ACE, IRFA host tours for Mexican fuel retailers

By Matt Thompson | July 12, 2019

Fuel retailers from Mexico visited Iowa this week to get a first-hand view of the U.S.’s ethanol industry. The group toured a farm where corn is grown, an ethanol plant, a fuel terminal, and several retail stations.

The American Coalition of Ethanol, as well as the Iowa Renewable Fuels Association and the U.S. Grains Council hosted the tours. ACE Senior Vice President Ron Lamberty has made several trips to Mexico to host workshops touting the benefits of ethanol to retailers in that country. Bringing retailers to the U.S. allows them to see how the U.S. has grown its ethanol industry.

“Their stations are very similar to ours,” Lamberty said of the stations he visited in Mexico. “And while I’ve done 11 or 12 workshops, there’s still a little hesitation to go to a new product until you’re pretty sure it’ll work. We thought this would shorten that learning curve dramatically by having people stand in a station.”

Touring several stations, Lamberty said, served a dual purpose. In addition to showing the retailers how universal E10 has become in the U.S., they also got to see several different types of stations, from convenience stores, to stand-alone pump locations. “Where it’s a card lock, type of pump, people pull up and use their credit card. That I think is something that is maybe more realistic for a lot of their [Mexico’s] locations,” Lamberty said.

Lamberty said the tours have gone well, and he feels that much of the hesitation the Mexican retailers had about ethanol has been eliminated. Their focus now is on the logistics of getting U.S. ethanol to Mexico. “Any doubts they had will hopefully be erased and now our job is to make sure that we hook up the suppliers with the people who want to buy the fuel and get it rolling,” he said.

Lucy Norton, managing director of the IRFA, agrees. “[They] expressed how impressed they were with the fuel distribution system that we have in Iowa and the broad use of ethanol and it’s availability,” she said, adding, “I think we built up their confidence. Some of them are looking very strongly at putting in ethanol. They realize the value back to their customers, because it’s going to be a lower cost fuel, but also it’s going to help with the severe air pollution in Mexico by providing a cleaner burning fuel to their customers.”

Lamberty said that because Mexican retailers have not yet offered ethanol, much of the focus during the tour was on selling E10. “Our goal is to get E10 in there because then ethanol becomes part of the terminal infrastructure where they’ve actually got the fuel in the tanks and can do whatever they want to,” he said. However, he also noted seeing higher blends being sold in the U.S. may eventually prompt some retailers in Mexico to consider E85. “I think retailers in general, including some of the ones we’ve talked to, they really like E85, because it gives them a lot of flexibility because they own almost all of the product instead of some of the product,” he said.

While the retail station tours were useful, Lamberty said seeing the entire process was also valuable. “It was kind of cool that they had questions about food and fuel, and they go to see a pile of DDGs and understand what that’s for,” he said. “That’s maybe a way that we can keep them ahead of the negative stuff that we’re sure they’re going to have to battle with down there.”

Lamberty said the next steps for encouraging Mexican retailers to sell ethanol is to hold more workshops that feature retailers in Mexico who started selling the fuel. “What we’d love to be able to do is then at future workshops, in addition to maybe having us talk about what, how you retail fuel in Mexico, have some of these retailers from Mexico who are already doing it, stand up and talk about it,” Lamberty said.

Due to the trade war with China, Mexico’s ethanol market is an important one for the U.S. Norton said. “Mexico is a 1.2 billion market potential for ethanol gallons,” she said. “We feel that by bringing them up to Iowa, showing them what our 40 years of experience in having ethanol available can do for their country, we’re hoping that this will accelerate their adoption of ethanol-blended fuel.”