U.S. Fuel Terminal Operator To Offer Higher Ethanol Blend

Source: By Chris Prentice, Reuters • Posted: Thursday, July 21, 2016

NEW YORK, July 19 (Reuters) – Midwest fuel terminal operator HWRT Oil Company LLC will become the first U.S. company to sell pre-blended fuel with 15 percent ethanol content in the coming months, the latest sign that more of the biofuel is making its way to the gas pump.

HWRT will begin selling the preblended fuel out of its four terminals in Illinois, Arkansas and Indiana in mid-September, the company said on Tuesday, a move that follows announcements by fuel retailers including Power Energy Corp and Thorntons that they will add pumps to sell higher ethanol blends in the Chicago area.

“As more and more retailers have the equipment to handle E15, we want to be able to supply them,” Matt Schrimpf, president of the Illinois firm, said in a phone interview.

HWRT has been selling E85, a fuel with up to 85 percent ethanol content, for several years, Schrimpf said.

Nearly all U.S. gasoline is blended with 10 percent ethanol, according to the U.S. government. E15 contains anywhere from 10.5 to 15 percent ethanol.

In its battle against Big Oil, getting higher blends to consumers has been a years-long struggle for the biofuels industry. Renewable fuels companies like Pacific Ethanol Inc and Green Plains Inc have pressed U.S. regulators to boost annual requirements for use of renewable fuels like ethanol in gasoline.

The move by HWRT is a “game changer that can help expand the market for E15 overnight,” said Robert White, the Vice President of Industry Relations for the Renewable Fuels Association.

The boost in use of biofuels has been largely driven by the over decade-old Renewable Fuel Standard (RFS) program. Ethanol producer Archer Daniels Midland Co has said that regulators are underestimating the amount of higher blends in the market.

The U.S. Department of Agriculture has spent millions of dollars to help gas retailers overhaul tanks and pumps to be able to offer higher ethanol blends.

Biofuels advocates are suing the U.S. Environmental Protection Agency (EPA) for setting annual requirements for use below 2007 requirements targets out by Congress. (Reporting by Chris Prentice; Editing by James Dalgleish)