Ohio Ethanol Tour highlights efforts to break the blend wall

Source: By Matt Reese, Ohio's Country Journal • Posted: Tuesday, May 30, 2017

Ethanol has been an incredible success story for corn growers, particularly in Ohio. Nonetheless, the corn-based fuel faces numerous challenges for continued growth, often referred to as the “blend wall.”

The ethanol blend wall is a barrier for ethanol expansion created by a number of economic, legislative and logistical factors. One component of the blend wall was that most cars were not approved for legal use of ethanol fuel blends higher than 10%. That changed in 2012, however, when the Environmental Protection Agency approved E15 for use in model year 2001 and newer cars, light-duty trucks and medium-duty passenger vehicles (SUVs). In addition to the EPA ruling, there are increasing numbers of flex-fuel vehicles on the roads that can use up to 85% ethanol blends.

Another component of the blend wall is consumer choice. Will consumers choose higher blends if they have the option at the pump? This pairs with a third factor in the ethanol blend wall: the infrastructure. There are relatively few gas stations that offer blends of ethanol higher than the standard 10%, limiting opportunities for purchasing higher blends of ethanol.

This summer, Ohio’s corn farmers and their checkoff are chipping away at the ethanol blend wall in the state by highlighting opportunities to buy higher ethanol blends at fueling stations on the 2017 Ohio Ethanol Tour. The summer-long tour kicked off in May and will run though this fall, according to Brad Moffitt, director of market development and membership for Ohio Corn & Wheat.

ODA director David Daniels cuts the ribbon for the new E85 pump with Tadd Nicholson (left) and Matt Nichols with Thorntons.

ODA director David Daniels cuts the ribbon for the new E85 pump with Tadd Nicholson (left) and Matt Nichols with Thorntons.

“The Ohio Ethanol Tour is going to have about 20 stops between now and the middle of October. We are going to be at Sheetz stations in Cleveland and Kroger stations in northeast Ohio. Speedway has been a great partner as well. We’re also going to hit independents like Brookside Carryout in Van Wert and Folk Oil in Maumee. Heritage Co-op has four locations where they retail fuel and those are in Mechanicsburg, Urbana, Kenton and Richwood and we are going to be there to help with customer communication. It is going to be a fun summer and we are really looking forward to it,” Moffitt said. “We are going to highlight our partners in the chains but we are also highlighting the independent ‘mom-and-pop’ style stations that invested in this infrastructure so their customers will have choices at the pump.”

The Ethanol Tour highlights the results of a tremendous effort that began with Ohio Corn Checkoff investment in ethanol over many years. In a team effort between Ohio’s corn growers, the Ohio Department of Agriculture and private fuel retailers, the state received and implemented a U.S. Department of Agriculture grant that is addressing the ethanol blend wall through vital infrastructure expansion of fuel pumps offering higher ethanol blends.

“This has been a partnership of the whole value chain. We’ve invested corn farmer dollars from the checkoff in this program. The Ohio ethanol plants are involved and the retailers. We have the farmers who grow it, the ethanol plants that refine it and the wonderful station owners that know the value of this product and retail it to consumers across the state,” Moffitt said. “Ohio was fortunate to receive almost $3.5 million through the USDA’s Biofuels Infrastructure Program (BIP). That was combined with matching funds from the Ohio Corn Checkoff, Speedway, Sheetz, Protec Fuel, Guardian Energy’s Lima Ethanol Plant, and Three Rivers Energy’s Coshocton ethanol plant. So, in total, we are investing almost $5.5 million around the state to add E85 and E15 dispensers.

“We are really proud of the fact that we have invested about half a million from the checkoff program and we have pulled in between $5 and $6 million total from all of the partners — that is an 800% return on investment for our farmers to make sure this fuel they are growing is retailed in Ohio.”

The Ohio Ethanol Tour started at a Thorntons station in Galloway on the southwest side of Columbus. Matt Nichols, with Thorntons, emphasized the commitment of the chain of gas stations to biofuels.

“Thorntons is an independently owned and operated convenience store chain and fuel retailer and we are celebrating E85. We have been committed to offering choice to our customers. We want E85 in as many locations as possible. The program has been a huge success for us and we have E85 now at two new locations in central Ohio. These efforts would not be possible without the efforts of Ohio Corn & Wheat,” Nichols said. “We have two E85 dispensers installed at this location in Galloway and another store with two E85 dispensers in Columbus proper as part of the BIP program. We are in six states and biofuels have always been part of our culture. We are an innovative company and we want to think outside the box and offer our guests as many fuel options as possible. Biofuels represent great growth in that with options for higher octane and that are better for the environment. The next step is continuing to pursue unleaded E15 and understanding the demand for it and how it fits into our markets here.”

The Ohio Department of Agriculture played a key role in the process by facilitating the USDA grant that was awarded to the state through a competitive process, said ODA director David Daniels.

“This gives our consumers choices in the marketplace and gives our producers the opportunity to produce it. The $3.4 million was available through USDA and our department has worked with this program and private sector dollars to stretch this even further. We are the eighth largest corn producer in the nation so we are growing it here, we are producing it here and selling it here. We need the infrastructure in the marketplace and this grant is helping with that,” Daniels said at the first stop of the Ohio Ethanol Tour. “We’re happy every time we have the opportunity to work with commodity groups and the USDA and the private sector. It is great to see what Thorntons has done here to provide that infrastructure for that choice to be possible. We live in a country where everybody has choices. E85 is just an additional choice and it is great for corn farmers.

“The folks at Thorntons here said that consumption of E85 is starting to creep up at this location so people do want choices. They continue to talk about other stations in their chain that might want to participate in programs like this so we look forward to keeping this going. If these first pumps are successful there will probably be additional opportunities down the road with the public/private partnerships. Ohio is a perfect place to do this with the number of ethanol plants and the amount of corn produced. We believe that the expanded availability of ethanol-blended fuels throughout the state is a win-win for our corn farmers, our fuel station owners and operators, and for all Ohioans.”

With the new equipment, Ohio will now have approximately 300 pumps for higher blends of ethanol fuel

Squares are existing higher blend ethanol locations and circles are targeted sites..

“It is a statewide initiative. It really depends on the companies who want to dispense the fuels,” said Tadd Nicholson, executive director of Ohio Corn & Wheat. “Whether big or small retailers, it doesn’t really matter. We are taking ethanol out to the field everywhere we can. E15 and E85 are the two certified fuel blends that are available. E15 can go into any vehicle that is 2001 or newer, so virtually everyone out there can use that. That is what Sheetz is interested in using in the northeast corner of the state. Other stations like Thorntons are adding E85. Ohio motorists are driving nearly one million flex-fuel vehicles today and E85 is what goes into our flex-fuel vehicles. If you are wondering if you have a flex-fuel vehicle or not, just look at the fuel cap, if it is yellow, go ahead and fuel up with E85.”

The effort is ultimately about choice, and giving Ohio’s fuel consumers the opportunity to buy ethanol beyond the barrier of the blend wall.

“Our initiative was to give consumers choice. The problem was that we just did not have enough places where people could choose ethanol,” Nicholson said. “There are seven ethanol plants in Ohio going strong and they consume about 200 million bushels of Ohio-grown corn every year, so it is a fantastic success story for Ohio’s farmers. The Corn Checkoff partnership with the ODA and the nearly $5.5 million in Ohio helps solve that problem of choice for consumers.”