy.

For more information on AFIG grants, visit DEP's Web site at, Keyword: "Alternative Fuels."

The Rendell Administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses. To find out more about Governor Rendell's initiatives and to sign up for his weekly newsletter, visit his Web site at:

The following is a list by county of the recipients of the $3 million in Alternative Fuel Incentive Grants.



Soy Energy Biodiesel Refinery -- $250,000 for construction of a 2-million- gallons-per-year refinery using soy bean oil as a feedstock. The system will use new technology that requires less water consumption.


Keystone Biofuels -- $440,000 to reimburse production of 8.8 million gallons of biodiesel over the next 24 months. Keystone's biodiesel is made from Pennsylvania feedstock and sold to Pennsylvania suppliers and blenders.


Middletown Biodiesel -- $325,000 to reimburse production of 6.5 million gallons of biodiesel over the next 24 months. The feedstock will be from Pennsylvania sources, and the product will be distributed locally.


Lake Erie Biofuels -- $625,000 to reimburse production of 12.5 million gallons of biodiesel by July 2007.


Philadelphia Fry-O-Diesel -- $250,000 to construct a 3-million-gallon refinery. The feedstock is low-cost trap grease collected from restaurants. The company successfully completed a pilot program and is moving to expand its operation. Commitments to sell the product locally have been secured.


United Biofuels -- $254,250 to reimburse production of biodiesel for two years. United Biofuels anticipates producing 1.89 million gallons of biodiesel through Oct. 2007 and 3.36 million gallons during the next 12 months.


These grant amounts represent an estimated incremental cost difference between a gallon of conventional diesel and a gallon of biodiesel blends. Final grant amounts will be reimbursements of actual prices paid at the time of delivery. Grants also assist with the purchase of the infrastructure necessary for distribution and sales of biofuels.
  • Pittsburgh, Allegheny County -- $303,675 for purchase of 1.2 million gallons of various blends of biodiesel, clean existing storage tanks and purchase five new tanks.
  • Bucks County Transport, Bucks County -- $25,000 for purchase of 100,000 gallons of B20.
  • Harrisburg, Dauphin County -- $61,725 for purchase of 750,000 gallons of B20.
  • Red Rose Transit, Lancaster County -- $28,000 for 800,000 gallons of B5.
  • Lehigh County Solid Waste -- $3,260 for 24,000 gallons of biodiesel blends at varying percentages.
  • Wilmington Township, Mercer County -- $4,020 for purchase of 2,000 gallons of B20.
  • Philadelphia Fleet Management -- $351,217 for purchase of 1 million gallons of B20, storage tanks and site preparation.
  • Lincoln Intermediate Unit in York, Adams and Franklin counties -- $67,840 for more than 1.9 million gallons of B5.
  • Greater Philadelphia Clean Cities -- $75,000 for E85 Corridor Project stretching from Philadelphia west to Centre County. The grant will support the fueling infrastructure for at least 12 E85 stations. The project also received a $283,380 federal grant.

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