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The E15 Perspective from Those Marketing the Fuel

Submitted by on May 12, 2016 – 5:51 pmNo Comment

by Maura Keller (Fuel Marketer News)  … The argument among those marketers and retailers that have embraced the fuel is that E15 fuel allows them to market a cleaner-burning, higher-octane fuel that can technically be used by more than 200 million cars on the road today (EPA approval for cars 2001 and later), and it can typically cost less than the E10 competitors are selling.

As Ron Lamberty, senior vice president at the American Coalition for Ethanol (ACE) explains, although there may be an increased interest in the E15 blend, E10 and even E0 will still be around for a long time because although 80 to 85% of cars can use E15, 100 percent of cars can use E0 or E10.

“We’re just trying to make E15 available in a lot more locations,” Lamberty said. “The EPA approved E15 for use in all cars and light trucks more than five years ago, and there are only about 200 stations selling it today. Most of those stations are located in the Midwest. The reason most station owners have not offered E15 is they’re either contractually prevented from doing so, or afraid, or both—and both of those things have been created by the oil industry to prevent E15 from gaining a foothold. They’ve spent hundreds of millions of dollars to misinform and scare station owners, and it has worked.”

Kent Satrang, CEO of Petro Serve USA, has 24 stores, 25 percent of which are branded Petro Serve USA. The remaining 75 percent are branded with Cenex and Tesoro. He eagerly offers E15 fuel to his patrons.

“Cenex and Tesoro have been more receptive than most ‘Big Oil’ companies to E15 and they say they support ethanol,” Satrang said. “But you have to understand that both companies own multiple oil refineries and it is likely in their best interest financially to come up with programs to sell gasoline and not ethanol. The Renewable Fuel Standards requires that they sell a certain percentage of ethanol through the use of RINS, but they naturally want to sell their own products.”

Satrang said the biggest hurdle to growing the E15 market is a lack of a RVP (Reid Vapor Pressure) one-pound waiver from the EPA.

“The result is that we can only sell E15 through the cooler weather months,” Satrang said.

As far as warranties and older fueling equipment compatibility issues as they relate to E15, the Steel Tank Institute (STI) said that a steel tank is compatible for up to E100 ethanol. Later fiberglass tanks should also be capable of handling the fuel.

“Local gas station equipment installers tell me that all glues, adhesives and parts used in gas station infrastructure since 1984 are ethanol compatible,” Satrang said.

And as far as old fueling equipment, Lamberty said that people have to remember that the reason for the interest in E15 is that the UL spec for gasoline dispensers and all the hanging hardware said it was for gasoline and alcohol blends up to 15%.

“An example of this is the vapor pressure rule that the EPA has established, which the makes the fuel illegal for 2001-model year and newer vehicles during the summer driving season, labeling it Flex Fuel only. But then on September 15, it becomes legal for use in 2001 and newer vehicles,” Good (Charlie Good, owner of Good & Quick in Nevada, Iowa) said. “This is totally ridiculous.”

And this is the reason that more retailers do not sell E15, according to Good. “They might consider E15 where they would not have to put in new tanks,” Good said. “They could take a lower selling product and put in E15, but with the changes, they cannot free up tanks because one day is legal and the next day is illegal. They could get pre-blended E15 from the terminals and not need blender pumps. I have blender pumps so I can offer more blends, which helps increase profits by the blending.”

Fuel marketers can buy E15 from branded suppliers at their large fuel terminals. Because Petro USA has blender pumps, they buy E85 from the ethanol plant and they buy the gasoline from the oil refinery.

“This again allows the marketplace to work by allowing competition between Big Oil and ethanol,” Satrang said. “If I bought both from Big Oil, it would be to their financial benefit to mark up the ethanol they purchase more than they mark up their own gasoline.”  READ MORE / MORE

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