Ethanol Blender Pumps

Presented by:
Robert White
Director of Market Development – Renewable Fuels Association
 The BYO Ethanol Campaign
• Joint effort of the American Coalition for
Ethanol & the Renewable Fuels Association
• Campaign funded by:
• State corn grower organizations in CO, KS, KY, MO,
NE, IL, IA, SD, MI, MN & OH.
• NCGA’s Ethanol Committee.
BYOethanol.com
 What is available?
• Sales Kits
• Dispenser Labels
• Expert Advice
What is a “Blender Pump?”
•Not new technology
•Already found in over half the
dispensers in the country
•Offers consumers more choices at the
pump
•Dispenser will blend to make various
blends of ethanol
•Typically two tanks, process usually uses
E10 and E85 or denatured ethanol
•Any blend above E15 is for use in FFV’s
only
How does a blender pump work?
How does a blender pump work?
Renewable Fuels Standard
 What’s in it for you?
 More product choices for consumers on same footprint.
 Qualifies for partial federal infrastructure tax credit.
 Typically uses existing tanks and pipes – huge cost savings.
 Ethanol plants can sell direct – bypass terminal markup.
 Flexibility for future approval of mid-level ethanol blends.
 Pump paid for by sale of all products, not just E85.
 Faster inventory turnover, protection against market swings.
 And E15…
 What’s in it for you?
Prices NL E85 E10 E15 E30
Gasoline $3.3100 $3.3100 $0.4965 $2.9790 $2.8135 $2.3170
Ethanol $2.5900 $2.2015 $0.2590 $0.3885 $0.7770
Product Cost $3.3100 $2.6980 $3.2380 $3.2020 $3.0940
Fed Tax - Gas $0.1840 $0.1840 $0.1840 $0.1840 $0.1840 $0.1840
VEETC - Ethanol -$0.4500 -$0.3825 -$0.0450 -$0.0675 -$0.1350
State Tax $0.2800 $0.2800 $0.2800 $0.2800 $0.2800 $0.2800
TOTAL COST $3.7740 $2.7795 $3.6570 $3.5985 $3.4230
 Incentives
Federal
– Alt Fuels Infrastructure Tax Credit – EXTENDED
– VEETC – EXTENDED
– USDA – NEW!
State
– Grants
– Tax Credits
– Discounted Motor Fuel Rates/Rebates
Local Opportunities
* Links to all incentives are found at www.BYOethanol.com, drop down menu Incentives.
Section 9007- Rural Energy for America Prog.

Flex-Fuel
Infrastructure (E85
and Ethanol Blender):
dispensers,
components and
tanks are eligible
under REAP in the
Interim Rule and FY11
NOFA
Section 9007- Rural Energy for America Prog.

•Grants request must not exceed 25% of project

costs - Minimum grant : $2,500 Maximum:
$500,000
•Guaranteed Loan request must not exceed 75%
of project costs (including REAP grant funds, if
applicable) - Minimum: $5,000 Maximum:
$25,000,000
•20% of all grants nationally are set aside for
projects less than $20,000
Section 9007- Rural Energy for America Prog.
•Rural small businesses and agricultural producers can
apply:
•Rural – Any area other than a city or town with
population over 50,000; cannot be in urbanized
area adjacent to such a city or town.
•Small Business – A private entity including a sole
proprietorship, partnership, corporation,
cooperative
•Must meet SBA size standards for small business
www.sba.gov/size/indextableofsize.html
 SBA Size Standards
NAICS
Code
445120 Convenience Stores $27.0 million

447110 Gasoline Station with $27.0 million

Convenience Store

447190 Other Gasoline Stations $14.0 million

 Federal Infrastructure Tax Credit

Options:
1. Standard Dispenser: $ 17,000
2. “UL” E85 Dispenser: $ 27,000

* Tax credit expires December 31, 2011.

 Federal Infrastructure Tax Credit

“UL” E85 Dispenser:

Flex-Fuel add-on: $ 10,000
¼ of Standard Pump: $ 4,250
Total E85 Expenses: $ 14,250

* Tax credit expires December 31, 2011.

 Federal Infrastructure Tax Credit

30% of $14,250 E85 Expenses =

Federal Tax Credit: $ 4,275

Net E85 dispenser cost: $ 22,725

vs. $17,000 for standard dispenser.

* Manufacturers may offer further discounts, and this

does not include potential state & local incentives.
 Estimated UL Blender Pump
Standard Dispenser UL Blender Pump
MSRP $17,000 $27,000
Federal Tax Credit $0 $4,275
USDA Grant $0 $6,750
NET COST $17,000 $15,975

* Does not include other potential funding sources at state or local level,
and does not inlude potential income from VEETC or RINs.
 Underwriters Laboratories (UL)
E85
• De-certified all equipment in October 2006.
• Gilbarco & Dresser Wayne both received certification in
late June 2010.
• OPW received certification in late June 2010.
• Many options available, more coming soon.
E15
• Different issue.
• “E85” blender pump would accommodate E15.
 ASTM
• New ASTM standard for E85, now referred to
as Ethanol Fuel, ASTM 5798-10.
• Lowers overall ethanol content to 68% for all
three classes.
• Always purchase fuel IAW ASTM Standard.
 Summary
• If you are looking at replacing dispensers,
blender pumps will allow you to offer more
products and likely save money.
• If you are interested in offering E15 in the
future, this is the least expensive approach to
offering this product.
• Don’t start from scratch, learn from those of
the past. Experts are here to help!
 Questions?
Robert White
Renewable Fuels Association
rwhite@ethanolrfa.org
(402) 391-1930
Twitter: @fuelinggood

For more information, please visit: www.BYOethanol.com

Twitter: @blendyourown