Rocky Mountain E85

From a good idea, to a better idea, to a comprehensive governor's coalition, the state of Colorado has invested in an ethanol economy that's a long way from the Corn Belt, but motorists, business owners and foreign countries are taking note of Rocky Mountain E85.
By Timothy Charles Holmseth | August 04, 2008
When Colorado leaders set out to make E85 available to motorists in their state, they unwittingly developed a recipe for success that other states can use.

In May 2006, Colorado Gov. Bill Owens established the Governor's E85 Coalition, which was subsequently re-organized into the Governor's Biofuels Coalition to include biodiesel in its efforts. In February 2007, then-elected Gov. Bill Ritter Jr. charged the GBC with quadrupling the number of biofuels stations and doubling the amount of biofuels sold in 2006.

Stacey Simms, biofuels and local fuels program manager for the Governor's Energy Office, says the GBC took the governor's request and ran with it. "In February 2007, Colorado had 13 public-private stations selling biofuels," she explains. "Today, after more than a year-and-a-half, the Governor's Biofuels Coalition is proud to announce that Colorado has 94 stations either open or under construction." That number represents growth not expected until the end of 2008, she adds.

In the spring of 2007, the coalition's success caught the media's attention. One of the first stations to add both biodiesel and E85 was in Evergreen, Colo., and was featured in an article in The Denver Post. "This article served as a business case and testimonial for other station owners considering adding biofuels," says Megan Castle, director of communications for the Governor's Energy Office.

Roger Guzman, a former GBC member who owns Evergreen Mountain Market, the business featured by The Denver Post, says biofuels gave him, as a small-business owner, a way to fight back when he was faced with a big-box retailer installing pumps right down the road. "All those guys are selling gas as a loss-leader," he says, referring to the marketing technique of losing money on a product to lure consumers. "We had to compete with that, so we had to have some kind of a niche that they didn't have and biofuels was the solution."

The results were not only positive but compelling.

In April 2007, total fuel sales were up 66 percent at Guzman's store, compared with the same time period the previous year. The basis for the sudden spike in traffic was mostly out of support from the public. Motorists who didn't even own flexible-fuel vehicles were coming in, he says. "They would come here [to] support what I was doing."

The attention that Guzman received after making biofuels available at his gas station was anticipated in advance by the GBC during its strategic planning. As each new station adopts biofuels, the coalition sees that as an opportunity to reach the public with a positive message about biofuels. People in the communities where these stations are located are invited to a grand opening event. "This event highlights the work done by the station owners, educates customers on the benefits and availability of biofuels and gives local officials the opportunity to highlight the community's successful public-private partnerships," Castle says.

Although biofuels and E85 are an attractive option for business owners, the coalition acknowledged that installing the infrastructure was expensive and devised a way to provide some assistance. "The coalition offers funding support to the maximum of 35 percent of the net project costs after tax incentives, but no more than $15,000 per applicant for E85 infrastructure and $10,000 for biodiesel infrastructure may be awarded," Simms explains.

The idea of adding E85 had been in the back of Guzman's mind for some time, but it wasn't something that he financially could have easily done on his own. "I got a ton of help from the governor's office," he says, explaining the financial assistance he received from both the federal and state government. "[I received] federal grants for half the cost and the write-off from the state." The governor's office also assisted in public awareness, he says. He also received a lot of publicity as his story appeared on the local television news in addition to The Denver Post article.

The GBC's efforts have led to an increase in E85 consumption. "With very few exceptions, sales of E85 have grown each and every quarter," Simms says, referring to positive sales numbers posted by partnering stations through April 2008. Although volume data hasn't been gathered for April through June 2008, she says, "preliminary results show that E85 sales in the state is trending over 1.2 million gallons a month."



Fleets Choose Biofuels
Gas station owners aren't the only ones who are benefitting from the GBC's work in Colorado. Art Hale, fleet manager for the state Colorado and fleet representative on the GBC, says flexible-fuel vehicles have become a significant part of the 6,000 vehicles in the state fleet. "We currently have more than 700 flex-fuel vehicles in the fleet and plan to order several hundred more over the next year," he says. "We just completed the installation of our first E85 fuel site in downtown Denver that we expect to help us meet our plan to reduce petroleum consumption 25 percent by 2012."

Hale firmly believes that the United States should be energy independent. "You need to first ask yourself, What are my options?'" he says. "Do we continue to buy petroleum from unstable Middle Eastern countries where 70 percent of our current U.S. supply is imported from or will our money be better spent by buying a product that is renewable and
produced here in the U.S.?"

Alan Brown manages a 270 vehicle fleet for the city of Littleton, Colo., and his desire to use biofuels led him to take a position on the governor's coalition. "I got the reputation of being a groupie' because I attended meetings persistently as a nonmember while requesting financial support for E85 infrastructure," he says. Brown says Littleton currently runs 23 flexble-fuel vehicles and pumps E85 at its facility. "We are consciously trying to purchase flex-fuel vehicles as we need to replace vehicles."

When E85 comes up in conversations in Colorado coffee-shops, Brown says he's sometimes the only one in the know. "The most important question I answer is which vehicles can use E85," he says. At the same time, he tries to educate people. "I point out that ethanol has environmental and economic advantages and, while I avoid the food-versus-fuel issue, I try to dispel some myths," he says.

Meeting the Challenges
Putting their success aside, Simms says there have been obstacles to clear and there will probably be more. In October 2006, prompted by the need to establish comprehensive safety requirements for an entire E85 dispenser system, Underwriters Laboratories Inc. suspended its certification for individual parts that compose an E85 fuel dispenser. Because of the obvious implications this would have on developing an E85 infrastructure in Colorado, meetings were held with the Colorado Division of Oil and Public Safety, the Colorado Division of Fire Safety and the Fire Marshal's Association of Colorado. The matter was resolved by developing published guidelines for E85 pumps until proper testing and certification could be completed.

"Another barrier was to develop an application and funding matrix to fairly evaluate project proposals for both public and private entities," Simms explains. "The GBC collaborated to create these criteria from the different entities in determining the funding allocations for projects."

Simms notes that the GBC quickly addressed any issues that presented themselves, and any challenges that lay ahead will probably be in the public relations area. "The current hurdle is addressing the media and the public regarding biofuels," she says. As consumers become more frustrated with the rising price of fuel and food, corn-based ethanol has taken its fair, and unfair, share of criticism. "The GBC is working to inform media, local officials and the public regarding these negative and often misleading media attacks on biofuels," Simms says.

Indeed there has been controversy and confusion surrounding biofuels as the nation begins to turn to renewable home-grown energy sources. Simms says the GBC recognizes that corn ethanol is a bridge to cellulosic ethanol, and that there are other options. "Biofuels, such as E85 and biodiesel, are not the lone solution to our energy, fuel and transportation issues," she says. "Biofuels, which are a clean, domestic resource, are a part of the solution that includes hybrid-vehicle technology, increased mass transit and higher efficiency vehicles."

An E85 Model
The GBC believes the steps it's taken to increase Colorado's use of E85 can be emulated by others. "This group has enabled the state to grow the infrastructure of biofuels sites from 11 more than a year ago to almost 100 sites today," Hale says. "I would like to continue to increase the number of all government agencies that have partnered toward these common goals, and continue to search for opportunities that expand infrastructure of all alterative fuels and alternative transportation technologies."

It seems that Colorado's success hasn't gone unnoticed. "In the past year, I have been contacted by eight other state energy offices, dozens of local communities throughout the nation, and officials from Brazil and Puerto Rico, who want to learn about our work here," Simms says. "What has happened in Coloradoa state outside of the Corn Belthas been inspiring."

In 2006, Colorado was awarded a Maximizing Alternative Fuels grant from the U.S. DOE to work on the development of E85 in the state. "By leveraging this with other funding sources, and publicizing the state and federal tax incentives for infrastructure support, Colorado's program has been recognized as a model for promoting biofuels," Simms says.

Simms says the state currently has some 300,000 FFV owners and they will continue to educate the public on the benefits of utilizing biofuels and Rocky Mountain E85.

Timothy Charles Holmseth is an Ethanol Producer Magazine staff writer. Reach him at tholmseth@bbiinternational.com or (701) 738-4952.