Key U.S. senators from agricultural states, Tom Harkin and Richard Lugar are working to change federal rules to help clear the way for biofuels pipelines to run from the Midwest to East Coast markets.
Harkin, D-Iowa, said regulations on publicly traded partnerships interested in developing such pipelines are heavily biased toward “depletable” fuels like traditional petroleum.
“This is an absurd situation,” Harkin said on a conference call.
Harkin said legislation he’s crafted with Lugar, R-Ind., would remove certain barriers for publicly traded partnership to start moving ethanol and other biofuels from the production-rich Midwest to consumer-heavy cities on the East Coast.
“It will jump start the development of biofuels pipelines,” Harkin said.
Harkin told reporters there already is interest from investors in a dedicated ethanol pipeline.
Magellan Midstream Partners and Buckeye Partners earlier this year announced a proposal for an ethanol pipeline system that would run from the Midwest to Northeast.
According to Magellan, the proposed pipeline would have the capacity to supply more than 10 million gallons of ethanol per day.
The pipeline would gather fuel from facilities in Iowa, lllinois, Minnesota and South Dakota to serve terminals in markets such as Philadelphia and New York.
Harkin said he has been working with New York lawmakers interested in finding ways to reduce energy costs for their constituents.
“They can get ethanol,” Harkin said. “This is the cheapest way to do it.”