Propel inks deal to install E85 pumps throughout West Coast

By Kris Bevill | August 25, 2011

Two California-based retail fuel providers have signed a deal that will expand the availability of E85 and biodiesel blends throughout the West Coast. The multi-year agreement between Pleasanton-based Pacific Convenience and Fuels LLC and Redwood City, Calif.-based Propel Fuels Inc. allows Propel to co-locate its Clean Fuel Point alternative fuel dispensers at more than 80 of PC&F’s 300 gas stations and convenience stores located in California, Washington Oregon and Colorado. PC&F will provide Propel with access to its retail sites while Propel will own and operate the alternative fuel equipment, provide fuel for the system and handle customer outreach and education.

“This first of its kind agreement allows us to quickly scale our business, opening the door to renewable fuel access across the Western U.S., America’s most underserved market for renewable fuels,” Propel CEO Matt Horton said. “And with U.S. automakers significantly increasing production of flex fuel and diesel vehicles, we will give customers true choice at the pump, making progress towards reducing our nation’s dependence on foreign oil and lowering carbon emissions.” 

More flex fuel vehicles (FFVs) are on the road in California than in any other state in the U.S., but there are currently only 62 E85 stations in the entire state, according to U.S. DOE statistics. Propel’s business model is focused on providing retail alternative fuel opportunities for consumers there and in other urban areas throughout the U.S. with high concentrations of FFVs. The company currently operates 26 alternative fuel pumps, selling E85 and biodiesel blends, in California and Washington. With financial assistance from the California Energy Commission and the DOE, Propel plans to install an additional 200 dispensers over the next two years.

The USDA allowed blender pump and E85 projects to qualify for Renewable Energy for America Program grants and loans for the first time this year, but Horton said his company would rather install pumps in areas that wouldn’t qualify for the program. “With REAP funds limited to rural areas, we will continue to focus on building our fueling stations in densely populated urban environments, the most underserved renewable fuel markets in our country, where the greatest demand happens to exist,” he said. “For this reason, partnerships such as ours with PC&F are critical to securing premium fueling locations were customers are already filling up.”

While it appears the market for E85 is growing as auto manufacturers crank out greater numbers of FFVs, there is some concern that eliminating the Volumetric Ethanol Excise Tax Credit at the end of this year will negatively affect demand for the fuel. In fact, Horton said removing VEETC will essentially create a 38-cent-per-gallon tax increase for E85 consumers. “This tax increase will be very harmful to American consumers at a time when our nation is just beginning to make real progress in breaking our addiction to oil,” he said. Propel and other advocates for higher blends of ethanol believe E85 should be treated as an alternative fuel rather than as a gasoline additive, therefore qualifying it for other tax incentives. Efforts are under way to include E85 in an existing section of the tax code that provides a 50-cent-per-gallon credit for alternative fuels.