Gas Station Chain Converts to Ethanol
By George Anderson
Robert Bolduc, president of Pride, a 16 gas station chain headquartered in Springfield, Mass., knows that ethanol blend gasoline is currently cheaper than gasoline alone but that’s not the reason says he is switching over his entire operation to allow consumers to fill up their tanks with this fuel alternative.
“We are doing this for environmental reasons and because corn is a renewable source of energy. If all gasoline used a 10 percent ethanol blend, it would cut reliance on foreign oil by 10 percent,” he said while also telling The Republican newspaper, “we also want to be the first in state to have converted totally to an ethanol blend.”
As to the current issue of the high price of fuel (prices for a barrel reached an all-time high of $70.80 yesterday in reaction to Hurricane Katrina), Mr. Bolduc is not unaware of what the price paid at the pumps means to some of his customers and the economy as a whole.
“When households are spending $2,500 to $3,000 more a year on gas, by my estimates, someone in the economy is going to feel the pinch,” he said.
“Most families will have to cut back somewhere because they can’t take the hit at the gas pump and continue to spend the same amount elsewhere. Will it be restaurants, hotels? Someone somewhere is going to feel the impact.”
Montgomery Shaw, spokesperson for the Renewable Fuels Association said that switching to alternative fuels such as ethanol will help drive prices down at the pump. “Any time you cut dependence on foreign oil, it should put a downward pressure on prices,” he said.
Moderator’s Comment: What do you think of the Pride gas station chain’s decision to switch entirely to ethanol blend gasoline? Do you expect many more
gas station operators to follow Pride’s lead and voluntarily switch to ethanol blend gasoline?
Sounds like a winner to us: Consumers save money at the pump, help improve the environment and reduce our nation’s dependence on foreign oil. Kudos, Mr.
Bolduc. –
George Anderson – Moderator
Just look at http://www.macewenpetrol.com/
This is one of many north of the border that have already been marketing the blend for as far back as I can remember. There is also Sonic, Mowhak…
Lot’s of good discussion on both the marketing implications (clear winner) and reduced oil/fuel consumption (jury is clearly out). One additional thought. We frame this discussion in terms of “fuel” or “oil” consumption a little too readily. We should really be talking about “energy” consumption. And while all exploration of alternative fuels has merit I suppose, no one has pointed out that it actually takes more energy to convert corn to ethanol than the resulting fuel generates itself. In other words, ethanol production is a net energy negative — even if it doesn’t reduce mileage as suggested.
Ten percent ethanol is not a big deal, as others have already pointed out. It’s commonly used as a blend in many parts of the country.
However, E85 (85 percent ethanol) will be.
It’s no secret that millions of cars and SUVs of recent vintage are known as flexible-fuel vehicles (FFVs). However, Detroit’s marketers have done very little to let people know that FFVs can stop at E85 dispensers and save substantially on refueling costs, particularly in Minnesota and other parts of the upper Midwest. And, until recently, E85 dispensers have been difficult to find.
That is changing slowly as retail fuel facilities in the Midwest increasingly prepare their stations for E85 conversions thanks to state and federal incentives (e.g., see the recently signed Energy Bill) and the escalating cost of refined gasoline.
The Pride example in Massachusetts is significant because it shows that the message from the Midwest is sinking in elsewhere.
Most cars get worse mileage on ethanol than on 100% gasoline. The 10% blend can hurt your mileage by up to 10%, potentially wiping out all the so-called environmental benefits. Ethanol is just a form of subsidy for corn farmers, and is a red herring.
Even if it worked, you can’t conserve your way out of an energy crisis. All it would do is buy us some more time.
Er, not so fast. As others have pointed out, ethanol blends are quite common. The government has been pushing this for a long time. Let’s just say there are strong arguments for and against ethanol. Here’s a snippet from a Business Week piece on oil dependence Link:
As Al rightly points out, the only real answer is cutting consumption. Around 50% of our oil consumption goes into gas and diesel. Real alternatives exist, and ethanol is a band-aid of unclear value. So I applaud this retailer — his heart is in the right place, but the real problem is that he has too many customers for a product that we need to move past.
I thought all gas was 10% ethanol anyway. Maybe on the east coast its different. I still want to know why I can’t go buy a regular small car that gets 44 mpg like I did 20 years ago? With all the pollution controls on cars and reformulated gas, all we do is burn more fuel.
Even at $2.79 a gallon, consumers will cross the street for a penny. Gas is likely the most cost volatile product there is. Unless selling Corn-gas can gain a price advantage, it won’t make a kernel’s bit of difference.
Not only should we produce “Ethanol” for domestic use, we should be exporting it too! Bio Diesel would further reduce dependence.
Ethanol blend gas is required in some areas to reduce air pollution. It is rumored to reduce gas mileage, which may put a damper on sales. On Sunday, The NY Times Auto Section reported on Honda Civics converted to natural gas. 98% of natural gas used in this country comes from North America. The cost is equivalent to about $1.30 per gallon. Honda is expected to expand the sales of natural gas Civics. The Civics are made in Marysville Ohio, and are “…the cleanest internal-combustion car ever tested by the EPA.” Ford used to sell natural gas cars to taxi fleets in NYC, but “…abandoned its American program.” Ford gets this week’s Institute of Sales Prevention Award for Timeliness.
Differentiation…clearly a point of differentiation between Pride and its competitors. With U.S. research ingenuity, it can only get better and prices could be stabilized. Pride should not neglect the fact that price points matter and hence should focus on the right price point. A product with good performance, environmentally friendly and at the right price point is a good thing. I say Kudos to Pride.
The good news for the chain is that if it doesn’t work out, it can demonstrate that it tried to do the right thing but its Massachusetts customers did not. If that were to happen, it would still have the option of going back to standard gasoline. Personally speaking, I applaud the attempt and hope it works out.
I think this is a great marketing tactic. I also believe that the more fuel choices that become available, the more price competition will occur, keeping the market somewhat efficient.
The man is a saint. Finally someone has had the courage to implement a solution to the oil issue – a solution I might add we’ve had for some time. Years ago I personally witnessed the technology that would allow us to burn fuel that is 30% water (Aquanol). Someone once told me that if we’d grow corn for ethanol just on the fields the government pays farmers to keep fallow – we wouldn’t have to import any oil at all.
Why have we not been bolder years ago? Greed. Oil, sparkplug and automobile companies have, in my estimation, literally lobbied and fought against solving the problem. Rather than seeing new opportunities they cling to their cash-grabbing ways. It is very sad that ‘the greater good’ seldom comes into their minds. So God bless Mr. Bolduc and the Pride organization!
I really can’t see this as anything more than a corn cob pipe dream. What needs to happen for the U.S. to reduce dependence on foreign oil is to reduce consumption, a lot. And that will happen when the government raises mileage standards, a lot, and people stop buying bigger cars and SUV’s than they need. I don’t look for either to happen anytime soon. Ethanol has been around a long time, and is just a novelty that pops up when gas prices go way up.
Well, ethanol is a commodity, and its price can go up again like it did a year ago, so that it costs more than gasoline. This isn’t a panacea, but it’s at least looking at alternative energy sources, and renewable ones at that. It’s troubling that we’ve gone 30 years since gasoline shortages and lines at the pumps, without doing anything substantive about energy. We are also no longer in as strong a position as we were then, in terms of controlling international sources of supply. I think this gas station chain has a temporary advantage, and I applaud the owner for promoting it. But if ethanol prices spike, he better be in a position, contractually, to guarantee himself adequate supplies of plain old gasoline.
Well, I say good on Mr. Bolduc and shame on those who think it’s too small an effort to be bothered with or that it puts him into a position where he might stand to gain more in the future. Taking a stand and being the first one to do so is one of those truly American traits of which I feel most proud. Stop trying to pull the guy down. And stop holding your breath waiting for government action and/or resistance to industry lobbying. Now is the time for all good men and women to come to the aid of their country.
Where’s the innovation with Pride’s move? Corn is renewable resource and ethanol has been part of gasoline mixtures in the Midwest for sometime … up to 20% in some states. As more gas stations and states embrace ethanol, Midwest agriculture will get a big financial boost. Then, in the future, we might even equate corporate corn farmers with today’s oil producers.
Here is a site that explains more about ethanol. The ethanol industry needs to do some more marketing to counteract some of the misinformation that is out there.
www.ethanol.org/talkingpoints.html
While we’re talking about alternative fuel for automobiles, let’s not overlook the promise of hydrogen fuel cells. When combined with solar-electric technology (to power the hydrolysis process that makes hydrogen), this could usher in a whole new paradigm for transportation.
In my humble opinion this should begin with a national “solar rooftop” imperative – a 10-year plan to convert every structure in America into a net contributor to the power grid. The benefits to our economy, national security and world stature would be extraordinary. The electric power thus generated would permit a nationwide network of hydrogen stations.
I don’t know what you do in the States but I can tell you in British Columbia we have a “few” outlets selling regular unblended gasolines. The rest sell ethanol blends, with Chevron being one of them. I can fill up at Chevron and get 130km (approx. 80 miles) less per tank or simply go to the other guys and get the unblended gas – all for the same price!!
Now I don’t claim to work for NASA but I can tell you this….there is no way I will pay for blended fuel and get poorer fuel mileage! By having to fill up more often am I not placing the same amount of pollutants into the air?? If my vehicle supposedly runs 15% or so cleaner on ethanol blends but I use 25% more fuel I invariably pump more greenhouse gases out the exhaust! So where are we saving the environment?? Get the people on the street who drive the large gas guzzlers a reality check and get the automakers to work on even better emissions controls.
By the way….I add acetone to my fuel. We do air care here in British Columbia and without acetone I just pass…with acetone my reading go to almost nothing!! Forget the claims to extra mileage that are made (yes it increases my mileage too), just look at the air quality readings!!
Just my humble opinion.