Change Is Coming Fast in the Fuels Market
MIAMI BEACH -- After taking a look at the future of payments and customer engagement the previous day, the focus of the third and final day of the 2013 NACS Leadership Forum turned to the future of fuels.
Fuels represent 71 percent of the convenience store industry’s total sales, and convenience stores sell 80 percent of the fuel sold in this country, said John Eichberger, vice president of government relations for NACS, pointing out that 2007 was the peak year for fuel consumption in America.
"We will never sell more fuel than we did in 2007," he stated, due to a combination of slower economic growth during the recession, as well as government policies that are forcing the nation’s auto makers to increase the fuel efficiency of their fleets.
Eichberger further predicted that "by 2040, the fuels we sell will be extremely different from what we sell today, but most of it will still be liquid fuel."
The federal government’s push for ever-higher fuel efficiency, as well as a Renewable Fuel Standard that sets the goal that 27 percent of all gasoline sold must be biofuels by 2020, will have huge ramifications on the industry. "The cost of replacing fuel equipment to meet this goal will be more than $20 billion for the industry," said Eichberger.
Citing President Obama’s State of the Union address on Tuesday night in which he said it was "time to get serious about climate change" and that he will address the problem by executive order if Congress fails to act, Eichberger underlined the seriousness of the situation to the nation’s fuel dealers.
He also noted that the industry's interests are blunted by the different goals of other stakeholders in the nation's fuel economy. "Auto makers, refiners and the biofuels industry all have very different goals” when it comes to the future of fuels," he said. “How do we educate policy makers so they don’t make decisions in a vacuum without looking at the total ramifications of what changes they mandate through regulation and legislation?"
To that end, Eichberger announced the formation of a new organization, The Fuels Institute, to serve as an independent think tank on fuel issues, founded and funded by NACS. The hope, according to Eichberger, is that The Fuels Institute will foster collaboration among all the different stakeholders and assist in answering questions facing market and policy makers.
After Eichberger’s presentation, three charter members of The Fuels Institute -- former NACS Chairman Bill Douglass of W. Douglass Ltd.; former Wawa executive Norman Turiano of Turiano Strategic Consulting; and Michael Whatley, executive vice president of the Consumer Energy Alliance -- sat on a panel to discuss why they have joined together to help shape an economically and environmentally sustainable U.S. fuel policy.
The 2013 NACS Leadership Forum was held Feb. 11-13 at the Fontainebleau Miami Beach.