The Walls Are Coming Down

Limited infrastructure, including rail transportation to haul biofuel feedstocks, pipelines to move biofuel to markets and pumps to dispense higher blend fuels like E85, have been major barriers to the further penetration of biofuels into the U.S. transportation market.

Thankfully that’s beginning to change as producer groups and others in the renewable fuels value-chain are finding exciting and inventive ways to strengthen and expand the nation’s transportation fuel infrastructure.

Here’s some of the evidence:

Last week the Illinois Corn Marketing Board (ICMB) and the American Lung Association (ALA) announced they had chosen Gilbarco Veeder-Root as their partner in an effort to expand the adoption of higher ethanol blend fuel in the state. Working together, they constructed a plan to provide retailers a more affordable way to obtain equipment compatible with higher blends of ethanol.

Through grants provided by ICMB, retailers will be able to purchase Gilbarco Encore® Flex Fuel pumps for their stations—pumps specifically engineered for alternative fuels. When a customer comes to this pump they will be able to choose from up to five fuel choices, reducing the risk of mis-fueling and minimizing the number of tanks needed by the station.

Dave Loos, Director of Technology and Business Development at ICMB says the goal is to install 500 E85 pumps throughout the state. Gilbarco Veeder-Root said the program comes at an important time for retailers—as the Gilbarco dispensers meet the 2017 deadline for retailers to accept EMV enabled cards at the forefront, or take on additional liability for fraudulent transactions. EMV cards contain chips designed to allow security and global inter-operability of credit and debit cards.

“Prime the Pump” is a new marketing effort to build infrastructure to help retailers offer ethanol blends. Ray Defenbaugh, president of Big River Resources has said, “We’ve got a good product that is priced reasonable, it’s efficient, it’s high octane. It’s hard to get the message out and we’ve had antagonists that have sometimes distorted that message.”

It’s a non-profit organization that is not a program of any of the ethanol industry trade organizations, but all are involved, he said, including the American Coalition for Ethanol, Growth Energy, the Renewable Fuels Association, state ethanol organizations and the National Corn Growers Association.

Prime the Pump’s goal is to encourage fuel (chain) retailers to adopt E15 at their pumps, in addition to E85. There will be a focus on infrastructure—such as providing offsets on equipment—and other efforts during the three-year initiative.

Funding for “Prime the Pump” is being raised in a manner similar to a voluntary producer checkoff. Ethanol producers are contributing a set amount per gallon produced. Other service and equipment companies serving the ethanol industry can contribute, too.

Protec Fuel, a fuel distributor and management company, recently announced a multi-phase introduction of E15 to metropolitan areas in the South and Southeast, opening 28 E15 and E85 stations across the region. Tom Buis, CEO of Growth Energy, says the company is being responsive to their customers and retailers who want choice and savings at the pump, including higher ethanol blends.

“Because of the success of our retailers who have offered E85 in the past, our retail customers are asking us for E15,” said Todd Garner, CEO of Protec Fuel. “With our proven expertise in the field, it’s natural for us to help meet the demand of many convenience store retailers—large and small—who want to offer products different than their competitors. Further, this can aid in helping to meet the renewable fuel standard blend wall, after market concentration of E10.”

Through this expansion, it’s not improbable that the number of stations offering an E15 ethanol blend could break 100 fuel stations. If true, 2014 will mark another year of record infrastructure expansion for higher blend fuels.

Protec Fuel has an alternative fuel division that specializes in turnkey ethanol programs for retailers, fleets and fuel distributors in the United States.

This industry-led build-out of new infrastructure to bring additional and higher blend biofuel options to the driving public demonstrates that the sector will no longer continue to wait on the nation’s legacy transportation fuel distribution industry to make the proper and necessary investments.

Diversification in our transportation fuels with an eye towards energy security, emission reductions and pricing competitiveness reflects a new way of doing business in the biofuels sector. Reducing these infrastructure barriers will help ensure that the United States will meet the goals of the Renewable Fuel Standard as envision by Congress, and that the 25x’25 Alliance will achieve its Vision for America’s Energy Future.

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