ethanolretailerNACS

NEWWEB SITEANSWERSETHANOLQUESTIONSPAGE 6

Ethanolmakes a splash at the National Associationof Convenience Stores Show

the business of going green

ETHANOLSEASONALBLENDSCHARTPAGE 18

IT’S TIMETO TELLMOTORISTSWHERETHEIR GASCOMESFROMPAGE 4

Winter 2009

REPORT

GrowthEnergy.org

THE ENERGY FOR NEWPROFITS IS GROWING.

JOIN GROWTH ENERGY AS AN ETHANOL RETAILER MEMBER AND

GET TECHNICAL AND FINANCIAL SUPPORT TO HELP YOUR BUSINESS GROW.

With more than 25 years of industry experience,

the Growth Energy market development team

can help you grow your business with blender

pumps. We’ll give you direct assistance through

every step of installing ethanol pump equipment.

You’re not just helping America become more

energy secure – you’re developing a new profit

center for your future. Learn more by calling

Growth Energy Market Development today

at 1-877-485-8595.

WINTER 2009 3

STARTERS A new website answers your questions aboutselling ethanol • Growth Energy publishes a 2010flexible fuels vehicle guide • Illinois celebrates 200thE85 station • Missouri Corn Merchandising Counciland Growth Energy offer blender pump assistance •ND retailers can received up to $40,000 in blenderpump assistance.

FIRST PERSON A farmer’s coop in Hutchinson, Kan.,attracts new local business by being the first in thecounty to install ethanol blender pumps.

GOVERNMENT UPDATE Growth Energy promoteslegislation to increase the availability of flexible fuelvehicles and label gasoline’s country of origin.

FROM THE PUBLISHER Growth Energy CEO Tom Buissays it’s time to tell Americans where their gasolinecomes from — and where their money is going.

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NACS REPORTEthanol was a hot topic at the National Associationof Convenience Stores annual gathering.By Joanna Schroeder

CoverFeature 12

publishing teamGrowth Energywww.GrowthEnergy.org402-932-0567

publisherTom Buistbuis@GrowthEnergy.orgwww.GrowthEnergy.org/retailer402-932-0567

editorialPaul Nolaneditor@ethanolretailermag.com763-205-1745

editorialcontributorsAnne Steckel,Director of GovernmentAffairs, Growth Energy

Joanna Schroeder

contact usEthanol Retailer encouragesthe submission of articles,photos, press releases andindustry-related news.All correspondencebecomes the propertyof Ethanol Retailer.

E-mail materials towww.ethanolretailer.com.

Growth Energy is a proactive groupcommitted to the promise ofagriculture and growing America’seconomy through cleaner, greenerenergy. Through smart policyreform and a proactive grassrootscampaign, Growth Energy promotesreducing greenhouse gas emissions,expanding the use of ethanol ingasoline, decreasing our dependenceon foreign oil, and creating Americanjobs at home.

Growth Energy Market Development3216 Emerald Lane, Suite CJefferson City, MO 65109877-485-8595

Ethanol Retailer is published fourtimes a year in partnership withMach1 Business Media, LLCPO Box 24727020 Noble RoadExcelsior, MN 55331952-401-1283

©2009 Growth Energy. All rightsreserved. The “e” mark and “stylizede” are registered service marks.Contents of this magazine may not bereproduced without consent of thecopyright owner.

Volume 2, Number 4

SEASONAL BLENDS CHART Retailers must adjust theblend of E85 they sell to match the season. This state-by-state chart will help them get it right.

6

CONVERSION REMINDER Are you ready to convertto ethanol? Don’t forget to clean the tank.

WINTER 20094

alk through anysupermarket ordepartment storein the UnitedStates and justabout everything

available for purchase — from T-shirts totuna to tomatoes — each has a labelsomewhere telling you that item’scountry of origin. It’s called country oforigin labeling (or COOL for short), andfederal law requires it on meat, fish,fruit, vegetables, electronics, clothing,automobiles — the most common itemsbought in the country.

Here at Growth Energy, we believe itis time to apply labeling standards togasoline. We believe the big petroleumcompanies should start telling consumersand retailers the country of origin forautomobile fuel. We believe it’s time toinform consumers about one of the mostcommon transactions in the country:fueling up our cars, trucks and tractors.

You can find out more about ourCOOL campaign at www.labelmyfuel.com.I encourage you to visit the website andto send the link to others.

The attacks on our plan come from theusual suspects: the big oil companies thatwill do anything, say anything and spendanything to protect their 90 percent

it’s time to tell americans where their gasoline comes from—andwhere their money is going.

monopoly on automotive fuel. The fact is,it is simpler to implement than opponentsof COOL for fuel would have you believe.

Why does Big Oil oppose country oforigin labeling? Because they know itcould lead to more informed consumerswho will choose to use ethanol — theonly existing renewable alternative togasoline we have — as their fuel.

There are hidden costs to America’sdependence on foreign oil — $50 billiona year from the U.S. Treasury to protectoil shipping routes, and as much as $500billion a year in a massive transfer ofwealth out of the U.S. economy toforeign states.

Greater demand for ethanol couldspark enormous job creation in the U.S.,as Growth Energy Co-chairman Gen.Wesley Clark explained when hepresented Growth Energy’s “Roadmap toa Greener America” last summer.Raising the national ethanol blend to E15would help create 800,000 new jobs by2020. Cutting-edge manufacturingpractices reduce greenhouse gasemissions, so today’s ethanol produces59 percent fewer greenhouse gasemissions compared to gasoline. Andethanol will only get greener as gasolinefrom petroleum gets dirtier.

The domestic renewable fuelsindustry — led by ethanol — is seeking todo more for our country. But we needfederal policy to open the market, buildout the infrastructure to deliver ethanolto more markets, and encourage theproduction of more flexible fuel vehicles.

At Growth Energy, we are committedto doing more to make ethanol a part ofeveryday life for American families.Please look for more updates here and inthe Legislative Report column of EthanolRetailer for more information. Thanksfor your support.

from the publisher

by tom buis

ethanolretailer

W

Why does Big Oil oppose countryof origin labeling? Because they knowit could lead to more informed consumerswho will choose to use ethanol — the onlyexisting renewable alternative to gasolinewe have — as their fuel.

CEO, Growth Energy

tellingIt likeit is

readytoconvert toethanol?don’t forget to clean the tank.

etailers who are preparing to convert to ethanol-blended fuels shouldbe reminded that it’s important to clean their storage tanks prior toadding fuel enhanced by ethanol. Ethanol absorbs water and sinks to thebottom of the tank. From there, the two substances separate, known asphase separation.

According to Chuck Pedano, Vice President of Development atCrompco, based in Plymouth Meeting, Pa., phase separation begins with as little as.5 (one-half of 1%) of water content that equates to only 40 gallons of water in every8,000 gallons worth of product. “The result of phase separation,” explained Pedano,“is complete contamination and an useable product.”

Sounds scary. But all is not lost if this occurs. Crompco and other companies canreclaim separated product via a specialized product polishing process. “We can remove the ethanol and waterand bring the product back to a usable state,” says Pedano. “Through independent pre-recovery and post-recoverysampling, we provide a product lab analysis for a final determination of how the customer can use that productonce it’s been polished.”

The lab analysis outlines the percentage of ethanol, water content and octane. This information is given to thecustomer and, based on the results, Crompco works with the retailer to create a reuse product plan. “To avoidthe issues caused by dirty tanks, tank cleaning should be an integral part of every service station’s preventativemaintenance program,” said Pedano.

There is no legislation mandating the cleaning of tanks when preparing to blend in ethanol. It’s just good businesssense. “As we progress into an era where alternative fuels become commonplace, preventative maintenance,cleaning and testing of tanks and systems will become the rule rather than the exception,” said Pedano.

Do you have questions? Contact Growth Energy’s Market Development team at 877-485-8595.

R

THESECOMPANIESOFFER TANKCLEANINGSERVICES:

Crompco

www.crompco.com610-276-5907

U.S. Tank Alliance

www.ustankalliance.com614-923-0154

Tanknology

www.tanknology.com800-964-0010

Cleans Fuels Technology

www.wecleantanks.com386-266-8100

WINTER 2009 5

conversion reminder

ethanolretailer

WINTER 20096

starters

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n this economy, every business decision demands careful scrutiny of return on investment (ROI).Growth Energy is launching EthanolRetailer.com, a newWeb site for fuel retailers, to help clarify thesmart business reasons for installing ethanol blender pumps.The site demonstrates how installing an ethanol blender pump makes sense for petroleum retailers.

It reviews through the steps necessary to offer higher blends of ethanol to customers, explains thefinancial incentives that are available to retailers, and provides resources to help make the project

both easy and efficient.There is a lot of misinformation about ethanol and its production, both online and in traditional news

outlets. EthanoRetailer.com provides retailers with accurate information about America’s only renewablefuel, which they can in turn pass along to customers who have questions about mid-level to high levelethanol blends.Visitors will find a comprehensive list of answers to frequently asked questions, as well as the latest

news regarding ethanol and blender pumps. Visitors also will find resources to turn to for moreinformation, including contact information for marketing representatives at Growth Energy who areeager to help you complete your blender pump installation project.Packed with research, case studies and links to additional information, the site is designed to be a one-

stop resource on ethanol and ethanol blender pumps. Find out why retailers around the country aremaking the important decision to offer customers a choice of mid-level and high blends of ethanol byvisiting www.EthanolRetailer.com.

growth energy launches comprehensiveethanol web site for fuel retailers

Detailed information on the return on investment for installingethanol blender pumps, as well as resources for making the

project easier, is available at www.EthanolRetailer.com.

Frequently asked questions about offeringethanol at retail fuel stations are answered at

www.EthanolRetailer.com.

I

WINTER 2009 7

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Illinois Gov. Pat Quinn joined with corn growers, business leadersand representatives of the American Lung Association in Illinois tocelebrate the state’s 200th E85 station at the Green Mount Motomartin Shiloh.

“It’s vitally important that we continue to bring E85 stations to allparts of Illinois,” Quinn said. “E85 saves money when you fill up yourtank, supports Illinois agriculture and jobs, and keeps our air clean.”

There are more than 8 million flexible fuel vehicles registered inthe U.S., including more than 300,000 in Illinois. These vehicles emiton average 40 percent fewer greenhouse gases annually.

Illinois is also one of the largest producers of ethanol in thecountry. In 2008, more than 500 million bushels of Illinois corn wereused to make 1.4 billion gallons of biofuel.

illinoiscelebrates200thE85station

The 2010 Flexible FuelVehicle (FFV) PurchasingGuide is now availablethrough Growth Energy.The 16-page, full-colorguide contains detailedinformation regardingwhich vehicles are offeredto run high-level blends ofethanol by automobilemanufacturers.

The FFV PurchasingGuide has been publishedsince 2003, offeringfrequently askedquestions regarding high-level blends of ethanoland the availability ofFFVs. This issue providesall the latest informationabout 2010 Chrysler, Ford,General Motors, Nissan,Mercedes-Benz and Toyotatrucks and cars with E85compatible engines.

The FFV PurchasingGuides are available inbulk for giveaway items attrade shows or blenderpump/E85 station grand-opening events. They canbeorderedonlineatwww.EthanolRetailer.com.

Growth Energypublishes 2010flexible fuelvehicle guide

In celebratingthe state’s 200thE85 station,Gov. Pat Quinnstressed theimportance ofethanol toIllinois’ economy.

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The Missouri Corn Merchandising Council has partnered with GrowthEnergy to bring more blender pumps to Missouri.

“Our goal in Missouri, working in conjunction with Growth Energy’sblender pump program, is to install 50 blender pumps in the state in thenext 24 months,” said Gary Clark, Missouri Corn Senior Director ofMarket Development.

“We’re finding through consumer feedback and research that E20 andE30 hit the mark in best performance,” says Clark. Therefore, he says, ablender pump that offers E10, E20, E30 and E85 are projected to be themost successful.

The Missouri Corn Merchandising Council is currently involved in a pilot programalongside state regulators. The Missouri Department of Agriculture’s Weights and MeasuresDivision will monitor four to six blender pumps for 90 to 180 days to ensure the pumps aredispensing blends correctly. Once the pilot program is complete, the blender pump programwill move full steam ahead.

According to Clark, the program also offers grant dollars, which are a combination of stateand federal incentives coupled with money from Missouri Corn Merchandising Council andGrowth Energy. While the federal tax credits of up to $50,000 only apply to the installation ofan E85 pump, a retailer can still receive one-fourth of the cost of the pump if the highestethanol blend is E85. In addition, anystorage and plumbing, or basically anycomponent that brings the ethanol tothe pump, qualifies for the tax credit.The state of Missouri has a similar taxcredit, with marketers qualifying for upto $20,000 for infrastructureinstallations.

The partnership not only assistsretailers with installation, but also offerspromotional assistance. Every retailerwho engages in promotional activities,such as a station opening, has theopportunity to receive matching dollars.

The Missouri Corn Merchandising Council is committed to increasing the sales of higherethanol blends in the state and has a full-time staff person dedicated to assisting retailers.Besides financial assistance, the partnership with Growth Energy offers, retailers help withmarketing, point of sale, promotions, motorist outreach materials, media outreach, andadvocacy assistance.

To learn more about the blender pump program, contact Growth Energy MarketDevelopment at 877-485-8595.

MISSOURI CORNMERCHANDISINGCOUNCIL AND GROWTH ENERGY OFFERBLENDER PUMP ASSISTANCE

“Our goal in Missouri,working in conjunction withGrowth Energy’s blenderpump program, is to install50 blender pumps in the statein the next 24 months.”

starters

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Phase SeparationDetection & Water Sensing

& Particulate Removing

Water Sensing &Particulate Removing

Phase SeparationDetection “Alert”

& Particulate Removing

Particulate Removing Only

www.champlabs.com©2009 Champion Laboratories, Inc.

Your Clear Choice…

Choosing is as easy as…

The State of North Dakota haslaunched a program that willmake $2 million in grants availablefor fuel station owners who installethanol blender pumps. The state’sDepartment of Commerce BiofuelsBlender Pump Incentive Programwill provide grants up to $5,000per blender pump and $40,000per retail service station.Service station owners, through

a mix of grants and incentives,will be able to purchase andinstall the blender pumps, whichcost $20,000 or more, for lessthan $2,500, said Kent Satrang,CEO of Petro Serve USA, a supplierof ethanol to North Dakota andneighboring states.“We’re excited about this

NORTH DAKOTA BLENDER PUMPPROGRAMOFFERS RETAILERS $40,000IN REIMBURSEMENTS

initiative because it’s a win forconsumers, farmers, retailers andethanol producers,” said Gov.John Hoeven.The North Dakota Corn

Growers Association and CornUtilization Council have allocated$500,000 to provide $2,500 perpump. The remaining incentivesinclude federal tax credits andethanol industry incentives.“The idea here was to partner

the abundant corn fields of ruralNorth Dakota with the massiveBakken oil fields of western NorthDakota,” Satrang said. One goal isto raise ethanol volumes byreplacing old gas pumps withinnovative biotech blenderpumps, he added.

North Dakota ethanolproducers hope the new pumpswill keep more of the green fuelin the state, since it costs 15 to25 cents per gallon to ship itout-of-state.Funds can only be used for

dispenser and associatedhardware. No funds will be usedfor storage tanks, above orbelow ground, or any otherinfrastructure from the tank tothe pump. Funds will beprovided to grantees on areimbursement basis withproper supportingdocumentation.Growth Energy is working

with the North Dakota CornGrowers Association to bringmore blender pumps to thestate. For more information,contact Growth Energy MarketDevelopment at 877-485-8595.

Gov. JohnHoeven

WINTER 200910

first person

aa ffaarrmmeerr’’ss ccoooopp iinn hhuuttcchhiinnssoonn,, kkaann..,,aattttrraaccttss nneeww llooccaall bbuussiinneessss bbyy bbeeiinnggtthhee ffiirrsstt iinn tthhee ccoouunnttyy ttoo iinnssttaalllleetthhaannooll bblleennddeerr ppuummppss..

It didn’t require a lot of persuasion to convince the boardof directors of the Farmer’s Coop that serves Hutchinson,Kan., to install ethanol blender pumps early this year.The coop’s PetroleumManager Gordon Roth says the

board was looking to take the lead in promoting increaseduse of E85 in Hutchinson and neighboring towns since noother retailer in Reno County offered anything above E10.Plans originally called for an E85 pump at the coop’s

Cenex station on Fourth Street in Hutchinson — one ofthree that the coop operates — but then Roth read aboutblender pumps and the flexibility to offer mid-level blendsand it seemed like a no-brainer, he says.

ur farmer’s coopserves Hutchinsonand the surroundingtowns of Nickerson,Partridge andWhiteside. We have

three fuel stations. The one inHutchinson is our biggest and busiest.

We wanted to do something in ourcommunity to promote increased use ofethanol. E85 had not taken hold in anyof the chain retailers in Reno County,which is the second-largest county inthe state.

gordon rothpetroleum managerfarmer’s coophutchinson, kan.

O unleaded to E15. This just seemed likethe coming thing.

MeetingANeedA lot of farmers in the area wanted touse higher blends of ethanol. After weheard that several other coops in thestate had put blender pumps in, weapproved our plan for the Hutchinsonstore. It was only about 90 daysbetween the time we approved the planand when the pump went online inmid-January. I think we became theninth blender pump in the state.

Original plans called for an E85dispenser, but when I began to researchpricing and what we needed to do withhelp from Double Check, a petroleumequipment, service and trainingcompany out of Kansas City, Mo.,I read more and more about ethanolblender pumps.

It didn’t take a lot of convincing thata blender pump would be a better wayto go. We knew the EPA(Environmental Protection Agency)might soon allow an increase in theamount of ethanol blended in regular

A LESSON IN HOWNOT TO BLEND IN

by gordon roth

WINTER 2009 11

My storage tanks are all aboveground, so I just added another one forpure ethanol and we ordered twoEncore 500 dispensers from Gilbarco.We now offer customers a choice ofE10, E20, E30 and E85.

I was nervous going into the projectabout how much paperwork andred tape there was going to be, buteverything went really smoothly.A lot of things just took care ofthemselves. The Kansas Corn GrowersAssociation provided financialassistance and Growth Energy helped

E85 because it’s cheaper than racingfuel, which goes for about $7 per gallon.They say they get the same power andperformance with E85.

We sell about 3,100 gallons of E85 permonth now. By analyzing credit cardreceipts, I can tell the bulk of those whopurchase ethanol are locals. The goodnews is I’m pulling people off of thehighway that didn’t used to do businesswith me. Attracting new customers wasone of the reasons we installed thepumps in the first place, so that’s beenfun to watch.

From left to right: Chamberof Commerce ambassadorsDarrenWicks, BarbaraNickels, Nita Grandstaff andMax Bookless; HutchinsonFarmer’s Coop officialsGordon Roth and Joe Schauf;and Chamber of Commerceambassadors Chuck Carson,Herchel Crainer and RudyRodriguez.

us get over the few speed bumps thatwe did encounter.

Our blender pumps went online Jan.16. It wasn’t automatic that peoplewould use the higher blends. In fact, ittook a while for the word to get out.We did some marketing through areacar dealers that sell flexible fuelvehicles. We also received some localmedia coverage and held an openhouse, which helped response pickup dramatically.

I’ve received positive feedback fromlocal stock racecar drivers, who buy

WINTER 200912

cover story

Retailers give and take information aboutincreased use of renewable fuels

at the convenience store industry’slargest trade show.

by joanna schroeder

Ethanol Stands Tall at

FALL 2009 13

thanol was on the minds ofmany of the 21,000 retailers,distributors, jobbers andequipment manufacturerswho came to Las Vegas Oct.21-23, for the National

Association of Convenience Stores(NACS) and Petroleum EquipmentIndustry (PEI) show, the largest tradeconvention dedicated to the ownersof convenience stores.

Today, the more than 146,000convenience stores throughout theU.S. collectively sold more than $577.4billion with $408.9 billion in motorfuel sales with a growing number offuel sales going to biofuels such asethanol. According to Proexporter, inthe last 12 months, ethanol sales were$10.352 billion. Attendees heardlegislative updates regarding ethanol,were told why blending ethanol

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WINTER 200914

through blender technologies willincrease profits and saw the blendertechnology firsthand.On a legislative front, Congress is

considering the passage of theWaxman-Markey Climate Bill andthe Senate is considering the KerryBoxer Bill, pieces of legislation saidNACS, that could be detrimental tothe petroleum industry. Theultimate goal of both bills are toreduce CO2 emissions throughwhat is called “cap and trade”.Should either bill be enacted,

gas prices will go up at the pumpand will hurt retailers’ already razorthin margins. However, this isalso an opportunity for retailers tobegin blending ethanol, which hashigher profit margins and lowerCO2 emissions.“Cap and Trade is trying to

eliminate liquid transportationfuels,” John Eichberger, VicePresident of Government Relationsfor NACS, told attendees of

a session entitled, “InsideWashington: Legislation, Regulationand Angst of Petroleum Retailing”.But is it? On the surface it

appears to be contradictory toRFS2, which mandates 36 billiongallons of biofuels by 2022. But ifthe U.S. is truly committed to thisgoal, then it must increase the blendwall and build the infrastructure.Earlier this year, several

organizations, led by GrowthEnergy, submitted a Green JobsWaiver that would allow theminimum blend of ethanol to beincreased up to 15 percent.Underwriters Laboratory (UL)has given its approval on all currentdispensing equipment for up toten percent ethanol. A dispenseris expected to be certified up to25 percent ethanol by the end of2009. Still, there are concernsamong retailers should this waiverbe approved.Eichberger said the industry must

any gas station owners are preparing forthe future by installing ethanol blenderpumps and offering mid-level to highlevel ethanol blends. This movement hasbeen driven, in part, by two factors:compliance with RFS2, which mandatesthe use of 36 billion gallons of biofuels

by 2022, and the potential for increased profits.Ethanol blender pumps are designed to use technology that has

existed for several decades in a new way. Similar pumps were firstused to blend unleaded gasoline and premium gasoline intoa mid-grade product. Ethanol blender pumps draw from twounderground storage tanks, one filled with straight unleaded orE10 and the second one filled with E85. The fuel dispensers areprogrammed to blend the appropriate percentages of the twofuels to create the desired blend of ethanol. The most commonblends are E20, E30, E40, E50 and E85.

More than a decade ago, the Environmental Protection Agency(EPA) required gas stations to upgrade underground storage tanks tomeet new standards. As a result,most stations in the U.S. are ethanol-ready in terms of their storage tanks, but not their dispensers.

During NACS, we spoke with representatives of the three

manufacturers that sell ethanol blender pumps: Bennett Pump Co.,DresserWayne and Gilbarco Veeder-Root.

Scott Negley, Director of Alternative Energy Products for DresserWayne, told Ethanol Retailer, “There is a lot of interest fromsignificant retailers that is driven, in part, by their need to complywith RFS2. I know a number of retailers and oil companies that aredoing everything they can to comply with that rule.”

Ethanol blender pumps cost $20,000 to $24,000, a 40 percentpremium over a regular fuel dispenser. The extra cost coversstainless-steel piping and nickel-plated metals capable of resistingthe corrosive nature of E85. All rubber components and seals havealso been updated for the same reason. In addition, the costs coverall custom branding of the dispenser as well as the new PCIcompliant credit card technology.

Jamie Collier, Vice President of Sales for Bennett Pump Co., said hiscompany has been manufacturing and distributing blender pumpsin Brazil for more than five years and in the U.S. for more than a year.Not only do they manufacture their own pumps, but they alsosupply 30 other manufacturers around the world with parts.

The company’s Pacific line is their primary mid-level ethanolproduct that can dispense up to four different blends, but Bennettoffers a variety of other products that dispense ethanol as well,

The Latest and Greatest Blender Pumps

WINTER 2009 15

others want one certification fordispensers up to E85. Congress alsowants certification for E85 and haspressured UL for approval.Growth Energy is optimistic that there

will be an UL certified dispenser soon.A hose-and-nozzle system (the so-calledhanging hardware) has been submittedto UL for certification and the dispenseritself has been certified. Phil Lampert,Vice President of Market Developmentfor Growth Energy, expects the entiresystem to be certified by the secondquarter of 2010. “Growth Energy hasbeen instrumental in helping to pay forthis process and really take mid-level andhigh blends of ethanol to the next step,”he said.More than 125 retailers have taken a

competitive risk and already installedblender pumps. There also are more than2,000 E85 pumps nationwide. Mostretailers who have installed blenderpumps have reported increased sales andprofits. In addition, all the manufacturersof blender pump technology, including

Dresser Wayne, Gilbarco Veeder-Rootand Bennett Pump Co., warranty theirproducts. Once UL certification iscomplete, the hope is that for those earlyadopters, there will be a separate state-by-state certification process for legacyinstalled equipment.“It’s important to note that retailers

have been selling liquid hydrocarbonfuels for 110 years. The only growingliquid fuel is ethanol,” said Lampert. “It’sthe only form of liquid fuel that has theopportunity to grow, and we want themto see that it’s the new profit center.We’re trying to find the entrepreneursthat aren’t risk-adverse but looking fora new profit center. They should considerputting a blender pump in their store.”

Presidential RemarksIn his keynote address at the NACSshow, former President Bill Clintonemphasized the urgency to act. “Climatechange is real,” he said. “We (America)have got to change how we create andexchange energy.”Clinton noted that the UK, Germany,

Denmark and Sweden are the only fourcountries to exceed their climate goals.Why? These countries outperformed theU.S. because they created new jobs whenthey changed how they created anddelivered energy. And the biggest driverof this change was biofuels.Clinton made it clear that, as the

U.S. economy attempts to emerge froma recession, the volatility in oil pricesmay cause the country to take a stepbackwards. He predicted the price of oilwill return to $100 per barrel. (Oil priceshit a high for 2009 of $80 per barrelduring the show week and continue tohover around this price.) This is aconcern for retailers because it lowerstheir profit margins.Clinton ended his speech on a

positive note, stating that while theU.S. has tremendous challenges aheadhe remains, “widely optimistic aboutthe future.”Retailers also ended the conference on

a note of optimism: their industry is oneof the few that increased jobs and profits,in 2009.

pass a labeling standard and liabilityclause because, “We should never be heldresponsible for consumer stupidity.”Dan Gilligan, President of the

PetroleumMarketers Association ofAmerica (PMAA), followed his commentby saying, “We’re trying to get themessage across to Congress that we’renot anti-ethanol. We’re not anti-biodiesel. We’re supportive of any fuelthat gives our members margins.We’re in the business of selling liquidfuels. We’re against moving to a fuelthat’s not ready.”Eichberger added, “We’re not against

renewable fuels, but if we’re going to doit, let’s do it the right way.”

Blenders or BustThe right way is blender pumps. To date,there is not full certification for thesystem (E85). UL certification has beena point of contention for both the retailand ethanol industry. According toEichenberger, UL wants a certifieddispenser for multiple blends. NACS and

and they warranty everything but the hanging hardware.Gilbarco Veeder-Root’s product also is manufactured to handle mid-level

ethanol blends. According to Marketing Manager Chad Johnson, Gilbarco’scustomizable 3 plus 1 product can blend up to E85 and features a flex fuelupgrade that protects the hydraulic components from the effects of theethanol. Gilbarco Veeder-Root also provides a warranty for its dispensers(except for the handing hardware) and their payment system also meets thenew regulations.A slight difference to their dispenser, however, is that they have an optional

colored screen that uses the applause system.“This screen can be used toeducate the consumer about the fuel,” said Johnson.In addition, the retailer can differentiate their blends in 5 percent increments

and their dispensers can handle up to five grades. This is beneficial to a retailerwho wants to change the blends based on market conditions.DresserWayne’s specialty line is known as the Eco-fuels blender series.

Negley notes that a blender pump is, “ready for anything that comes downthe market,” such as E15. Their Eco-fuels blenders not only blend ethanol in 1%increments but can also blend biodiesel. In addition, they now offer a dual hoseblender which is a flexible 3+2 configuration. This keeps a retailer ahead of thegame in states where two hoses are required — one for low blend ethanol (E10)and one for higher ethanol blends.Negley stressed that the price of the dispensers will decrease as demand

rises and production costs come down.

WINTER 200916

he Growth Energy teamcontinues to work withelected lawmakers topromote legislative initiativesthat will result in increaseduse of ethanol and decrease

the country’s dependence on foreign oil.In the Senate, we have a great

opportunity to increase the numberof flexible fuel vehicles (FFVs) on theroad, as well as build out the nationalinfrastructure to deliver mid-levelblend ethanol to consumers, withlegislation introduced by Sens. TomHarkin of Iowa and RichardLugar of Indiana.The Consumer Fuels and

Vehicles Choice Act wasendorsed last month byGrowth Energy. The Harkin-Lugar bill is a significant movetoward creating green jobs andcutting greenhouse gasemissions by giving Americanconsumers greater access tohometown renewable fuels,like low-carbon ethanol, as analternative to gasoline refinedfrom foreign oil.Brazil has become 100-percent

energy independent by increasingproduction of flexible fuel vehicles(FFVs) and giving drivers a choice ofethanol blends at filling stations.President Obama acknowledged Brazil’ssuccess when he recently said that ifBrazil can do it, there’s no reasonAmerica can’t.The Consumer Fuels and Vehicles

Choice Act of 2009 calls for:• Fifty percent of all automobilesmanufactured for sale in the United

T

leveraginglawmakers’support tomoveethanolinitiativesforwardgrowth energy promotes legislation to increase theavailability of flexible fuel vehicles and label gasoline’scountry of origin.

States to be FFV-capable by 2011.• Ninety percent of all automobilesmanufactured for U.S. sale to be FFV-capable by 2013.

• More blender pumps at retail fuelingstations capable of dispensingblends of fuel that contain anywherefrom 0 percent ethanol to 85percent ethanol.

• Authorizing grants of up to 50percent of the cost for installingblender pumps and tanks and otherinfrastructure needed for sellingthese fuel blends.

Growth Energy is also workingwith lawmakers in both the House andthe Senate to draft legislation tomandate country of origin labeling(COOL) for gasoline. More informationon that campaign can be found atwww.labelmyfuel.com. It mirrorssuccessful efforts to label dozensof other consumer products withcountry of origin, including meat,fish, vegetables, fruit and even carsand electronics.Growth Energy views labeling as

a way to inform the public about theramifications of pumping gasoline

government update

by anne steckel

Director ofGovernment Affairs

ethanolretailer

Growth Energy viewscountry of origin labeling asa way to inform the publicabout the ramifications ofpumping gasoline refined fromforeign oil. For every dollar spenton foreign petroleum, another$1.55 leaves the U.S.

WINTER 2009 17

from foreign oil. For every dollarspent on foreign petroleum,another $1.55 leaves the U.S.economy in a massive transfer ofwealth that costs as much as $500billion a year. Ethanol is the onlydomestic, renewable fuel that is alow-carbon alternative to gasoline— and it creates green-collar jobshere in the United States.

Meanwhile, the GrowthEnergy legislative team hopes toeducate lawmakers who appearintent on erecting obstacles toethanol. For example, abipartisan group of senators, ledby Republican Sen. Susan Collinsof Maine, introduced a bill that

ethanolretailer

would demand greater regulatoryhurdles for increased ethanolproduction. In that case, GrowthEnergy has written Collins askingfor an opportunity to meet withher and explain the advantages ofethanol — and clear up anymisconceptions about how mid-level ethanol blends would bemarketed to the public.

Finally, Growth Energy’sgovernment relations teamwelcomed a new chairman to theSenate Agriculture Committee:Sen. Blanche Lincoln ofArkansas. Lincoln assumed thetop job on the agriculture panelwhen Sen. Tom Harkin of Iowa

moved over to become chairmanof the Senate Health, Education,Labor and Pensions Committee.

We wish to thank SenatorHarkin for his long record as achampion of both ethanol andthe farm economy; we know wewill continue to haveopportunities to work with him inthe months and years ahead. Welook forward to working withChairman Lincoln on thechallenges and opportunities toreduce our dependence on foreignoil, create green jobs in America,improve our environment, andprovide economic opportunityin rural America.

Growth Energy is working with the Obama administration to adopt a technicalcorrection to the federal income tax credit for retailers who install an ethanolblender pump. The proposed correction would allow retailers to utilize the federaltax credit based on the entire cost of a new alternative fuel dispensing systemrather than the current wording, which allows the tax credit to only be taken onthe incremental cost of only the alternative fuel portion of the new pump.

The Internal Revenue Service currently allows a retailer to recapture up to$50,000 or 50 percent of the total cost of installing an alternative fuel dispensingsystem such as a blender pump.

The new wording would accomplish the intentof the original bill, which was misinterpreted by the IRS, said Phil Lampert, VicePresident of Market Development for Growth Energy. Ironically, the primarysponsor of the original bill in 2005 was first-term Illinois Sen. Barack Obama.

“Rather than allowing a retailer to take 50 percent of the total cost ofinstallation of new dispenser used to sell E85, the IRS only allows a retailer a taxcredit on the incremental cost of the E85 portion of the new dispenser. Thismarginalizes the value of the credit, and few if any retailers take advantage ofit,” Lampert said.

It stands to reason that a larger tax credit would encourage more retailersto install ethanol blender pumps. For updates on this tax credit or any otherinformation regarding installing ethanol blender pumps, call Growth EnergyMarket Development at 877-485-8595.

Growth Energy Pushes for Approvalof Technical Correction to Alternative FuelInfrastructure Tax Credit

WINTER 200918

ethanolretailer geographicethanol/fuelblendguide

Volatility Class by MonthJan Feb Mar April May June July Aug Sept Oct Nov Dec

AlabamaAlaskaSouthern RegionSouthMainland

ArizonaNorth of 34˚ lat.& E.of 111˚ long.Remainder south of 34˚

ArkansasCaliforniaNorth CoastSouth CoastSoutheastInterior

ColoradoEast of 105˚ longitudeWest of 105˚ longitude

ConnecticutDelawareDistrict of ColumbiaFloridaNorth of 29˚ latitudeSouth of 29˚ latitude

GeorgiaHawaiiIdahoIllinoisNorth of 40˚ latitudeSouth of 40˚ latitude

IndianaIowaKansasKentuckyLouisiana

State and Fuel Marketing Region2 2 2 2 2/1 1 1 1 1 1/2 2 2

3 3 3 3 3/2 2/1 1 1/2 2/3 3 3 33 3 3 3 3/2 2/1 1/2 2 2/3 3 3 3

3 3 3 3/2 2 2/1 1 1 1/2 2/3 3 32 2 2 2/1 1 1 1 1 1 1/2 2 23 3 3/2 2/1 1 1 1 1 1/2 2 2/3 3

2 2 2 2 2 2/1 1 1 1 1/2 2 22 2 2 2 2/1 1 1 1 1 1/2 2 23 3/2 2 2 2/1 1 1 1 1/2 2 2/3 32 2 2 2 2 2/1 1 1 1 1/2 2 2

3 3 3 3/2 2 2/1 1 1 1/2 2/3 3 33 3 3 3 3/2 2 2/1 1/2 2/3 3 3 33 3 3 3/2 2 2/1 1 1 1/2 2 2/3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 3

2 2 2 2/1 1 1 1 1 1 1/2 2 22 2/1 1 1 1 1 1 1 1 1 1/2 23 3/2 2 2/1 1 1 1 1 1 1/2 2 2/31 1 1 1 1 1 1 1 1 1 1 13 3 3 3/2 2 2 2/1 1/2 2 2/3 3 3

3 3 3 3/2 2 2/1 1 1 1/2 2/3 3 33 3 3 3/2 2/1 1 1 1 1/2 2/3 3 33 3 3 3/2 2/1 1 1 1 1/2 2/3 3 33 3 3 3/2 2 2/1 1 1 1/2 2/3 3 33 3 3 3/2 2 2/1 1 1 1/2 2/3 3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 32 2 2 2/1 1 1 1 1 1 1/2 2 2

ooler temperaturesrequire ethanolblenders to adjust theamount of ethanoland hydrocarbons(gasoline) in theirproduct to improve

the vehicle cold-start and warm-upperformance. The amount of ethanolblend depends on the geographicalregion and the season.

ASTM 5798-07 “Fuel Ethanol(Ed75-Ed85) for Automotive Spark-Ignition Engines” covers this fuel

blend, nominally 75 to 85 percentdenatured fuel ethanol and 15 to 25percent hydrocarbons for use inflexible fuel vehicles.

Three Vapor Classes have beenestablished that determine thepercentage of denatured ethanol andhydrocarbon that need to be blendedto maintain “on-spec product”. Class 1(85/15) is the summer blend; Class 2(80/20) is the transition blend utilizedin the spring and fall; and Class 3(75/25) is the winter blend. Thepercentage of volatile hydrocarbons is

increased in the winter to aid incolder weather “startability”.

Retailers who have ethanolblender pumps must be aware oftheir E85 supplier’s current blendpercentage to ensure their blends aremeeting specification. They have toadjust the computer in the dispenserto certify that their mid-level blends(E20, E30, etc.) contain accuratepercentages of ethanol.

This chart lists the volatility classthat should be used in each monthand is broken down for each state.

seasonal blends guide

C

WINTER 2009 19

ethanolretailer

Volatility Class by MonthJan Feb Mar April May June July Aug Sept Oct Nov Dec

MaineMarylandMassachusettsMichigan

Lower PeninsulaUpper Peninsula

MinnesotaMississippiMissouriMontanaNebraskaNevada

North of 38˚ latitudeSouth of 38˚ latitude

NewHampshireNew JerseyNewMexico

North of 34˚ latitudeSouth of 34˚ latitude

NewYorkNorth of 42˚ latitudeSouth of 42˚ latitude

North CarolinaNorth DakotaOhioOklahomaOregon

East of 122˚ longitudeWest of 122˚ longitude

PennsylvaniaNorth of 41˚ latitudeSouth of 41˚ latitude

Rhode IslandSouth CarolinaSouth DakotaTennesseeTexas

North of 31˚ latitudeSouth of 31˚ latitude

UtahVermontVirginiaWashington

East of 122˚ longitudeWest of 122˚ longitude

West VirginiaWisconsinWyoming

State and Fuel Marketing Region3 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 33 3 3 3/2 2 2/1 1 1 1/2 2 2/3 3

3 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3 3 3/2 2/1 1 1/2 2 2/3 3 33 3 3 3 3/2 2/1 1 1/2 2 2/3 3 32 2 2 2/1 1 1 1 1 1 1/2 2 23 3 3 3/2 2/1 1 1 1 1/2 2/3 3 33 3 3 3 3/2 2 2/1 1/2 2/3 3 3 33 3 3 3/2 2 2/1 1 1/2 2 2/3 3 3

3 3 3 3/2 2 2 2/1 1/2 2 2/3 3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 33 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 3

3 3 3 3/2 2 2/1 1 1 1/2 2/3 3 33 3 3/2 2/1 1 1 1 1 1 1/2 2/3 3

3 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3 3/2 2/1 1 1 1 1/2 2 2/3 33 3 3/2 2 2/1 1 1 1 1/2 2/3 3 33 3 3 3 3/2 2/1 1 1/2 2 2/3 3 33 3 3 3/2 2/1 1 1 1 1/2 2/3 3 33 3 3 3/2 2/1 1 1 1 1/2 2 2/3 3

3 3 3 3/2 2 2 2/1 1/2 2 2/3 3 33 3/2 2 2 2 2/1 1 1 1/2 2 2 2/3

3 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3 3/2 2 2/1 1 1 1/2 2 2/3 33 3 3 3/2 2/1 1 1 1 1/2 2 2/3 32 2 2 2/1 1 1 1 1 1 1/2 2 23 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 3

3 3 3/2 2 2/1 1 1 1 1/2 2 2/3 32 2 2 2/1 1 1 1 1 1 1/2 2 23 3 3 3/2 2 2/1 1 1 1/2 2/3 3 33 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3/2 2 2/1 1 1 1 1/2 2 2/3 3

3 3 3/2 2 2 2/1 1 1 1/2 2/3 3 33 3/2 2 2 2 2/1 1 1 1/2 2 2 2/33 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3 3/2 2 2/1 1 1/2 2 2/3 3 33 3 3 3 3/2 2 2/1 1/2 2 2/3 3 3

Source: National Ethanol Vehicle Coalition

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