Gasoline Will Maintain Its Dominance

Which alternative fuels do convenience store retailers currently sell the most? Although certainly not a scientifically accurate poll, Sunday morning’s “Future of Fuels” educational session at the NACS Show wanted to find out the answer immediately.

According to instant text results, E85 is clearly the winner. This contingent was represented during the session by Mike Lewis, owner of Pearson Fuels in San Diego.

“If I started a convenience store today, E85 would be the first alternative fuel I would sell. At our location, we sell 100,000 to 200,000 gallons of fuel a month. About 25,000 gallons of that is E85, and it comes attached with a 27-cent-per-gallon margin.”

Despite the promising returns for E85 -- a blend of 85 percent ethanol and 15 percent gasoline intended for flex-fuel vehicles released in the model year 2001 or newer -- it does not have the most promising near-term future among alternative fuels. That distinction goes to diesel, said moderator John Eichberger, vice president of government relations for NACS, the Association for Convenience & Fuel Retailing.

“I believe diesel will be the next big source of growth. There will 40 light-duty vehicles [powered by diesel fuel] on the market by 2015,” he noted.

Eichberger backed up this statement by presenting another real-time poll that asked: “What do you intend to do with diesel?” Overwhelming, the audience responded via text that they plan to add diesel offerings to existing and/or new stores.

While the future looks bright for some alternative fuels, panelist Norman Turiano, principal of Turiano Strategic Consulting LLC, said gasoline will remain the dominant motor fuel of choice at least for the next 10 years. “There is a high level of interest in CNG [compressed natural gas], but some other alternatives are further out [from making an impact]. Hydrogen is so far out there, and electric takes too long to charge,” he said.

Eichberger agreed about the challenge with electric. “We need a breakthrough,” he said. “A charge has be five minutes or less to really make any inroads.”