Ethanol Makers Look to New York for New Demand as State Allows E15

by Meghan Gordon (S&P Global Platts) Adoption will be slow as retailers add pumps, tanks; RFA sees up to 50 million gallons in new demand in first year; E15 still banned in larger fuel market California -- With New York state allowing E15 sales as of Wednesday, ethanol makers see the potential for significant new demand in the country's fourth-largest gasoline market, although adoption by retailers will take time.

The move could boost ethanol demand in the state by as much as 50 million gallons to 650 million gallons next year, Renewable Fuels Association President Geoff Cooper said in an interview.

Cooper said nearly all of the 5.7 billion gal/year of gasoline sold in New York already has 10% ethanol content.

"If that were to all transition to E15, we're talking about new demand for somewhere in the neighborhood of 250 million or 300 million gallons of ethanol -- quite significant in terms of potential volume," he said. "Of course, that's not going to happen overnight, and it's going to take some time to fully realize that demand."

Cooper said New York fuel retailers that offer E15 in other states will be the first adopters. He said local competition could eventually drive other retailers to offer E15.

"When E15 comes into a marketplace, it doesn't take very long before competitors in that market start to recognize that there's been a change," he said. "You look at places like Minnesota and Iowa, where E15 has spread very rapidly after the first few major players in those markets decided to get into E15." READ MORE

Excerpt from Ethanol Producer Magazine: Winters (Timothy Winters, president and CEO of Western New York Energy) said WNYE is working with the Renewable Fuels Association and Growth Energy on ethanol education in New York, but the groups are still in the planning phase at this point. And as ethanol groups move forward to drive adoption among retailers and consumers, Winters said the state has the advantage of learning from other markets that already offer the fuel. “There’s always lessons that you can learn from challenges that other states have faced,” he said, adding that New York doesn’t have large, independent retailers like Casey’s General Store or Sheetz. “We have a bit of a learning curve,” Winters said. “We have some smaller retail networks that are going to take some time.”

He said that while he hasn’t heard from any retailers who are ready, at this point to, to begin selling the fuel, he’s optimistic as retailers begin learning about E15. “I think they [the retailers] are in the learning phase at this point,” Winters said. “Nobody's come to us and said, ‘Yeah, let's go, we're ready,’ but I think that that's where our job comes; that’s the big next step.” READ MORE