E85 Coalition Ranks Swell

SIGMA joins group seeking alternative fuel credit
By Holly Jessen | December 12, 2011

A group of E85 supporters has big dreams on a short timeline. The Coalition for E85, newly formed in October, wants to see E85 counted on a list of alternative fuels including compressed natural gas, propane and hydrogen that receive a 50-cent-per-gallon tax credit through the Alternative Fuel Credit. “E85 is not only an alternative fuel, it is our nation’s most widely adopted alternative fuel,” says Matt Horton, CEO of Propel Fuels, one of the lead members of the Coalition for E85. “If we are to make a meaningful dent in our dependency on foreign oil, we must expand E85 infrastructure and ensure this fuel has fair tax treatment.”

With the expiration of the 45-cent-per-gallon Volumetric Ethanol Excise Tax Credit expected at the end of the year, the Coalition for E85 predicts millions of flex-fuel vehicle owners will pay as much as 38 cents a more per gallon for E85. The coalition believes the increase will force many small businesses to close their E85 pumps—after investing more than $100 million in infrastructure to install those pumps. “It’s clearly at a point where ethanol as an additive—E10, E15—can go on without much in a way of subsidy,” says Jeff Trinca, vice president Van Scoyoc Associates, which has been hired as a lobbyist for the coalition. “The problem is that the E85 folks are saying, ‘We’re just a baby, we’re just starting out.’”

The newest member of the group, the Society of Independent Gasoline Marketers Association of America agrees. “Many of our members have made a significant investment to bring convenient access to E85 to our customers and they’ve responded by filling up tank after tank with E85,” says Tim Columbus, general counsel for the nonprofit, national trade association. “SIGMA believes that we cannot abandon E85 this close to self-sustainability, especially when everyone from auto makers, to retailers and consumers are supporting this domestically produced fuel. We’re joining the coalition to let our government leaders hear why providing access to American-made fuels is critical to building our nation’s economy.” SIGMA represents 250 corporate members that hold 30 percent of the petroleum retail market and sell more than 56 billion gallons of fuel yearly.

The Petroleum Marketers Association of America, which represents 8,000 independent petroleum marketers nationwide, joined the group in late October. “If we don’t enable E85 to compete with gasoline, we could see the entire flex-fuel industry disappear,” says Dan Gilligan, PMAA president.  “Our members, automakers, and 9 million American drivers have invested in E85 infrastructure and flex-fuel vehicles.  With E85 so close to self-sustainability, these investments must be protected.”

Today, only 2,700 retail stations offer E85 nationally, Trinca says. In order for more drivers to fuel up with E85 and more stations to provide it, it has to be priced attractively. “How do you make sure that we go from 2,700 stations to 35,000 stations in the next few years?” he asks. “And if the price point is too high, are the stations going to be able to make the investment going forward?”

Current supplies of E85 are derived from first-generation ethanol. As the industry moves forward, it can be produced from nonfood sources such as agricultural and household waste, algae and biomass. “Without the E85 system, the federal government’s investment in the development and commercialization of next-generation biofuels may be wasted,” according to the coalition press release.The Coalition for E85 currently includes Propel Fuels, Protec, Pearson Fuels, Clean Fuels Development Coalition, multiple ethanol industry associations, pump and tank companies, and individual E85 retailers.—Holly Jessen