Who else has made the Switch?
Who else has made the Switch?
"This really is a mature market for ethanol."
““This is not a hiccup. It’s not a fluke. When we consistently sell, as a percentage of all our gallons of fuel, 17 percent to 27 percent ethanol, you see that consumers see the value in this product. We didn’t just flip a switch. This has been going on for six years now and I don’t think it’s going to change any time soon.”
“How much more product do we sell because we sell blends? It’s out of this world compared to E0. I wouldn’t go back. Modernization is always going to drive some business to your door, but when you are not offering ethanol, and the people want it, they are going to go somewhere else. It’s something that sets us apart, because blender pumps are not everywhere.”
Getting over the Blend Wall
(in testimony to the EPA): "The truth is that the secret to getting over the blend wall is to try to get over the blend wall.
"There is no such thing as a 10% blend wall unless petroleum marketers refuse to give their customers any choices above 10%. In my station over the past year, my monthly sales have been at least 18 percent ethanol overall, with a maximum of 28 percent – and we hit those percentages month after month, even with my station offering ethanol-free gas, and even with E15 sales restricted to flex-fuel vehicles in the summer low-RVP season. We are confident in the quality of E15, given EPA’s thorough testing, and so are our customers. When we began selling E15 'legally,' it immediately became our second best-selling fuel.”
(in testimony to the EPA): "Part of me hopes that the oil companies continue to refuse to even try to sell anything over 10% ethanol, because that refusal also drives up the value of the RINs that Midway Service and other stations like ours receive for proving that the blend wall is imaginary. Oil companies could force RIN prices back down to nothing if they just started selling E15 and E85. But until they do, we will be happy to sell our RINs to them, and those extra dollars help us offer lower prices at the pump, hire more people to handle the extra business, pay for our fueling equipment, and improve our bottom line."
"Deciding to add E15 is a no-brainer"
“We spent $18,000 per dispenser on our blenders, versus a standard issue pump that was around $12,000, so the difference was about $6,000 per dispenser. We have two, so it was an extra $12,000.”
“A new pump costs $15,000 right now. But there are cheaper options out there. The old UL spec said it tested E10 equipment for handling up to E15. That’s why deciding to add E15 is a no-brainer. It’s a way to set yourself apart from the competition and it doesn’t cost that much. It will bring people to your store.”
-Bruce Vollan: Midway Service, Baltic, South Dakota
"The numbers don’t lie."
“In the last 4 months of 2012, our sales of mid-grade blends, E30 and E85 were 95,000 gallons among the six locations in Fargo and Bismarck."
"Even in the beginning, Flex Fuel sales blew Premium out of the water."
“If you deny market access to E15, which is what Big Oil wants to do, they are 100 percent correct – you can’t get past 10% ethanol. That’s easy math. If they deny you the ability to sell the product that’s more than 10 percent ethanol then it’s pretty hard to get beyond ten percent ethanol. Duh. If you allow market access, and you allow E15 and E30 and E85, or even just E15 to be sold, then without question that wall will be smashed. For the first time in history you will have competition at the pump. Look at the lifespan of E15, this is a product that’s in its first days – in its first four months, PetroServeUSA sold more E15 than E85 and it sold more than premium. And then we still sold a tremendous amount of E30 and E85 on top of that.”
-Kent Satrang: Petro Serve USA, Moorhead, Minnesota
"It’s doing better than I thought."
“Last month (February 2014) I sold 43,500 gallons of fuel and all but 6,700 gallons was an ethanol blend. We’re way past this ten percent thing. That’s a dream of theirs (the oil companies). I market my E15 four cents less than my E10. My E20 is ten cents cheaper. My E30 is 15 cents cheaper and then my E85 is almost a dollar cheaper. At $2.25 a gallon that I pay for E85, it’s very attractive. My big mistake was not putting in 3 blender pumps.”
“September, I was up 6,500 gallons over the previous year, 2500 of it from the 3 new blends, E15, E30 and E85. October I ended being 11,000 gallons higher, 3,500 was the new products. November I was up 10,000 gallons, the new products accounting for 4,500 gallons of that. In January I was up 8,500 gallons and February I was up 8,600 gallon, and I am running about 5,000 gallons of the E15, E20, E30 and E85 by this point. E15 represents about 50 percent of that volume.”
“I’ve been in the business for 34 years. I own and run a convenience store, an auto repair shop and I started offering blends in August of last year. In order to do that, I had to rebrand, because the oil companies don’t want that under their canopy. My sales are up 20-25% a month, and the gallons that are up virtually all of that are new fuels. 87% of my total fuel sales were ethanol blended fuels before, now it’s 93%. For pure ethanol sales, I’m in the 20-25% range. It’s doing better than I thought, but it’s a pleasant surprise yes.”
"We’ve gotten beyond the wall."
“A wall is something you can't go through. We're already beyond that. We're way beyond E10."
“It actually cost me less.”
“My original estimate was $153,000 for my project. With the blender pump and the new tank and lines to handle it, it was $247,000. I found that I could get $100,000 from the renewable fuels people - $50,000 for the ethanol and $50,000 for the biodiesel. And then I found out I could get back up to 25 percent of the unfunded project back through the Rural Iowa Development Fund. So I went ahead and applied for that, and I held off, because you can’t break ground until they score it and award it. The total project, because we ran into a few problems, was $279,000, and out of that I got $131,650 back, so it actually cost me less, with the help that I got from the renewable fuels people, to offer more to the public.”
[Good also noted that $50,000 of his project was the extension of a 70 foot canopy – an expense he would have had with or without the addition of a blender pump.]
-Charlie Good: Good & Quick, Nevada, Iowa
“We’ll more than break through the blend wall.”
“I mentioned this to the EPA while [I met with them in Washington DC], this isn’t from a Pew Study, but just in the short time that we’ve been open, 33 percent of our sales have been with either E10, E15, E20, E30, E40 or E85."
“One of the biggest things that I’m hearing is the imaginary blend wall, or thinking we can’t meet this standard, it’s not attainable. I look at my sales, again 33% in one little county, is alternative fuel. We have 80 some counties in Ohio, if we had one station in each county, that’s a big number you take that all through the Midwest, all the way through the country, we’ll more than break through the blend wall.”
-Glenn Badenhop: American Freedom Energy, Liberty Center, Ohio
"You have options for your blender pumps."
“OEMs are only producing current generation models for flex fuel. What we are able to do is to take some of the older generation meters and make them E85 compatible. So people who have existing equipment have an option to move into flex fuels without having to buy all new equipment. The nickel plated meters can all be bought from us by my distributors for less than $1,000, so assuming a bit of a markup, the end use is probably going to see about $1,000 per meter.”
"You can go to the OEMs, Wayne and Gilbarco, and buy flex-fuel dispensers, but our approach is to take the existing equipment and upgrade it at a much greater savings. We have approached a number of people who were on the fence about selling E85 not knowing whether it was a viable option for them, and we said to them, before you go out and spend $20,000 on a dispenser, to try to find whether this is going to be a product that’s good for you, buy our equipment and put it into your existing dispensers. If the market is good for you and you decide you want to upgrade to a new dispenser, fabulous. If it doesn’t work out for you, you are only out the cost of a few components.”