Last week, I wrote a blog about <a href="http://www.ethanolproducer.com/blog/article/2015/05/blog-what-does-it-take-to-get-e15-at-a-retail-station" target="_blank">what retailers need to do to start selling E15 and other higher blends</a>, such as E30 and E85, at their stations.&nbsp;In my conversation with Mike O&rsquo;Brien, vice president of market development for Growth Energy, I asked questions about the cost of tanks, underground equipment and new fuel&nbsp;dispensers, especially blender pumps.
This week, I&rsquo;m writing about another option for gas station owners. Adding E15 and E15 only. After stumbling across some related information on ACE&rsquo;s website, I turned to Ron Lamberty, senior vice president of the American Coalition for Ethanol, for the scoop. Here&rsquo;s what he shared with me.
Lamberty agreed with O&rsquo;Brien on the positives for station owners that jump in with both feet to add the equipment needed to offer E15 plus higher ethanol blends. &ldquo;The benefit of a blender pump is, it doesn&rsquo;t matter what blend comes next,&rdquo; he said. &ldquo;For the long term, that makes a lot of sense.&rdquo;
And, it&rsquo;s true that today&rsquo;s registered E15 retailers do typically take that route. &ldquo;The majority, probably the overwhelming majority, are people who have blender pumps and sell E85 and probably E30 as well,&rdquo; he said. &ldquo;But it&rsquo;s not a requirement.&rdquo;
And that is Lamberty&rsquo;s main message. Gas station retailers need to hear that they don&rsquo;t have to spend large sums of money and add brand new fuel&nbsp;dispensers&nbsp;to offer their customers E15. No. 1, many retailers can sell the fuel from their existing equipment or with only minor changes to their existing equipment. Secondly, the fuel can be splash blended by starting with E10 and adding additional ethanol. "If you just want to do E15, we&rsquo;re exceptionally OK with that,&rdquo; he said. &ldquo;And, in most cases, you are going to have a small expense.&rdquo;
In fact, the Petroleum Equipment Institute has confirmed this. Lamberty pointed out that, in 2013, the USDA requested information from PEI on the cost of adding E15 to retail stations. The response came in a letter with several different cost scenarios.
Scenario one, for which a retailer could use existing equipment aboveground and underground, adding E15 to a gas station had an average cost of $1,167 and a median cost of $1,000. Labeling and signage changes could be the main costs in this scenario.
Scenario two was for gas stations that had fuel dispensers that were not compatible with E15, but were able to use a retrofit kit to satisfy the requirements of the local authorities that have jurisdiction. In this case, selling E15 from two fuel&nbsp;dispensers would cost an average of $6,961 and a median of $6,452. If the station also has to replace hanging hardware, the cost was an average of $8,385 and a median of $7,600. &nbsp;
Lamberty went on to say that for retailers who are already putting in new fuel&nbsp;dispensers, it&rsquo;s worthwhile to consider spending a little more money and installing a fuel&nbsp;dispensers&nbsp;that is UL listed for E25. &ldquo;The difference in those is usually a few hundred bucks, maybe $400,&rdquo; he said.
The backstory on UL listed fuel&nbsp;dispensers&nbsp;is that, although standard fuel&nbsp;dispensers&nbsp;are tested on 15 percent alcohol, UL previously said that, in order to have a UL listed fuel&nbsp;dispenser&nbsp;for E15, retailers would have to have an E25 UL listed fuel&nbsp;dispenser. When the ethanol industry questioned UL on this, the organization conceded that if the local authority with jurisdiction on this (such as, in some states, the fire marshal) is OK with standard equipment having E15 compatibility, that equipment can be used for E15. And, that is allowed in a lot of areas, Lamberty said.
For retailers building a new station or all new equipment, Lamberty considers an ideal set up to include a couple fuel&nbsp;dispensers&nbsp;with E85 and the rest all be UL listed for E25. With 2001 and newer vehicles all E15 compatible, there are now 15 years&rsquo; worth of vehicles on the road that can, as approved by the U.S. EPA, run on E15. And, there are three years&rsquo; worth of cars that have owner&rsquo;s manuals that say they are warrantied for E15 use. Those numbers increase every year, as new model year cars come out. &ldquo;Probably, at some point, you&rsquo;re going to want E15 at every position,&rdquo; he said.
Still, having said that, Lamberty goes back to his original point. Many station owners could start selling E15 without installing blender pumps, other new equipment or spending a lot of money. &ldquo;The fact is, given the number of cars that can handle E15, what we really need to do is have it widely available,&rdquo; he said. &ldquo;The way to make it widely available is to use or slightly adapt the existing stuff, rather than having everyone buying new.&rdquo;&nbsp;
&nbsp;

Does the cost of adding blender pumps and other new equipment to sell E15 and other higher ethanol blends seem high? Don't worry, there's another option for retailers that are ready to add E15 to their product list. 

Blog: Adding E15 and E15 only at a retail station

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