In our quest for energy independence, we’ve run across quite a few different terms with abbreviations. So many, in fact, sometimes it’s hard to keep track. That’s why we’ve decided to organize them all in one place. Read up, bookmark the page, and become an expert.
Natural gas normally gets a great deal of attention as a feedstock for power generation: As the U.S. makes the gradual transition from coal, natural gas has taken center stage in the spotlight because it burns more cleanly than coal. Read more →
Of the $1.3 billion the federal government spends fueling its hundreds of thousands vehicles each year, the vast majority — 78 percent — is spent on gasoline. But if the Navy has its way, it may not be that way for much longer.
*But what if we can’t reach the future in time?
Read more →
Picture this.
You’re driving down the road and you notice your tank is almost empty — time to fill up. Read more →
The big oil companies aren’t blind to the threat posed by ethanol. And now it appears they’re doing all they can to hamstring wider access to the fuel by artificially increasing the price of E85 at their gas stations.
Aaron Walsh’s first car was a 2008 Chrysler Sebring flex-fuel, meaning it could take E85 or any other ethanol blend. It was a good car.
But his new car … wow. The 2012 Dodge Charger, in Tungsten Metallic gray. Now that’s a proper car for a young man. And Walsh never would have bought it if it didn’t come in a flex-fuel version.
“That’s my biggest reason for using it,” says the student from Haslett, Mich., just east of Lansing. “I absolutely hate the petroleum industry.”
His reasons are mostly environmental: the BP spill in the Gulf, etc. “I could go into it, but it would take a long time.”
The point is, he did something about it, and that something came around the time he decided he needed a vehicle upgrade. Walsh already knew the benefits of ethanol because of his father, who works for the state of Michigan, which encourages state employees to put E85 into their flex-fuel vehicles. So right around his 21st birthday, last June, he found the Charger and its 3.6-liter Pentastar V6 engine.
“I wanted something that didn’t have to run on gasoline,” he said. “And the first thing I wanted was an electric; I was really into the Chevy Volt. But then I realized a college student doesn’t have $40,000. Then I looked and saw that the Charger is $24,000.”
Walsh, who attends Lansing Community College, says finding an E85 station isn’t difficult. “It keeps getting easier and easier,” he says. He posts his fill-up data to his Twitter feed, @gasisoutrageous (his account name is #Number1BigHero6Fan … hey, dude has other interests besides ethanol), and he regularly gets in the twenties for mpg. Also, E85 is a lot cheaper than regular gasoline at many stations in the Lansing-Haslett area. Nationally, E85 was only $1.86 a gallon Thursday, 23.7 percent cheaper than E10, according to E85Prices.com.
Price isn’t the only benefit to buying E85. Higher ethanol blends burn more cleanly and efficiently than E10 (what most of us call regular gas). Using more alcohol fuels displaces oil, strengthening the overall U.S. economy, creating domestic jobs; reducing oil consumption is better for our air, water and health.
But the price at the pump is still a big factor, and most Americans know this. Walsh knows it, and needs it. He works at a convenience store, and says his dad has been helping him out covering the cost of payments and upkeep. The vehicle is also not exactly ideal for the brutal Michigan winters, with is rear-wheel and slick tires.
But he loves it. Using ethanol doesn’t mean you can’t enjoy your car at the same time. And that roaring engine runs great on high-octane E85.
“When I started driving, whenever I would slam on the accelerator pedal, I’d just hear dollar signs. Now I like the performance. I actually bought that car just because of the engine.”
Other posts in our “Share Your Story” series:
President Harry S. Truman once said, “A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties.” Over the past few weeks, my colleagues at Fuel Freedom Foundation and I have spoken with and read about several optimistic owners of E85 fuel stations.
Our selection wasn’t random. We focused on chains or fuel stations that apparently overcame literature-defined problems in marketing E85 and, according to their owners or senior managers, were on their way to success in securing profitable market penetration. Frankly, we wanted to find sufficient cases that testify to the fact that E85 can compete successfully with gasoline. Succinctly, we wanted to respond to a question that’s frequently asked of us, which goes something like this: “Assuming no major policy and feedstock changes (at least in the near term), can E85, in light of the current price of gasoline, provide consumers and the nation with a real competitive choice of alternative fuels that are safer, environmentally better and cheaper than gasoline?”
Future articles will provide mini case studies of some of E85 retailers. But for the present, based on many phone calls and Google descriptions, we found at least four or five stations (relatively quickly) with prices ranging from 60 cents to just over a $1 below the price of gasoline, despite the current, relatively low gas prices. The lowest price described was below $1.50 a gallon. All stations seemed committed to the continued sale of E85, and each one expressed conviction that they have sufficient price flexibility to build a vehicular fuel market able to meet cash flow and profit expectations. Their optimism was based on their present sales and future forecasts of sales.
Clearly, we need to know more. But what we heard deflated (at least partially) conventional wisdom suggesting that while a large pool of newer FFVs s and older vehicles that can be converted to FFV status exists, increased sales of E85 is unlikely because of the decline in the price of gasoline.
The E85 retailers we talked to and reviewed online appear to be using some of the following strategies to take on gasoline successfully in the market place. They are paraphrased and summarized from direct quotes for brevity:
• Loosen Ties with Brand Names: Loosening ties with major brand-name franchisers provides the ability to sell E85 and permits more flexibility to set prices based on market perceptions.
• Share Value of RINs: RINs are tradable and are valuable, particularly when their value is high. The ability to secure RINs from members of the supply chain is an incentive. Producers and blenders have a stake in retailer success; retailers have a stake in feedstock. The RINs help make the price right at the pump.
• Amend Supply Chain: By incorporating blending as a function, retailers are able to manage costs and, indeed, lower costs. By avoiding the need to contract for transferring E85 from terminal to station and doing it themselves, retailers are able to also better manage costs.
• Intuitive Marketing: Choosing an easily accessible location within which there is a high density of FFVs, along with recognition that price matters, are threshold needs to penetrate the fuel market. Smaller fuel stations often make their locational decision, in part, based on intuition and not on expensive market studies. Some might do a study…but those who did appeared to keep the costs low. They saw the possibilities in diverse locations by talking to the market and marketing folks and checking available data concerning FFVs in the area, as well as watching traffic patterns. They also had a feel for the area.
Anecdotes and small samples should not generate formulaic or prescriptive “one size fits all” market or marketing strategies. Maybe we were lucky in our calls! Maybe we were fortunate to quickly find the right articles or presentations. One of my colleagues fortuitously drove by a fuel station on his way to the airport and saw a sign touting a very low E85 cost per gallon. Clearly, economic, social, environmental, political and cultural variables are different in different areas of the country, and could very well negatively affect predictability of retail success, particularly concerning location, price and consumer acceptance. Just as clearly, supply-chain differences between and among retailers in different parts of the nation could well impede or facilitate success. What is important at this stage is to recognize that there are individuals and groups out there who own or manage fuel stations, and whose early market achievements should generate a positive bet concerning their intermediate and long-term success. Borrowing from Harry Truman, they appear, at least at first glance, to be making opportunities out of what others perceive as difficulties. If they succeed and generate copycats or variations on a theme, it will be good for the nation, its communities and consumers.
The Greeks are going broke…slowly! The Russians are bipolar with respect to Ukraine! Rudy Giuliani has asked the columnist Ann Landers (she was once a distant relative of the author) about the meaning of love! President Obama, understandably, finds more pleasure in the holes on a golf course than the deep political holes he must jump over in governing, given the absence of bipartisanship.
But there is good news! Many ethanol producers and advocacy groups, with enough love for America to encompass this past Valentine’s Day and the next (and of course, with concern for profits), have acknowledged that a vibrant, vigorous, loving market for E85 is possible, if E85 costs are at least 20 percent below E10 (regular gasoline) — a percentage necessary to accommodate the fact that E10 gas gets more mileage per gallon than E85. Consumers may soon have a choice at more than a few pumps.
In recent years, the E85 supply chain has been able to come close, in many states, to a competitive cost differential with respect to E10. Indeed, in some states, particularly states with an abundance of corn (for now, ethanol’s principal feedstock), have come close to or exceeded market-based required price differentials. Current low gas prices resulting from the decline of oil costs per barrel have thrown price comparisons between E85 and E10 through a bit of a loop. But the likelihood is that oil and gasoline prices will rise over the next year or two because of cutbacks in the rate of growth of production, tension in the Middle East, growth of consumer demand and changes in currency value. Assuming supply and demand factors follow historical patterns and government policies concerning, the use of RNS credits and blending requirements regarding ethanol are not changed significantly, E85 should become more competitive on paper at least pricewise with gasoline.
Ah! But life is not always easy for diverse ethanol fuel providers — particularly those who yearn to increase production so E85 can go head-to-head with E10 gasoline. Maybe we can help them.
Psychiatrists, sociologists and poll purveyors have not yet subjected us to their profound articles concerning the possible effect of low gas prices on consumers, particularly low-income consumers. Maybe, just maybe, a first-time, large grass-roots consumer-based group composed of citizens who love America will arise from the good vibes and better household budgets caused by lower gas prices. Maybe, just maybe, they will ask continuous questions of their congresspersons, who also love America, querying why fuel prices have to return to the old gasoline-based normal. Similarly, aided by their friendly and smart economists, maybe, just maybe, they will be able to provide data and analysis to show that if alternative lower-cost based fuels compete on an even playing field with gasoline and substitute for gasoline in increasing amounts, fuel prices at the pump will likely reflect a new lower-cost based normal favorable to consumers. It’s time to recognize that weakening the oil industry’s monopolistic conditions now governing the fuel market would go a long way toward facilitating competition and lowering prices for both gasoline and alternative fuels. It, along with some certainty concerning the future of the renewable fuels program, would also stimulate investor interest in sorely needed new fuel stations that would facilitate easier consumer access to ethanol.
Who is for an effective Open Fuel Standard Program? People who love America! It’s the American way! Competition, not greed, is good! Given the oil industry’s ability to significantly influence, if not dominate, the fuel market, it isn’t fair (and maybe even legal) for oil companies to legally require franchisees to sell only their brand of gasoline at the pump or to put onerous requirements on the franchisees should they want to add an E85 pump or even an electric charger. It is also not right (or likely legal) for an oil company and or franchisee to put an arbitrarily high price on E85 in order to drive (excuse the pun) consumers to lower priced gasoline?
Although price is the key barrier, now affecting the competition between E85 and E10, it is not the only one. In this context, ethanol’s supply chain participants, including corn growers, and (hopefully soon) natural gas providers, need to review alternate, efficient and cost-effective ways to produce, blend, distribute and sell their product. More integration, cognizant of competitive price points and consistent with present laws and regulations, including environmental laws and regulations, is important.
The ethanol industry and its supporters have done only a fair to middling job of responding to the oil folks and their supporters who claim that E15 will hurt automobile engines and E85 may negatively affect newer FFVs and older internal combustion engines converted to FFVs. Further, their marketing programs and the marketing programs of flex-fuel advocates have not focused clearly on the benefits of ethanol beyond price. Ethanol is not a perfect fuel but, on most public policy scales, it is better than gasoline. It reflects environmental, economic and security benefits, such as reduced pollutants and GHG emissions, reduced dependency on foreign oil and increased job potential. They are worth touting in a well-thought-out, comprehensive marketing initiative, without the need to use hyperbole.
America and Americans have done well when monopolistic conditions in industrial sectors have lessened or have been ended by law or practice (e.g., food, airlines, communication, etc.). If you love America, don’t leave the transportation and fuel sector to the whims and opportunity costing of the oil industry.
We might think of oil and automobiles as inextricably linked. But the earliest mass-produced vehicles were designed to run on multiple fuels, not just gasoline.
Henry Ford brought us the original mass-market flex-fuel vehicle. That fact made him one of the biggest stars of the Fuel Freedom-produced documentary PUMP the Movie, which is available on Netflix and DVD.
Ford’s Model T, introduced in 1908, could run just as well on alcohol fuels as on traditional gasoline. The driver could easily switch from one fuel to the other simply by turning a brass knob to the right of the steering column. This turned a screw in the carburetor, allowing either more or less fuel to enter the engine and mix with air. Alcohol fuel doesn’t contain as much energy as gasoline, so more of it needs to be injected to run the engine as well.
As David Blume, another PUMP star, shows in this video, drivers needed to switch between fuels because they wouldn’t know which fuel source would be available when they were out on a drive.
Ford grew up on a farm in Michigan and always held farms, and farmers, dear to his heart. As historian Bill Kovarik’s fascinating study of Ford’s alcohol-fuel dedication shows, he clearly wanted to help cash-strapped farmers get into new markets by promoting agricultural products as fuel sources — not only corn, but anything else that could be fermented.
In 1919, Ford told The Christian Science Monitor (according to this New York Times account): “The fuel of the future is going to come from fruit like that sumach [a flowering plant] out by the road, or from apples, weeds, sawdust — almost anything.”
The movement to run vehicles on ethyl alcohol, or ethanol, was dealt a severe blow by the passage of the 18th Amendment to the Constitution, known as Prohibition, which banned the “manufacture, sale or transportation of intoxicating liquors,” even alcohol (ethanol is also known as grain alcohol, or “moonshine”) used as a fuel. Prohibition was repealed in 1933, and by then the ethanol market was severely weakened in America. Read Bill Ganzel’s truth-stranger-than-fiction account of what happened next, when the U.S. became convinced that leaded gasoline was the best way to raise gasoline octane levels.
But ethanol has staged an epic comeback: More than 13 billion gallons was used in 2013, according to the Renewable Fuels Association. That figure could reach 36 billion gallons by 2022 if the federal government continues to mandate blending an increasing amount of ethanol into the nation’s gas supply, under the Renewable Fuel Standard guidelines.
Make your voice heard: Sign Fuel Freedom’s petition urging major independent fueling retailers like Costco and Walmart to offer ethanol as an option for their customers.
Because unlike back in the day, you don’t even need a knob to make the switch to ethanol.
