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- by Mary Welge of Oil Price Information Service, February 21, 2003

Gasoline pumps that offer E85, a blend of 85% ethanol and 15% gasoline, are slowly catching on with jobbers. About 200 stations in the U.S. now dispense E85.

But jobbers need to know that while grant monies are available for E85 projects, they will have some out of pocket costs to weigh. National and local ethanol concerns may put up more than half the money but the rest may fall on the jobber. Some items jobbers may want to consider:

- Equipment/site: A tank and pump, new or a conversion. Card scanner system would have to be connected. Also, many government fleets are required to use alternative fuels; the public is not, so a site serving fleet customers is desirable. The jobber may in some instances have to construct a new pad and island. Also, projects could disrupt access to the rest of the station.

- Fees/costs: jobbers may have to pay for permits and other associated fees. In California, required testing by the Air Resource Board can cost up to $10,000. Also, some marketing costs may fall on the jobber.

- Commitment: Jobbers must commit to supplying E85 for three years – if they back out sooner they may have to pay back grant monies.

- Advantages: they can better serve existing fleet accounts and attract new ones; and a jobber gets exposure with a new cutting edge product.

California based InterState Oil last week announced joint venture plans with the California Department of Food and Agriculture to develop one of the first E85 pumps in the state. The Sacramento based jobber will receive $46,000 from National Ethanol Vehicle Coalition covering more than half the cost of the project. CDFA and InterState would match the rest. The fueling facility will be owned and operated by InterState and used to fuel 113 vehicles in CDFA's fleet. It will also be available to consumers and should be dispensing product by the fall.

A match was made after ARB eyed test sites for E85 fueling and InterState had an existing Pacific Pride cardlock that looked like a good fit.

Upon start-up, the U.S. Postal Service in Sacramento may be among its customers. Its fleet includes 341 E85 vehicles and they have been "waiting for a station," said a CDFA spokesman.

Brent Andrews, of InterState Oil sees the conversion as a sign of the times. "With all of the different alternative fuels that are coming I think we need to be as diverse as possible. I think we're just doing our part to try and meet the needs of consumers and fleets."

Jobbers in Minnesota, Colorado Springs, Denver, and New York have developed E85 sites.

NEVC Staff Notes: Recognition by OPIS that the sale of E85 as a form of transportation fuel demonstrates the potential that this excellent form of alternative fuel provides for both retailers and operators of motor vehicles.