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Lamberty Report: Teaching to Fish, Not Giving a Fish
by Ron Lamberty

At a high school reunion last month (no, I will not share the graduation year), a good friend of mine who is a math teacher asked me what I do at ACE. “Come to think of it, I teach math, too,” I told him. For the last nine years, I have been encouraging petroleum marketers to “do the math” and add ethanol to their station’s fuel slate.

Over the last two years, some of those petroleum marketers knew the math so well that they decided to take on their suppliers who weren’t passing on the profits available from blending ethanol. ACE worked with several state petroleum marketer associations to pass “splash blending” laws protecting marketers’ ability to buy their own gasoline and their own ethanol, making sure the advantages that can be gained by blending ethanol would not all end up in Big Oil’s bank accounts.

I think that history is important to remember during the current ethanol industry discussion of blender pumps. We all want to see blenders put in across the nation, giving motorists numerous fuel choices – but there are different strategies for getting that accomplished.

ACE believes that for all kinds of smart, bottom-line, economic reasons, adding E85 and higher blends using blender pumps just makes good business sense. At a time when station owners are considering new pumps anyway to meet July 2010 credit card processor requirements, they would be foolish not to upgrade equipment by utilizing tax credits, state programs, and corn grower funds available to those who install E85 blender pumps.

But some are suggesting still-larger grants from the ethanol industry on top of other aid that is available. That “give them a fish” approach was used with very limited success in establishing E85 retail sites, and unfortunately created an expectation that retailers should only install E85 pumps if the ethanol or corn industry gave them the money to do it.

Even with that entitlement mentality, ironically the largest growth in E85 availability came in years when “the math” was right, when marketers put in or switched out pumps based on ethanol’s economics – without a penny from anyone else. The ethanol industry is paying enough when ethanol is selling well below its value – we can turn that negative into a huge positive without giving away even more hard-earned dollars.

The math is right for blender pumps right now, and the window of opportunity is small. That is why ACE and the Renewable Fuels Association have joined forces for a coordinated blender pump campaign, teaching blender pump math to as many petroleum marketers as we can get to over the next three years. We all need to cover as much ground as possible – without tripping over each other – to get this job done.

 
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The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industryís hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanolís carbon footprint, E10, E15, and mid-range ethanol blends.
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