OPINION: What we have here is a failure to communicate

By Ron Lamberty, senior vice president, American Coalition for Ethanol | February 06, 2019

Retailer interest in E15 has increased in the past few months, based in part on the belief that last fall, at an event in Council Bluffs, Iowa, President Trump “signed something” making it legal to sell E15 year-round. That’s not quite what happened, but the President said it would be done before the summer Reid vapor pressure (RVP) season begins on June 1, and the process is underway so we’re hopeful all retailers will be able to sell E15 this summer.

We expect more petroleum and convenience store industry media attention to this E15 RVP change once EPA submits the rule POTUS promised (hopefully yet this February), and the topic is on the agenda at many of the fuel and c-store conferences being held this spring. ACE will be attending a half-dozen or more petroleum marketer conferences and trade shows this spring, and will be bringing experienced real, live E15 retailers with us.

What you’ll hear from them is that it wasn’t difficult or expensive to add E15 to the fuel slate at their location or locations, and they haven’t had any issues with liability. They’ll also tell you they’re gaining new customers on the fuel island and inside the store and making more money since they started selling E15.

The more retailers we talk to about E15, the more we realize we need to correct misconceptions we’ve had some hand in creating. Don’t get me wrong—ethanol opponents in the oil industry have spent plenty of money to create and dispense the overwhelming majority of E15 misinformation. But the ethanol industry and its supporters are hardly blameless. We’ve put out a mixed message to the fuel retailing community—especially single store and small chain owners and operators. 

When EPA granted its partial waiver for E15 in 2011, we said it would cost little or nothing to add this new fuel grade. That was true then and it’s true now. Ethanol opponents threw around outrageous cost numbers for adding E15, usually obfuscating the truth by using E85-compatible equipment costs, and always assuming station owners would be required to add dispensers, tanks and lines to offer a new grade of fuel. Apparently, oil companies can’t understand why station owner would be willing to give up premium sales making up a few percent of their fuel volume, or repurpose the midgrade infrastructure that is as good as the day Big Oil forced stations to install it, since nobody ever buys midgrade. Changing one of those products to E15 costs next to nothing and 90 percent of cars on the road can use it. What’s holding everyone up?

Unfortunately, we muddied that message ourselves when the USDA Biofuels Infrastructure Partnership program was announced. Suddenly, we went from telling folks it was practically free to add E15, to talking about $200 million in grants from USDA, states, and ethanol industry initiatives, for pumps, tanks, and other equipment for blends above 10 percent ethanol. That was confusing. Why would station owners need millions of dollars to offer a product we said they could sell with existing equipment? Is ethanol making this stuff up to trap us into long-term agreements like the oil companies did?

To top that off, ethanol people made a big deal in the press about E15’s introduction to the market by large, respected retail convenience store chains. That was meant to capture the attention of others in the c-store industry—and it did. But that special attention also created some heartburn in the single and small chain owners mentioned earlier. Suspicion about real costs to add E15 intensified and fed into big oil’s “high cost” propaganda, creating the perception that only big retailers put in E15 because only big retailers could afford to do so.

Later, when press reports showed their “rich” competitors got BIP money and other funds, single store Mom and Pop stations and small c-store chains—the people who were always first to move ethanol—whether it be E10 or E85—had enough of E15. Over the years, they had pioneered new ethanol fuels to differentiate themselves from their more well-known and well-heeled competitors, often with financial assistance from corn and ethanol groups and government programs. They added ethanol and created the “proof of concept” the big guys needed to pull the trigger later. This time, they feel like they’ve been bypassed, and the rich are getting richer at their expense.

That perception is not reality. Many, many single store owners and small chains took part in the USDA BIP program, and are doing very well selling E15. ACE has been featuring those people in our ads and in videos and stories on flexfuelforward,com. If E15 is ever going to spread nationwide, we can’t get caught up in whether or why some retailers don’t want to have anything to do with E15. We have to answer the critics in the c-store industry and address their concerns. As for ACE, we continue to do our part to correct the misperception by bringing retailers with us to trade shows and workshops to talk with other owners and assure them they can do E15.