Growth Energy features two retailers expanding E15 offerings

By Susanne Retka Schill | February 28, 2014

PHOENIX, Ariz. — It was five years ago that Growth Energy petitioned for the E15 waiver, attendees at the organization's fourth annual leadership conference were reminded in Phoenix, Feb. 27. "And finally, the blend wall has been cracked, just recently, co-chairman Jeff Broin, said in his opening remarks.

A panel in the first morning session featured two retail efforts to use E15 to differentiate their stores and drive new traffic. Mike O'Brien, Growth Energy's vice president of market development, led the panel, pointing out the retail market is very fragmented. Of the 135,000 retail sites in the U.S., 63 percent are under single ownership.  "There are 84,000 single store owners, ant their income level averages between $70,000 and $80,000," he said. "They tend to be very cash strapped." As a result, Growth Energy is trying to build alliances with national equipment providers, he said.

Growth Energy is also working with retail chains and associations on expanding E15 availability.  One of the speakers on the panel, Lance Klassen, represents a group of independent retail stations in the Minneapolis-St. Paul area as executive director of the Minnesota Service Station Association. With the help of Growth Energy, he said the group has freshened up its Minnoco logo and four retailers have joined, branding their stations and promoting higher ethanol blends. "E15 and E30 attracts a new customer base," he said, adding that the retailers were able to capture the value of the renewable identification numbers (RINs) through their ethanol supplier. As a result, he said, "We've seen aggressive pricing of E15 at 20 cents less than regular 87 octane."

MSSA has a goal of adding 18 to 20 stations to the Minnoco brand in the next year or two and 100 within five years. The Minnesota Department of Agriculture has provided 33 percent of the funding and the Minnesota Corn Growers Association 67 percent, while the Minnesota Lung Association has handled program details. Klassen added that education is a big part of consumer education. "If we can educate consumers that every gallon of 87 gas in 10 percent ethanol, if they get that, E15 and E30 will a much easier sell." Retailers under the Minnoco brand pay one-half cent per gallon to help with that effort.                                                                                                                                                 Dan Gordon, vice president of crude supply and trading at Delek US, also spoke. The company operates two refineries as well as 370 convenience stores in seven states in the Southeast under the MAPCO brand. The company already offers E85 and B20 in many stores in the chain, and has committed to offering E15 in the 10 to 15 megastores to be added each year ahead. "E15 can continue to differentiate us," he said. He said it is still unknown whether E15 is going to be widely adopted, "but we wanted to be open and prepared with the infrastructure for the future." If not E15, he said, the company assumes there will be other fuels in the future. There are multiple challenges, he added. For one, in the company's home state of Tennessee, it can't offer E15 at all until some laws are changed. The Reid vapor pressure (RVP) limitations create issues for a few months in the summer when the vapor pressure limitations take effect.

In closing the panel session, O'Brien said the liability issue has been put to rest, adding a favorite quote he heard: "If your mechanic ever tells you ethanol caused damage to your vehicle, you need to find a new mechanic because he's too lazy to find the real reason."