ACE shares technical ethanol information with prospective retailers in developing ethanol market just south of the border
Posted on 10/29/2019
Sioux Falls, SD – Last week, American Coalition for Ethanol (ACE) Senior Vice President Ron Lamberty returned to Mexico to speak at the first technical ethanol information forum to be held in Juárez, Mexico, near El Paso, Texas. These forums are a joint effort of the U.S. Grains Council (USGC) and the Mexican Association of Service Station Suppliers (AMPES) to inform Mexican petroleum marketers about opportunities in sourcing, marketing, and retailing ethanol-blended gasoline. Lamberty attended four other workshops this year, including one in Tijuana, another border city minutes from San Diego’s fuel terminal. Juárez marks Lamberty’s twelfth USGC/AMPES workshop.
“Like Tijuana, Juárez is one of the top destinations for U.S. ethanol in the short-run because El Paso and Juárez are basically one large metropolitan area, divided into two different countries by the Rio Grande,” Lamberty said. “El Paso has a two-billion-gallon refinery and Kinder-Morgan and Magellan fuel terminals already supply stations in Juárez and other cities in the state of Chihuahua. Ethanol is already in those terminals, and some E10 has already been purchased and delivered to stations in the area.”
In August, Lamberty moderated a panel with USGC’s team in Mexico, and he joined a panel at the Argus Mexico Fuel Markets Summit in Mexico City to discuss the role the U.S. can play in Mexico’s fuel market. As the Mexican government deregulates the petroleum market, retailers are expressing interest in incorporating ethanol blends. Now even Pemex, Mexico's state-owned oil company, has indicated it may be interested in blending ethanol with gasoline.
“Last month, Pemex’s proposed budget for 2020 included $50 million toward reconfiguring terminals to handle ethanol,” Lamberty said. “The original project, which Pemex stopped in 2008, called for 5.8 percent ethanol in Magna (regular) gasoline, and if the same timeline is used, Pemex could be buying 50 million gallons of ethanol a month sometime late next year. Although nothing is certain, this is encouraging news and the USGC team in Mexico is doing a great job helping Mexican “gasolineros” understand adding ethanol is a way for them to make more money while offering customers a cleaner, higher octane fuel at a lower price.”
Lamberty said it’s likely some of Pemex’s large customers are pressing them on ethanol.
“When ACE, IRFA and USGC brought some key Mexican fuel marketers to Iowa to give them an up-close look at how easily ethanol can be incorporated into the fuel supply, they wanted to go back and find a way to add ethanol to their fuel slate,” Lamberty said. “Most of those companies buy their fuel from Pemex and Pemex still supplies probably 90 percent of the stations in the country. But, they’re not the only game in town anymore. If their customers ask for ethanol, Pemex will have to find a way to get it to them, and there are plenty of people who can help them add ethanol to Mexico’s gasoline.”