Seeing New Markets Clearly in 2020

FROM THE MARCH ISSUE: Gasoline retailers, including small chains and single-stores, offer important feedback and input for expanding E15's use in the United States.
By Ron Lamberty | February 17, 2020

As we move into the year, it seems like fewer people are using “2020” and its common association with perfect vision to make what they think is a clever point about “vision” or “focus” for the upcoming year. Aside from its lack of originality, what bugs me (and probably only me) when 2020 is used that way is the fact 20/20 vision isn’t perfect. 20/20 simply means from 20 feet, a person can see what they’re supposed to be able to see from 20 feet.

It’s more like standard vision, and what’s more (or less, actually), it’s standard vision of high-contrast black images on a white background. The real world has depth and shadow, texture and color, and it wraps around us. That’s why humans have more than one eye. Without information from those two “cameras” and a brain sorting their pictures while adding input from other senses to provide constant 150-degree wide, 3D moving images, we would only see black and white things right in front of us.
Straight-ahead, black and white vision tells us updated Reid vapor pressure (RVP) rules mean more E15 sales in 2020. No question. However, to move significant new ethanol volume in E15, we need additional perspectives to have a fuller picture. We need input and participation from small retailers—like the ones who took the lead in making E10 available nationwide—for E15 to become a coast-to-coast regular fuel.

Single-store and small chain retailers still own more than half of the nation’s convenience stores. Unfortunately, most of them also still think E15 requires more new equipment than it does, are concerned it will create liability that it won’t, and believe customers don’t want it like they have proven they do. They’re also smarting from the U.S. Department of Agriculture’s Biofuels Infrastructure Partnership money and industry matching funds mostly going to their larger, richer competitors, unintentionally convincing them they were right about the high cost issue (Why provide funds if it doesn’t cost much to change?), even while those bigger chain operators are proving liability concerns are a myth and there is plenty of E15 demand out there.

USDA invited fuel retailers and biofuels industry stakeholders to Washington, D.C., last November to talk about the BIP program and how a new and different program could help more fuel marketers offer higher biofuel blends. In January, USDA asked for input on a Higher Blends Infrastructure Incentive Program it has been working on since those first meetings last fall.

At both opportunities, ACE emphasized the importance of making funds available to smaller retailers and making sure those retailers know they’re available. Most stations could add E15 with a few relatively inexpensive changes to equipment, but the myth that adding E15 costs hundreds of thousands of dollars is so persistent, most retailers haven’t even bothered to check. We pointed out true volume growth requires higher blend availability in more places, not just larger volumes in the same places, and with flex fuels still moving far more new ethanol volume than E15, incentives must help retailers keep E85 and flex fuels available.

Most importantly, just as ACE reengaged environmental groups in discussions about ethanol and a Low Carbon Octane Standard, we asked some of the small retailers and groups who complained about the BIP program and have fought against E15 to tell us what they would need to sell more of our fuel. We also asked them to share their thoughts with USDA. Because as clear as some of us think our vision is, the best view usually belongs to the person standing right next to the chart.

 

Author: Ron Lamberty
Senior Vice President
American Coalition for Ethanol
605.334.3381
rlamberty@ethanol.org