With gas prices rising, sales of cheaper, ethanol-blended fuels are surging in California

Source: By Steve Scauzillo, San Gabriel Valley Tribune • Posted: Tuesday, October 2, 2018

Patty Ulloa fills her Chrysler 300 with E85, a different form of fuel made of ethanol and gasoline at Propel Fuels in Fullerton on Tuesday, Sept. 4, 2018. Many car owners don’t realize they can use the less expensive fuel. (Photo by Kevin Sullivan, Orange County Register/SCNG)

Pull into a filling station and the only consumer option is gasoline at varying octanes. In other words, put aside the gimmicky apps, grocery store tie-ins and loyalty games and it’s all about buying fossil fuels.

But in about 190 stations in California, there exists an alternative: One lone, usually green-colored nozzle delivering E-85, an alcohol blend accepted in 1.3 million “flexible-fuel” vehicles on California roads today.

At 85 percent ethanol and 15 percent gasoline, E85 fuel packs a powerful 103 octane rating, burns more efficiently and reduces your car or truck’s carbon footprint by nearly one-third as compared to gasoline or diesel. Oh, and it’s around $1 a gallon cheaper than gasoline.

E85 is experiencing a resurgence in California, with sales volumes more than tripling in the last five years.

As gasoline prices climb along with the spike in crude oil, E85 producers are ramping up from 6.5 million gallons in 2012 to nearly 24 million gallons last year, according to the California Air Resources Board.

“I tell my wife we are growing faster than Amazon. We are growing like crazy,” said Mike Lewis, co-founder of Pearson Fuels based in San Diego. Pearson E85 sales jumped 56 percent from 2016 to 2017.

With 150 of the 190 stations, they sell about 70 percent of E85 in the state, he said.

Green conscience, pocketbook issues

What’s driving the spike is anyone’s guess. Lewis says the fuel has reached critical mass.

He also says he’s added enough pumps at traditional Big Oil stations (his fuel is mostly in Chevron and Phillips’ 76 gas stations) to break through to a larger customer base. And he’ll be adding another 30 sites by the end of this year, he said.

Antonio Harrison filled up his Chevy Silverado with E85 at a franchised Chevron station in Temple City on Sept. 19.

“I drive a pickup truck and people look at me and say it is more polluting. So I figured, if I’m going to drive a pickup, why not be more environmentally conscious?” he said.

At a buck less per gallon of regular gasoline, he saved $23 on that fill-up.

“It is definitely helping me keep more money in my pocket,” he said.

Patty Ulloa fills her Chrysler 300 with E85, a different form of fuel made of 85 percent ethanol and 15 percent gasoline at Propel Fuels in Fullerton on Tuesday, Sept. 4, 2018. Many car owners don’t realize they can use the less expensive fuel. (Photo by Kevin Sullivan, Orange County Register/SCNG)

The fuel reduces smog-forming emissions such as carbon monoxide by 20 percent and particulates by 34 percent.

The cut in greenhouse gases is between 27 and 34 percent less on average, according to Lewis, Propel Fuels and state sources.

A study commissioned by ethanol producers based on the U.S. Department of Energy numbers placed the reduction in CO2 between 19 percent and 52 percent, depending on the vehicle.

In 2012, 13.2 billion gallons of ethanol were burned, a reduction in greenhouse gases from on-road vehicles of 33.4 million tons, equivalent to removing 5.2 million passenger vehicles from the road for one year, the study concluded.

The ‘workhorse’ of state regulations

The state’s Cap and Trade program requires those that pollute to pay into the fund. And often, Pearson and other ethanol blend fuel distributors reap the rewards of large gasoline refineries’ payouts.

CARB’s low-carbon fuel standard — a cap and market-based program that requires incremental reductions in the carbon content of transportation fuels through 2020 by adding renewable fuels or buying and selling credits — helps to incentivize low-carbon transportation fuels.

The electric car movement gets all the press, says Pearson, since EVs are the least-polluting method of transportation.

“But not everybody can afford a $150,000 Tesla,” he said (the upper price of the Model S, while the Model 3 high-performance versions being sold today are between $54,000 and $65,000). “While people are enamored with electric cars, we are the workhorse of the low-carbon fuel standard.”

Propel Fuels, a company about 10 years old that started in Seattle but now is headquartered in Sacramento, has about 33 stations in California and 14 of those in Southern California, from Ontario to Arcadia.

Rob Elam, CEO of Propel Fuels, said during an exclusive interview Tuesday, Sept, 25 that his company places E85 in oil company gas stations but has developed brand loyalty to customers who want to help the environment and save money.

He would not say where, but said the company would be adding sites in 2019.

“Our customer is not a Tesla customer,” Elam began. “He is a middle income, average Californian. We are giving people an affordable, low-carbon option today. Right now. In a way that doesn’t cost them a lot of money, without buying an electric car and figuring out how to charge it.”

Downside of ethanol

Compared to high-octane gasoline, E85 reduces fuel mileage between 10 percent and 29 percent, Lewis said.

That’s the main reason why Frank Tran, of Glendora, stopped using E85 in his minivan.

“I got like 25 percent less gas mileage. I had to fill-up a lot more often,” he said while filling his car with gasoline at a 76 Station in Arcadia on Sept. 19.

Lewis said the drop in gas mileage can be less with newer cars that operate more efficiently but said it is a reality with the alcohol-based fuel.

Freddy Jaramillo, 58, has been using E85 in his black Ford F-150 for a year. With its eco-boost engine, he notices better performance and a cooler engine.

“I get 22 mpg in the city and on the open road, on the 605 Freeway I’m getting 27 mpg,” he said while pumping E85 into his black truck’s fuel tank on the same day as Tran.

Made in America

Buying American fuels made out of corn grown in Iowa and Nebraska and blended in California appeals to many consumers, Lewis said.

“It is fuel from the United States instead of Saudi Arabia,” he said. “Plus, it is renewable. So you are not depleting a resource.”

Elam said his customers — polls show a majority of Californians — want their consumer choices to help the environment.

And he criticizes Chevron, Exxon Mobil, Tesoro, BP and others for not addressing global warming, which is causing sea levels to rise and intensifying storms, such as the recent Hurricane Florence.  Storms have become more frequent and more damaging, a factor contributed to global climate change according to a majority of climate scientists.

The Western States Petroleum Association did not address questions about E85. A spokesperson said the trade group could not comment on proprietary fuels such as ethanol blends made by Propel and Pearson.

“The cost of carbon will accelerate. That will make fossil fuels more expensive. So that creates a huge opportunity for low-carbon systems,” Elam said. “The oil industry is flying high if oil reaches $100 a barrel. But they have done nothing to address the human health impacts.

“People care about carbon impacts and about bad air and especially the younger generation who wants a better product.”