The road from the refiner to the retailer was pretty rocky when the founders of FuelQuest Inc. decided to take a closer look at the fuel supply chain.

 
 "From the beginning, we looked at the fuel industry as a 100-year-old supply chain with a lot of participants," says FuelQuest cofounder and COO Doug Haugh. "In some parts, it was fairly fragmented and didn't have a backbone system that companies could use to manage their fuel systems."
 
 Although the pipeline system, for the most part, moves product seamlessly to refiners and terminals, it's a different story from that point on, involving thousands of trucking companies and hundreds of thousands of retailers. 
 
 Haugh and cofounder Rich Cilento, CEO, saw the need to develop a software system that companies could use to make the supply chain easier and more profitable to navigate. The result was a Web-based, paperless system that FuelQuest tailors to meet each of its client's needs. Those needs might involve sourcing or purchasing fuel, reducing freight costs or complying with environmental policies. The company also created a fuel tax automation product called ZyTax.
 
 FuelQuest designed its products for the petroleum industry, but it can easily be adapted to ethanol producers because FuelQuest enters the fuel supply chain "south of the refinery," which is exactly where ethanol enters the system, Haugh says. "Once the ethanol crosses the flange, it's part of the motor fuel supply chain." he says. "That's why we're so interested in the ethanol plants."
 It was actually FuelQuest's clients who prompted the company to look more closely at ethanol and how it flowed into the fuel supply chain. Clients were telling FuelQuest they wanted ethanol to enter their supply chain just like everything else. "They wanted us to work with the ethanol people and automate the process," Haugh says.
 
 Starting with a Clean Slate
 In July, Houston-based FuelQuest held a summit involving leaders from the agriculture, petroleum, alternative and renewable fuels, and transportation industries to discuss the evolution of the ethanol supply chain.
 
 Several issues were brought up at the meeting including:
 -The challenges and complexities for supply-chain participants
 

 -Feedstock issues and product supply-chain solutions
 
 -Current infrastructure gaps and possible transportation options
 
 -Business models within the ethanol supply chain
 
 -The future of the ethanol industry and trends that will impact its maturation
 
 Sam Burkett, marketing director for Dallas-based Panda Ethanol, says the meeting was an opportunity for people in the ethanol and petroleum industries to talk about problems in the energy supply chain. Panda Ethanol recently broke ground on a 100 MMgy ethanol plant in Hereford, Texas, and has plans to construct three more plants in Texas, Colorado and Kansas.
 
 "There were petroleum people there, and I think their concerns become our concerns in the ethanol industry," Burkett says. "They are concerned that traditional fuels are moved, transported and sold in the same way. The more [ethanol] conforms to the traditional model, the more comfortable it will make them."
 
 One issue that was brought up at the meeting was the reliability of the rail system to deliver ethanol in a timely manner. "[Ethanol buyers] want to be able to look at a map and say, ‘Here are all the plants, the rail line is on a schedule, and I can map that against demand and deal with a system where I know the risks,'" Haugh says. 
 
 FuelQuest clients, who are used to the petroleum industry's paperless system, were also taken aback when they were suddenly faced with the ethanol industry's paper invoices and bills of lading. 
 
 Because the ethanol industry is relatively new and there is no overall supply-chain system in place, Burkett believes it would be easy to implement.

 
 "One of the neat things with ethanol is that we don't have existing systems to convert or blow up," Burkett says. "We have a clean sheet of paper, so we should endeavor to have no paper."
 
 Burkett doesn't have to be convinced that FuelQuest's products would benefit the petroleum and ethanol industries because he once worked for the software company and knows what they have to offer. "FuelQuest is dealing with a lot of those people already, so they don't have to do this from scratch," he says. "It's something that's pretty easy to plug into." Burkett is also familiar with the petroleum industry, as he worked for Exxon for 13 years.
 
 Creating a Blueprint
 Companies that request FuelQuest's services can expect a three- to nine-month implementation process, depending on the size of the company. "We work with the client and map their business processes—everything from the order side of the equation, to the payables, to the pricing," Haugh says. "It's a value to the customers because [the customers] really haven't done that." In the process, FuelQuest will find and point out any redundancy in the company's operation. "We give them what we recommend as a best practice," Haugh says. 
 
 FuelQuest uses the completed map to create a blueprint that determines what, if any, products the ethanol producer needs. In some cases, the company may only benefit from FuelQuest's tax software; in others, it might also be in need of its price management and strategic sourcing capabilities. FuelQuest is already working with some ethanol producers, helping companies deal with the intricate fuel tax provisions.
 
 "Across the [fuel] supply chain, there's $60 billion a year in tax liability," Haugh says. "About $40 billion of that is filed and managed to the various state and federal agencies through ZyTax."
 
 Haugh believes the services his company offers will create efficiencies and money-saving opportunities for ethanol companies, without the burden of creating a new system. "We think that if ethanol producers can plug into that system, they can jump-start their business," he says. "They can leverage all the work that the motor-fuels system has already done." In doing that, ethanol companies won't have to impose any extra costs on their customers, which are also FuelQuest clients, he adds.
 
 The company, which was founded in 1999, serves more than 700 clients, including fuel suppliers, distributors, buyers and commodity traders. Some of FuelQuest's largest clients are Wal-Mart and Sam's Club, 7-Eleven, Chevron Corp., Shell Oil Co., UPS and Burlington Northern Santa Fe Railway. To find out more about the company, visit <a target="_blank" href="http://www.fuelquest.com">www.fuelquest.com</a> or call (866) 857-3835. 

 
 Rona Johnson is the Ethanol Producer Magazine features editor. Reach her at <a href="mailto:rjohnson@bbibiofuels.com">rjohnson@bbibiofuels.com</a> or (701) 746-8385.

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FuelQuest Inc. develops software to help its clients navigate the fuel supply chain. The paperless, Web-based system can easily be adopted by ethanol producers to more easily deliver ethanol.

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A Houston-based company offers ethanol producers tailored blueprints to efficiently integrate their product into the existing transportation fuels supply chain. Having already developed Web-based services and solutions for the downstream petroleum industry, FuelQuest Inc. aims to repeat its success in the renewable fuels business.

Plugging into the Fuel Chain

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