E85 Pump Pros

Propel Fuels and Protec Fuel share similar names and the goal of making America’s highest ethanol blend pervasive in high-population, FFV-dense regions of the country. Will a curtailed RFS and flex-fuel vehicle uncertainty impede their progress?
By Ron Kotrba | January 22, 2014

Despite the regulatory uncertainty beleaguering the expansion of higher-level ethanol blends and the future production of flex-fuel vehicles (FFVs) in the U.S., at least two American installers of E85 pumps are going full-throttle with their plans to grow the market. Florida-based Protec Fuel Management LLC is focused on pump installations in the South, Southeast, and Mid-Atlantic, while California-based Propel Fuels Inc. builds E85 access in the West. Steve Walk, vice president of Protec, and Matt Horton, CEO of Propel, spoke with EPM in December.    

How many FFVs are on the road today? 

Walk: Roughly 15 million. 
Horton: The number is growing by more than 2 million each year.

What percentage of the Big Three’s new vehicles are FFVs, and what percentage of the time are American FFV owners filling up with E85? 

Walk: About 50 percent of the Big Three’s vehicle models are now offeredin an FFV. Around 10 percent of FFV drivers use E85, in my estimation.
Horton: The U.S. Energy Information Agency estimates that nearly 2.47million E85-capable vehicles were made available in 2012—the highestnumber ever. 

Why are E85 pumps mostly found in the Midwest and relatively uncommon in high-population areas on the coasts?

Walk: Minnesota has the most E85 dispensers, while states like California,Florida and Texas have the most FFVs. 
Horton: Midwest states are leading agriculture producers, as well as majorethanol producers, and they have provided many incentives for the installationof E85 pumps. In addition to being further from ethanol production, retailersin urban areas also find that it can be more costly to build and permit fuelinginfrastructure in population centers. With stations in the Bay Area and Los Angeles, Propel has found that higher costs can be offset by far greatervolumes, if accompanied by the right marketing practices.

By how much has the E85 market grown over the past five years, and how much growth potential is in each of your targeted markets? 

Walk: The market has grown by around 30 percent each year, in myestimation. The growth potential in the South and Southeast are great. Floridaand Texas have the second-and third-highest FFV concentrations in thecountry—California is first—yet those states only rank as average in E85station offerings. The growth and opportunity is tremendous. 
Horton: The market for expansion is endless. Our primary focus is inCalifornia, with a target of 200 stations over the next few years. 

What is necessary to grow the E85 market, and where are the greatest opportunities?

Walk: Aside from the FFV concentrations and having station locationscentered around them, the greatest opportunities for Protec are in Georgia, Florida and Texas. Future U.S. DOE grants and cost-share programs would be helpful. 
Horton: Customers are ready. We see very strong acceptance and loyaltytowards renewable fuels, with more than 50 percent of our customers usingrenewables exclusively. In addition to the development of fuel technology, there must be a commitment in this country to building the infrastructure forhigher blends. This requires steady policy and a combination of private andpublic funding to support the expansion of renewable fuel. 

What barriers to market growth exist, and how are your companies helping overcome those obstacles? 

Walk: The barriers are mostly education—education on the benefits ofethanol, the benefits of E85 fuel as compared to gasoline, and the benefits of reduced emissions and tailpipe exhaust. That, and correctingmisinformation about ethanol in general, is important.
Horton: Our greatest challenge is meeting customer demand for additionalinfrastructure. While we’ve had good success implementing E85 in California, prominent barriers still include vehicle availability—E85 retailers rely onautomakers to continue offering FFVs—and funding for infrastructure. Bybuilding more E85 stations, we’re making it easier for automakers to continueto build FFV models, and we continue to see automakers adding FFVs totheir lineups for 2014 and beyond (there are more than 50 new vehicles in2014 alone). 

How does your company promote E85 to FFV drivers? 

Walk: We supply brochures, handouts, flyers, website support and properdispenser graphics and displays; and we partner in education and marketingefforts. 
Horton: Any time we open a station, it’s often the first time that communityhas had the chance to use renewable fuels. We’ve had to rethink traditionalfuel marketing, and work on providing a highly visible platform to introducethe renewable fuels to a mainstream driver base. We do a great deal ofeducation and outreach to encourage trial. Once drivers have a chance to tryE85, they stick around.