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The ethanol industry wants to sell higher-ethanol blends so its market doesn’t max out at 10 percent of the nation’s fuel supply — what the industry calls the “blend wall.”
Part of that strategy is to sell fuel blends of up to 85 percent, or E85, to owners of flexible fuel cars. But that market is limited. E15 is aimed at the majority of car owners, 75 percent of whom drive 2001 or newer vehicles.
Yet the pumps to dispense higher-ethanol fuels, called blender or flex pumps, are expensive. A station conversion can cost $100,000 and up, industry officials said.
And most gas stations — even those that carry the name of a major oil company — are independently owned small businesses, said Lance Klatt, executive director of the Minnesota Service Station & Convenience Store Association.
So the Minnesota Corn Growers Association chipped in $2 million and the Minnesota Department of Agriculture another $1 million over two years to offer technology grants to station owners who agree to sell E15. The American Lung Association of Minnesota, a promoter of clean-burning fuels, administers the money, and it has approved the Penn Avenue station among the first five recipients.
“Our hope is that over the next couple of years, we will get 40 or 50 or more,” said Tim Gerlach, executive director of the corn growers’ association based in Shakopee. There are 2,800 gas stations in Minnesota.
Not all of the E15 sellers are expected to rebrand as Minnoco stations. But stations in Shakopee, Coon Rapids and Maplewood are making the switch, and a station in Willmar is considering it. Bohnen said Minnoco stations won’t be required to carry E15, though the first ones are doing so.
Turning away from big oil companies carries a cost. Jerry Charmoli, owner of the Hwy. 10 Mobil in Coon Rapids, said that he’s spending $250,000 on the switch to E15 and Minnoco next month and that he hasn’t decided yet whether to accept the grant.
With their own brand, stations expect to save money on credit card fees. They won’t be restricted to one fuel supplier, but they’ll need to do their own brand marketing.
Charmoli, whose contract with Mobil had come up, said he thinks it’s worth it. “It’s our own brand,” he said. “We can control our own destiny.”
David Shaffer • 612-673-7090 @ShafferStrib