More stations offer new ethanol blends, but many drivers aren't up to speed

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Posted: Wednesday, June 12, 2013 12:00 am

The number of Nebraska locations serving flex-fuel vehicles — the kind that run on any blend of ethanol and gasoline — is increasing, and an Omaha-based ethanol producer has launched a campaign urging drivers to give the fuel a try.

Still, the state lags some neighboring states, including Iowa, in providing blender pump locations, and a national survey indicates many consumers remain uninformed about the various blends of ethanol.

Nebraska now has 84 total locations that offer ethanol blends of fuel above E10 for flex-fuel vehicles, an increase of 40 percent over January 2012.

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Of the 84 locations, at least 58 offer E85, which is 85 percent ethanol and 15 percent gasoline. The remaining 26 offer some type of ethanol blend above E10 (10 percent ethanol, 90 percent gasoline), which is considered a standard fuel. Retailers decide which of the available ethanol blends they include.

The newest flex-fuel locations include stations in Lincoln, Fremont and Blair, plus sites in David City, Lexington, Jackson, Elgin, Hartington and, most recently, the Mini Mart in Osmond.

The increase is due in part to grants made available by the Nebraska Corn Board and the state's 23,000 corn farmers, said Kim Clark, the board's director of biofuel development.

The board had $750,000 in grants available for retailers between July 2012 and June of this year. Qualifying retailers could receive $30,000 for the first blender pump and installation, and $10,000 for a second pump, for a maximum of $40,000 in grants per retail site. The funds were exhausted by February and fuel retailers have spent the past few months finishing construction.

“Retailers are ... understanding the importance of ethanol. It's a locally produced, homegrown fuel,” said Clark, who noted that the board will decide later this month how much to allocate to the grant program for the next fiscal year.

Todd Sneller, administrator for the Nebraska Ethanol Board, said that while Nebraska ranks second nationally in ethanol production with a combined production capacity of more than 2 billion gallons of ethanol each year, the state lags in its number of blender pump locations. He looks to neighboring states and sees “aggressive programs” to boost the number of E85 and other blender pump locations.

Iowa, the nation's largest ethanol producer, has 176 E85 refueling stations, according to the Iowa Corn Promotion Board and Iowa Corn Growers Association.

Nebraska is “certainly in the top 10 nationally (for number of flex-fuel pump locations), but within the region, we'd like to do better than we are,” Sneller said.

Today, there are about 140,000 people driving flex-fuel vehicles in Nebraska, and that number is increasing, Sneller said.

But many drivers don't realize they can use ethanol blends. Flex-fuel vehicles often are designated with a label on the fuel cap or door. Drivers also can check their owner's manual or visit ne-ethanol.org.

It has taken a multi-organization and retailer strategy to educate drivers about ethanol blends greater than E10, Sneller said.

Ethanol producers have worked with fuel marketers and retailers to ensure the consumer is getting an incentive at the pump for choosing an ethanol blend. Last week, Sneller traveled from Ogallala in western Nebraska to Jackson in the northeast corner and noticed an average 90-cent difference across the state between E85 and unleaded gasoline.

Seeing that was a “good indicator that this strategy is starting to take hold,” he said.

“(Retailers) may not make as much per gallon, but they're selling a lot more gallons,” Sneller said. “That's been the goal all along from the ethanol producers' standpoint.”

Omaha-based ethanol producer Green Plains Renewable Energy in April kicked off an awareness campaign about ethanol. CEO Todd Becker said the company has sent out direct mailers and put up billboards. It also launched e85omaha.com, which tells drivers where in the Omaha area they can fill up with E85.

Iowa Corn, which consists of the Iowa Corn Promotion Board and Iowa Corn Growers, has put up billboards, sent direct mail and made TV and radio advertisements. Iowa Corn has sponsored the Iowa Corn Indy 240 to encourage drivers to fill up with E85 “like the pros,” and this month with Green Plains and the Nebraska Corn Board will host events at Omaha fuel retailers by offering E85 at a discounted 85 cents per gallon.

A new survey by the National Association for Convenience and Fuel Retailing, however, suggests that drivers still haven't taken to greater ethanol blends.

An industry trade group for gas station retailers in May asked 1,183 American drivers who regularly fill up with gasoline about their fuel preferences, and only 26 percent said they were familiar with E15, which is a blend of 15 percent ethanol. More than half said they didn't know what E15 is.

Some respondents expressed concern about E15 damaging their cars and decreasing fuel efficiency, though the Environmental Protection Agency has approved it for vehicles dating back to 2001 and later, which affects an estimated 60 percent of vehicles today.

When asked about E85, only about 30 percent said they were somewhat or very familiar, though the fuel has been on the market for more than a decade and 12 percent of 2013 models are flex-fuel vehicles able to handle ethanol blends up to 85 percent.

On fuel economy, after hearing an explanation of what E15 is, only 59 percent of those surveyed said they would consider buying it if it was the same price per gallon as gasoline. Among respondents who said they would buy E15 if it were the same price as E10, nearly 50 percent cited better fuel economy as the reason, even though E10's is better.

The American Petroleum Institute maintains that while ethanol has been cheaper than gasoline historically on a gallon-to-gallon basis, ethanol contains less energy and costs consumers more to travel the same distance. The U.S. Department of Energy's fueleconomy.gov offers consumers information about fuel economy and specific vehicle makes and models.

Becker said now is a good time for consumers who drive flex-fuel vehicles to look at the value of ethanol blends.

“There's a lot of arguing that ethanol doesn't give the same amount of energy. When it's a dollar cheaper (than unleaded), it's meeting that and more,” he said. “You're getting value and it all falls into consumers' pockets as savings.”

Becker said it's critical for consumers to educate themselves on price spreads and performance by comparing ethanol blends and gasoline and to consider that using ethanol strengthens Nebraska's economy. The industry now competes with oil head to head without any government subsidies and is profitable at this point, he said.

Contact the writer:

402-444-1192, emily.nohr@owh.com

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