Momentum Building Around E15

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Momentum Building Around E15

09/22/2014

NATIONAL REPORT — It took some time for E15 to make its presence felt following the U.S. Environmental Protection Agency's (EPA) June 2012 approval of the fuel blend for 2001 and newer cars. But the alternative fuel is now sold in 91 gas stations (as of Sept. 1), with this number expected to rise exponentially in the near future.

Scott Zaremba, president of Zarco USA, jumped on board right away, becoming the first U.S. retailer to sell E15 at his Lawrence, Kan., location in July 2012, just one month after the EPA's approval. He currently sells E15 at two Zarco USA stores.

"I fundamentally think we have to make changes [as convenience store retailers]," Zaremba told CSNews Online regarding why he offered E15 so quickly. "If you stay the same, you will go on the same path and something catastrophic will happen. I'm in a competitive marketplace and have to be different."

E15 is now sold in 14 states and the alternative fuel is eligible to be sold in 44 states, with the exceptions being Arizona, California, Delaware, Hawaii, Nevada and New York, according to ethanol advocacy group Growth Energy.

As for stations that already offer E15, feedback has been overwhelmingly positive thus far, noted Mike O'Brien, Growth Energy's vice president of market development.

"We surveyed 40 locations in November 2013 that had at least 6 months of experience offering E15," he relayed. "There were zero complaints with E15 and that still [is true]. In fact, consumer reaction to E15 has been extremely positive. Consumers love saving money with E15 and have reported their cars perform the same, if not a little better."

According to Growth Energy, approximately 75 stations are expected to add E15 in the next six to eight months. All told, nearly 200 gas stations could offer the fuel blend by next summer.

Murphy USA Inc. and MAPCO Express Inc. are two retailers that recently began selling E15.

"We have an expectation of [offering E15 at] 11 sites by the end of this year, with a total of 16 by the beginning of 2015," Law Johnson, MAPCO's senior director of retail fuel, told CSNews Online. "Our goal is to be able to build stores with the ability to offer the 'fuel of the future.' By adding the additional tanks and flexible piping and dispensers at our store locations, we will position ourselves to be able to offer E15 and potentially other blended fuels in the future.

"We will be able to determine what the market demands and also be able to have a flexible product offering that can ebb and flow as we see commodity markets rise and fall," he added.

Zarco USA's Zaremba believes E15 is ready to take off, and he is quite pleased many other c-store retailers have followed his lead in selling the alternative fuel.

"It's always great to do what you believe is the right thing to do and have others come on board," he said. "But it's always hard work making progress when you are going up against an established [petroleum] industry that has been around 100 years."

O'Brien can see a day when E15 is considered the standard mid-grade fuel offered at the pump, as opposed to simply being characterized as an alternative fuel.

"There are two types of retailers: those who currently sell E15 and those who will be selling E15," he concluded. "The economics prove it. Consumers want cheap gasoline and E15 sells on average for 10 cents less than traditional petroleum."

For more on the rise of E15, look in the October issue of Convenience Store News