In the past few weeks, we have been working with state lawmakers to advance a bill that would provide partial funding for fuel retailers to make the necessary infrastructure upgrades to offer E15. This initiative holds the potential to strengthen market signals to speed the adoption of E15 in Minnesota.
Let’s be clear, MN Bio-Fuels has long held the position that it is the duty and obligation of the petroleum industry to provide the necessary fueling systems to offer at least E15 to Minnesotans.
But 13 years after the RFS and the Minnesota Petroleum Replacement Law (which calls for 30 percent biofuel by 2025) and the availability of E15 for eight years, only 10 percent of fuel retailers offer E15.
Rather than make the necessary infrastructure investments, big name fuel brands have divested many retail stores and shifted the costly infrastructure burden to the local retailers. So, despite the higher standards called for in the laws mentioned above, fuel retailers have not significantly increased access to renewable ethanol.
In the first Biofuel Infrastructure Partnership under the USDA, the fuel retailers that participated in the program did upgrade their storage and dispensing equipment to offer E15 and higher blends. With the better value E15 at these retailers, some competitors in a stronger financial position adapted their existing fuel systems so they could compete by offering E15.
But, there are only 384 fuel retailers, out of about 3,300, offering E15 in Minnesota. To put a finer point on this matter, based on the National Renewable Energy Laboratory’s study on E15 market penetration, Minnesota needs approximately 660 stations offering E15 to attain an adequate market presence to make E15 the new standard. By providing some infrastructure funding assistance to fuel retailers through this proposed bill, we could get closer to that number.
As for the previous EPA’s proposed rule to change underground storage tank rules, does the proposed rule actually remove the barriers to E15? We are in the process of ascertaining the potential effect of the rule given the prevalence of secondary containment systems for underground storage tanks and pipes in Minnesota.
Moreover, the underground storage tank is only one part of the fuel distribution system. The compatibility of dispensers must still be addressed. If the underground storage tank is eliminated as a barrier to E15, dispensers will still need to be brought into compliance.
As such, in light of the ambiguity in the proposed rule by the EPA and other existing barriers in the market, the aforementioned infrastructure bill is essential to expanding access to E15 in Minnesota. And this initiative can augment all efforts to make E15 the new standard in Minnesota.