Local stations, corn growers join forces on new fuel blend.
The higher-ethanol fuel blend called E15 is hitting the Twin Cities through an unusual marriage between corn growers and independent gas stations.
Penn Mobil in south Minneapolis is the first Minnesota station to offer the 15 percent ethanol fuel, but other stations are planning to sell the new blend, ethanol industry officials said Monday.
Minnesota corn growers, who stand to benefit from increased ethanol sales, are helping to clear a barrier to E15 by subsidizing the expensive upgrades to gas pumps so they can dispense higher-ethanol fuel.
The strategy represents a direct retail confrontation with the oil industry, which has been fighting a high-stakes political war with the ethanol industry over expansion of renewable fuels. With 21 ethanol plants, Minnesota is one of the largest producers of the biofuel.
“It is a major market-share battle,” said Mike O’Brien, vice president for business development at Growth Energy, an ethanol industry trade group that has promoted the strategy.
Some independent station owners, led by Penn Mobil’s Richard Bohnen, not only are adding E15, but they are cutting ties to major oil companies. At least four stations plan to rebrand under a new oil company, Minnoco, owned and controlled by station owners.
“The advantage is that you own your own brand,” said Bohnen, the second-generation owner of the longtime Mobil station at 60th Street and Penn Avenue S. in Minneapolis, and founding president of Minnoco.
Will consumers buy E15?
At the Penn Avenue station, which began selling E15 two weeks ago, another advantage flashed Monday in big numbers on the price sign: E15 was 15 cents a gallon cheaper than E10, the standard 10 percent ethanol blend. Bohnen said typically E15 will be less costly because wholesale ethanol usually carries a lower price than gasoline.
The price was attractive to Heather Olson, who pulled up in her 2012 Honda and selected E15 — but only after Bohnen explained what it was. “I didn’t know anything about it,” Olson said. “I will watch my gas mileage. Cheaper is always good.”
Most U.S. cars and trucks were designed for E10. But the U.S. Environmental Protection Agency, based on testing of new and old vehicles, has approved E15 for 2001 and newer cars, SUVs and light trucks.
Pre-2001 vehicles as well as motorcycles and various other small and large engines are not approved for E15 because of concern about engine damage.
Adding to the potential confusion, the U.S. auto industry doesn’t endorse E15. Ford and GM have approved E15, but only for more recent models.
The Alliance of Automobile Manufacturers advises car owners to check their owners’ manuals. For cars designed for E10, the use of E15 carries “a strong possibility of corrosion over time,” said Gloria Bergquist, a vice president of the group, in an interview Monday.
O’Brien of Growth Energy said that’s nonsense. In the past six months, 25 stations in eight states have sold 250,000 gallons of E15 without one complaint, he said.
The American Petroleum Institute, the oil industry trade group, did not return a phone call seeking comment Monday.
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