“Over the years, if someone came to our pump and put diesel in their gasoline car, we view it is their fault as our pumps are clearly labeled and we don’t pay to have their tank pumped out,” Satrang said. “In the unlikely event that someone driving a 2000 and older car put in six gallons of E15, we would point to our signage and again we would not pay to have their E15 removed from their tank. Misfueling has not been a problem at all.”
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. The State of North Dakota was an early leader in requiring that stations selling ethanol certify the integrity and compatibility of all materials used in underground tanks, pipes and dispensers before mid-grade ethanol blends can be sold.
“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. “North Dakota has had a very successful program to assist retailers to put in UL-approved bio-blender pumps so most E85 sold in our state goes through a special nickel plated pump and all tanks and pipes are certified to be compatible.”
Editor’s Note: Bio-blender pumps are used onsite to blend E85 with gasoline to dispense various ratios of ethanol-blended fuel, such as E15, E30 and E85 from one dispenser.
Charlie Good, owner of Good & Quick in Nevada, Iowa, said there are no drawbacks in using E15. “The Department of Energy (DOE) tested hundreds of cars and decided to put the starting year as 2001 and newer to use E15,” Good said. “I had a conversation with the DOE official who told me they did not understand why E15 wasn’t being used more. I told her the EPA rules hurt the marketing and use of E15.”
Good, who also owns an auto repair business, said the benefit in increasing the use of E15 is economic. “It has created thousands of jobs and has eliminated payments to farmers based on production and low commodity prices on corn,” Good said. “And we can fuel our own economy with our own renewable fuels and we will not be beholden to Middle East oil.”
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%.
“If a retailer is worried about liability for E15, they should check with their insurance agent, and find that they’re covered just like with any other fuel they sell,” Lamberty said.
The most successful E15 marketers have educated their customers on what E15 is, and why they shouldn’t be afraid of it.
“Most of the consumer education comes when people try it and none of the predicted horrors ever happen—and then they just keep on using it,” Lamberty said. “But when it comes down to it, people don’t know much about any fuel—they just know it works or it doesn’t.”
For marketers interested in selling E15, in addition to getting insights from the American Coalition of Ethanol, each state’s corn grower’s organization and the American Lung Association can help. National groups such as the American Coalition for Ethanol and Growth Energy are very helpful with advice, labeling and promotional ideas.
And, as Satrang explains, North Dakota Governor Jack Dalrymple and the state’s Commerce Department have been national leaders to get E15 jump-started and promoted. In fact, North Dakota’s ethanol plant producers formed an Ethanol Council that champions the promotion of E15.
“I feel the North Dakota Petroleum Retailers Association’s leadership has been negative towards E15 and ethanol, perhaps because we have oil production in our state,” Satrang said. “Our company has always had the mission of partnering in the Bakken oil fields of western North Dakota with the corn and soybean fields of rural North Dakota to help make our state’s economy be the envy of all 50 states.”
As far as educating consumers about E15, Petro Serve USA has worked with the North Dakota Ethanol Council and the North Dakota Corn Growers Association on promotional campaigns to educate the customers right at the point of decision, the blender pump.
“We use pump toppers, nozzle talkers and pump wobblers to educate drivers about the benefits of E15,” Satrang said. “Also, we have display monitors in our blender pumps that educate customers in six to ten-second TV spots that run while they fill their cars.”
That said, Good sees more and more consumers using E15 but continue to be uninformed due to changing rules and regulations. “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 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.”
The positive price difference with E15 over E10 also has consumers noticing this fuel option.
“Ethanol always seems to be really competitive in the summer and less competitive in the winter months. Today my wholesale cost of E15 is 3.3 cents cheaper than E10. Last summer, E15 was seven cents lower cost than E10. That’s over 3.5% lower wholesale cost for E15,” Satrang said. “If you can save 3.5% on the cost of E15 and the loss of mileage is only 1%, that’s 2.5% savings that you can stick in your own pocket. That’s why we say choice at the blender pump puts change in your pocket. You choose the best value for your specific car each time you fill.”
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.”
And while some branded oil companies do offer E85 at the fuel terminal, others do not. As Satrang explains, E85 offered by branded oil companies currently is running about 25 cents per gallon higher than buying it directly from an ethanol plant.
“Oil companies are not in the business of selling products like ethanol that other companies produce,” Satrang said. “They want to sell petroleum-based products that they refine and market themselves and their prices tend to reflect this.”
So if you have sufficient underground tank storage you can buy E15 from the fuel terminals. But most stations do not have enough tanks for this, so E15 is most often a blend of E10 with E85 done through the process of a bio-blender pump.
“The other reason for blending at the pump is that it allows for the opportunity of competition between ethanol plants and oil refineries,” Satrang said. “This helps keep prices lower.”
