Prime the Pump seeks to expand E15 infrastructure

Source: By Susanne Retka Schill, Ethanol Producer Magazine • Posted: Friday, December 12, 2014

The fate of the Chicago E15 ordinance is still unknown. Passed by the city council’s finance committee on Monday, a vote by the full council was deferred Dec. 10 for at least a month. The ordinance would require that many gas stations within the city offer E15 to consumers.

The deferral was expected, explained Prime the Pump Chairman Ray Defenbaugh, adding it will unfortunately give the oil industry’s aggressive advertising campaign more time to try to influence public opinion. Prime the Pump has committed $10 million to pay for retailers’ retrofit costs in the city. The ordinance would exempt small-volume retailers, marinas and any stations that would need to install new tanks.

Prime the Pump was formed in February as a 501(c)6 nonprofit organization to pool industry resources to expand E15 and higher ethanol blends by offering grants to interested retailers. Keeping a low profile, so as to not tip its hand to opponents, the program is getting good results, Defenbaugh told Ethanol Producer Magazine. “It has been received very well,” he said. That includes both sides of the equation—both industry support in contributing funds and retailer interest from across the country in applying for grants. He also stressed that retailer interest has been shown from several regions, including the northeast, south and west.

Prime the Pump was formed following a successful effort by a handful of ethanol companies to facilitate the addition of E15 by Southeastern convenience store operator, MAPCO Express Inc. Archer Daniels Midland Co., Poet LLC and Big River Resources were the primary supporters of that effort.

The Prime the Pump program is broadening that effort. Defenbaugh serves as chairman of the five-member board, which includes Gary Towne, ADM; Jon Holzfaster, National Corn Growers Association; Jeff Broin, Poet; and Todd Becker, Green Plains Inc. Ethanol producers have contributed a quarter-cent-per-gallon of ethanol production to the fund, other funds have come from corn growers associations and industry providers.

The program is focused on expanding E15 and higher blends through grants to retailers or organizations with promotional plans for the ethanol blends. With many state programs assisting individual retailers, primarily in the Midwest, Prime the Pump is aimed at retailers with high volumes and multiple locations. Retailers have to commit to a five-year program, E15 must be offered at all dispensers under the canopy, signage on the street must include E15 and retailers must agree to actively promoting the fuel.

When Prime the Pump was introduced to the industry, Defenbaugh said they agreed that after three years, any unspent funds would be returned on a prorated basis to the contributors. That won’t be necessary for the first round, as all of the funds from the initial draw have been committed, Defenbaugh said, which includes the Chicago E15 commitment. A second round of funding requests has been positive, he added. And, on the retailer side, the retailers have been coming forward. “They know it is a limited program, so they don’t want to miss out.”