E15 Today, High-Octane E25 Tomorrow

One of the things that makes the American Coalition for Ethanol unique is our work alongside retailers and gas station owners to increase sales of E15 and flex fuels. This column appears in the May issue of EPM.
By Brian Jennings | April 08, 2016

One of the things that makes the American Coalition for Ethanol unique is our work alongside retailers and gas station owners to increase sales of E15 and flex fuels. Our senior vice president, Ron Lamberty, has nearly 30 years of experience with wholesale and retail fuel markets; he operated convenience stores for large chains, ran his own gas stations and worked with companies on branded supply agreements. Most importantly, Ron can explain the advantages of E15 and flex fuels to station owners in terms they understand.

We’ve recently intensified ACE’s outreach to fuel marketers through a new paid advertising campaign, called Flex Fuel Forward, featuring other people like Ron, station owners from around the country who have “been there, done that” when it comes to adding E15 and flex fuels. When fuel marketers look for information about new products, the sources they trust most are other marketers.

The Flex Fuel Forward campaign introduces station owners to other marketers who added E15 and flex fuels to their product mix. Their real-world results show that the rewards have been higher volume, more customers, better margins and higher profits. Our campaign provides educational materials to station owners and connects them with their peers who can explain why making the move to E15 or E85 helped them gain more customers and edge out the competition.

The campaign includes how-to videos and paid ads in the major print and Web-based news outlets station owners depend upon to keep up with their industry. Ultimately, the campaign is designed to put fuel marketers who have made the switch to E15 and flex fuels in a position to communicate with other station owners that the advantages far outweigh the costs—that the move to sell E15 to customers makes business sense.

ACE is focusing on E15 for important reasons. First, 70 percent of consumers say they buy the least expensive fuel when they fill up. Most of the time that will be E15. Second, implementation of E15 will require Underwriters Laboratories standardized infrastructure that can handle any blend up to 25 percent ethanol. In other words, the UL listing for E15-compatible dispensers actually allows the pump to dispense all the way up to 25 percent ethanol. That’s important because ACE and others are talking with automakers about a not-too-distant future where a high-octane fuel (maybe 97 or 98 RON) will be necessary to help them comply with fuel economy and greenhouse gas emissions rules. 

Automakers are changing the internal combustion engine—downsizing the motor, adding turbocharging, increasing the compression ratio. Making these changes requires a higher octane fuel which runs more efficiently than today’s fuel. It is widely expected that one way to make this new, high-octane, highly efficient fuel will be to add ethanol to today’s base E10 resulting in a consumer-ready fuel that contains approximately 25 percent ethanol. Automakers have expressed concerns about whether the retail infrastructure will be in place to dispense this future fuel, and we are able to show them that the so-called “E15 pump” today is capable of being an E25 pump tomorrow. For the ethanol industry, E15 represents a high-volume market today, and E25 promises to be an even bigger, higher-value, high-octane market moving forward.

While a lot of resources have gone into paying retailers to add equipment to store and dispense E15 or E85, ultimately, if we don’t help station owners understand that adding ethanol is a smart business move, it won’t matter. Ethanol producers didn’t add corn oil extraction to their plants because someone paid them to do it. Producers added corn oil extraction because they did the math and understood the investment was well worth the cost. The same is true for gas station owners.
The work ACE does to help them do the math and to understand the investment in E15 and flex fuels makes money isn’t glamorous work, but it is necessary and we’ll continue to make it a priority.
 


Author: Brian Jennings
Executive Vice President
American Coalition for Ethanol
605-334-3381
bjennings@ethanol.org