The Growth Energy team has been working hard on expanding market access for ethanol across the country. To learn more about their efforts, I sat down with Kelly Manning during the Farm Progress Show and we kicked off the interview with talking about the roll out of E15 and the Prime the Pump program. Manning said the retailers have been phenomenal to work with. Today there are over 300 retail stations offering E15 in 25 states and by the end of 2017 there will be a 1,000 retailers offering E15. This will mean, says Manning, there will be around 5,000 pumps offering E15.
One of the keys, says Manning, is when retailers understand that offering higher ethanol blends give them an economic leg up over their competitors, they come on board.
I asked Manning what the tipping point was for the first set of retailers to come on board and then the others follow. He said that is what Prime the Pump is doing. He says that when retailers put that first E15 pump in and consumers purchase the fuel – E15 is outselling other blends at most stations – then as they build out new stations they put E15 in on their own.
But there are still some challenges to greater adoption that we discussed. One is that states such as California whose regulations do not allow retailers to sell E15. To date, we’re seeing the majority of E15 going in at stations in the Eastern 2/3 of the country. Manning says they need to do a better job of opening the West. “We’ve earmarked the top retailers out west and are starting to have discussion with them- much better discussions than we would have had two years ago when no one was offering E15. So the fact that others are out there offering E15 and know that it’s been a success, it’s making the discussion a little more exciting for some of these retailers in the Western states.”
One is the Reid Vapor Pressure (RVP) issues that keeps E15 from legally being sold during summer months to non-flex fuel cars. Thus, says Manning, retailers have to re-brand all their pumps for sale to FFVs only. “But retailers are so passionate they are doing visits on their own to their local districts to find out how E5 can be offered all year long,” says Manning. He also notes that its an archaic ruling that keeps E15 from being sold year round dating back to the early 1900s and that RVP is actually less with higher ethanol blends. Manning adds this isn’t just an issue for the ethanol industry – retailers are doing a lot of the work. Manning also notes that Growth will look at opportunities with the new administration to help open up the market, and he is also calling on the industry, retailers and consumers to tell ethanol’s success story to the coasts.
To learn more market access, listen to my interview with Kelly Manning: Interview with Kelly Manning, Growth Energy