Business

Casey's stores to add E15 fuel pumps after EPA lifts ban

Move comes after EPA OKs year-round sales of ethanol-gasoline blend

E15 pump next to an E85 pump at the Kum & Go, 1420 Mount Vernon Rd. SE, in southeast Cedar Rapids, Iowa, on Friday, May 31, 2019. (Jim Slosiarek/The Gazette)
E15 pump next to an E85 pump at the Kum & Go, 1420 Mount Vernon Rd. SE, in southeast Cedar Rapids, Iowa, on Friday, May 31, 2019. (Jim Slosiarek/The Gazette)

Casey’s General Stores executives announced plans Monday to add another more-than-60 E15 fueling sites on the heels of Friday’s announcement the higher blend of ethanol fuel could now be sold year-round.

The Ankeny-based convenience store chain last fall announced it would greatly expand its E15 offerings by installing up to 500 pumps over the next several years. Casey’s has 2,000 store locations in 16 states.

“The summertime E15 restrictions have been a major concern for us for a long time and would typically slow down our E15 expansion,” Nathaniel Doddridge, Casey’s director of fuels, said in a statement. “Now that we know we can provide our guests with a consistent experience at the fuel pump year-round, we are expanding E15 at a faster pace to stay ahead of our competition.”

On Friday, the U.S. Environmental Protection Agency announced it would no longer ban summer sales of E15 — a fuel blend of 15 percent ethanol and 85 percent gasoline often marketed as Unleaded 88. The ability to sell E15 year-round makes the fuel more attractive for retailers.

But while Casey’s officials were quick to commit to expanded ethanol offerings, others anticipate a more gradual expansion of E15 nationwide.

During a Monday conference call hosted by the Renewable Fuels Association and ethanol industry experts, officials said year-round E15 sales provide more stability in the industry and should influence additional fuel pump expansions.

“We expect to see more and more of those announcements coming, but at least in the near term we think it’s going to be somewhat incremental. Longer term, the three- to five-year outlook, we think E15 is going to have a big impact on domestic demand,” said Geoff Cooper, president and chief executive officer of the Renewable Fuels Association.

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Some officials have noted it can cost hundreds of thousands of dollars to update an existing gas station to legally offer E15 — which could create a costly barrier for small businesses.

“Whether it’s a large business, small business, a medium-sized business, ultimately, it’s going to come down to what the consumers want and what they demand,” Steve Walk, chief operations officer with ethanol fuel marketing company Protec Fuel, said Monday. “If it’s a small retailer, they’re going to make business decisions accordingly.”

According to Growth Energy, the nation’s largest biofuel trade association, E15 is sold at 1,807 stations in 31 states. The association said the over 60 new sites announced by Casey’s would come online his summer.

E15 is available at more than 180 refueling sites in Iowa, according to the Iowa Renewable Fuels Association.

Cooper said he anticipates nationwide consumption of E15 this year to more than double the estimated 300 to 400 million gallons sold in 2018.

“We think we will conservatively do 700 to 800 million gallons of E15 sales in 2019 as a consequence of this rule-making,” Cooper said. “The larger impacts are going to be in the longer term. This finally gives the regulatory certainty to the supply chain that it was looking for.”

It’s anticipated that the petroleum industry will challenge the EPA ruling, though no lawsuit has been filed. Officials with American Fuel and Petrochemical Manufacturers have called the EPA ruling unlawful.

“The final rule undoubtedly will be subject to a legal challenge, but the EPA seems to have crafted the rule to sustain such a challenge,” Bryan Stockton, counsel at Pillsbury Winthrop Shaw Pittman LLP in Washington, said on the conference call.

l Comments: (319) 398-8309; mitchell.schmidt@thegazette.com

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