SPRING 2008 ISSUE


Fuel of the Free



Blender pumps provide consumers with a welcome alternative.




Everyone seems to have a different reason for filling their cars with fuel from ethanol blender pumps.


For Rob Fritz of Baltic, S.D., it’s all about helping the United States become more self-reliant when it comes to fuel production.


“I’m very interested in anything that will get us off of foreign oil,” he says.


Meanwhile, Lee Fischer of Sioux Falls, S.D., puts ethanol in his car to keep his money local.


“It’s a U.S.-made product,” he says. “Ethanol in South Dakota has changed the rural community big time. It’s really boosted our economy. And I’d just as soon have my dollar stay here than go overseas.”


For others, ethanol’s cleanburning emissions and renewable source lets them act on their environmental interests. The fact that ethanol’s current price in the market, which is lower per gallon than regular fuel, doesn’t hurt either.


Ultimately, blender pumps — which let consumers choose at the gas pump the ratio of ethanol to gasoline in their fuel — provide another fuel option, and Americans have always liked having choices, notes U.S. Sen. John Thune (R-S.D.). “More blender pumps would give more people the chance to choose ethanol, and it would give them more autonomy and freedom, and that’s a good thing,” he says. “It gives the consumer an option, and that’s consistent with our belief in freedom.”


And by choosing ethanol blends, consumers can actually get higher mileage in their cars while bringing the country closer to the Renewable Fuel Standard (RFS) set in the Energy Independence and Security Act, which was signed into law Dec. 19, 2007, and calls for some 36 billion gallons of ethanol to be used by 2022.


Between 25 and 50 ethanol blender pumps have been installed throughout the Midwest in states including Minnesota and South Dakota, estimates Ron Lamberty, Vice President of Market Development for the American Coalition for Ethanol in Sioux Falls, S.D., and the response has been nothing but favorable. Though the higher blends are presently only approved for flex fuel vehicles, Lamberty is certain the number will grow dramatically. “There are about 160,000 gas stations nationwide. Seven years from now, it wouldn’t surprise me to see 20 percent of those stations with blender-pump capabilities,” he says.


“The people who are putting different blends in their car, they’re saying, ‘This is my car. I’m putting whatever I want in it,’” he says. “They look at it as their own Boston Tea Party. I had a guy tell me, ‘You can’t tell me what I can put in my car.’”


‘SASSY’ ALTERNATIVE


Blender pumps have been around for a while, albeit in a different context. Originally, many gas stations used them to create different grades of unleaded fuel. One tank holds a low-octane gasoline, while another holds high-octane gas. The customer chooses which fuel he or she wants. If he or she wants mid-grade, the two are blended together.


With ethanol blending pumps, station owners use a similar method. One tank holds E85, while the other holds standard unleaded gas. Pumps typically offer E10, E20, E30 and E85 (the numbers equal the percentage of ethanol in the fuel), which is a mixture of the two varying ratios.

Proven Choice

A study conducted by The University of North Dakota Energy & Environmental Research Center and the Minnesota Center for Automotive Research found that three out of four vehicles performed better on a higher blend of ethanol than regular unleaded gasoline.


While some gas stations currently have infrastructure in place for blender pumps, others are looking down the road, seeing the increasing popularity of ethanol and redoing their stations so they can house blender pumps.


“We’ve got a really sassy-looking set-up now, and people really like it,” says Bruce Vollan, Owner of Midway Service in Baltic, S.D., who put in a blender-pump operation in October 2007.


He admits the upgrade wasn’t cheap, adding that it cost about $30,000 for the infrastructure work. But he says the interest in his pumps has more than made up for the initial cash outlay, with sales increasing by about 25 percent since the improvement. “I could have thought of a lot of things to put that money into, but we’ve steadily been seeing growth since then,” Vollan says. “Our ethanol sales have gone through the roof.”


Formerly, it was assumed that while ethanol may cost less at the pump, it provided fewer miles per gallon than regular unleaded gasoline. However, a study released in December 2007 by The University of North Dakota Energy & Environmental Research Center and the Minnesota Center for Automotive Research found that automobiles using midlevel blends may actually get better gas mileage than cars running on regular unleaded gasoline.


As for lessening America’s dependence on foreign oil, Lamberty notes, “it’s already making a pretty sizeable dent. Half of the fuel we sell in this country has ethanol.” He acknowledges that the overall percentage of ethanol sold nationally is only about 4 percent. But he points out, “if it weren’t for that 4 percent, we might be $1 higher at the pump. We’re providing twice as much fuel for gas-powered vehicles than all the oil we took out of Iraq last year.”


The goal now is to give consumers choices and make sure more fuel is available, Lamberty says. And as long as blender pumps continue to proliferate, the United States will have more options when it comes to international politics. “If there’s something going on in the Middle East and we don’t like it, we can have more discretion on who we buy our fuel from,” he says.


NEEDED PUSH


The prevalence of blender pumps got a push from the federal government in the Energy Independence and Security Act, which sets a standard for how much ethanol should be used in the U.S. over the next several years.


But the number of blender pumps across the country needs to increase if the country is going to meet those benchmarks, Thune adds. “We have to create a bigger market for ethanol,” he adds. “There are only a few solutions, and one is to get more fuel stations with blender pumps. Higher blends all around would be part of that solution, too.”


Once blender pumps become more popular, more cars with flex fuel capability will hit the roads, Thune says, which means more cars will be able to use blends like E20 and E30. “Technology will definitely be up to meeting that demand to use higher blends of ethanol,” he says.


Thune adds that once Congress appropriates the funds, and the Department of Energy gets the program up-and-running, the Energy Independence and Security Act will provide grant assistance to help gas-station owners convert to blender pumps, with $200 million authorized annually to help owners make the switch.


But the big push for ethanol comes from people using and selling it. Vollan notes there’s something beyond his bottom line that makes him feel good about selling ethanol.


“I can’t say I’m a real green freak, but we all need to do the right thing. And I believe ethanol is the answer,” he says.


Being flexibleBlender pumps are becoming more popular, but cars must be certified flex fuel vehicles (FFV) in order to use fuel that’s more than 10 percent ethanol. Here’s what the top five automakers are doing to make their cars ethanol-compatible:


>> Chrysler: Chrysler has produced more than 2 million FFVs since 1998 and is committed to making half of its fleet ethanol-compatible by 2012.


>> Ford: The company says more than 5 million Ford vehicles out there today are FFVs, and Ford has pledged to make half of its fleet capable of running on ethanol by 2012.


>> General Motors: GM has 12 FFV models in its 2008 line, and the company hopes to make half of its fleet compatible with biofuels by 2012. Currently, some 2.5 million GM vehicles are FFV, the company states.


>> Honda: Honda hasn’t enthusiastically embraced ethanol, instead pursuing other “green” technologies such as hydrogen fuel cells. Honda has introduced an FFV in Brazil.


>> Toyota: Like Honda, Toyota is currently pursuing other alternative fuels, including hybrid vehicles. But the company is planning on introducing FFV versions of its Sequoia and Tundra models in 2009. “We’ll see how the market treats them,” says Cindy Knight, Toyota Spokeswoman.





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