Growing Minnoco Gas Station Brand is Fueled by Independent Operators
September 13, 2015
By David Schaffer
The gas station at Penn Avenue and 67th Street in Richfield has carried various names over the past 50 years — Conoco, Mobil, U.S. Oil and others — as owners changed or marketing contracts lapsed.
Now, after two decades of local ownership by businessman Mark L. Olson, the station has been reborn as a local brand: Minnoco.
Across the Twin Cities region, 19 independent gas station owners like Olson have become Minnoco retailers in the past two years, freeing themselves from big oil companies while cutting costs and launching group marketing efforts. More Minnoco stations are coming.
“This is bringing together the independent operator that can’t put ads in the newspaper or on radio and TV,” said Olson, who converted his station to Minnoco in early August. “It brings everyone together to market the brand just like an SA [SuperAmerica] or a Holiday. That is what we are trying to do.”
Under the business model, station owners invest in their own station refurbishments and engage in joint marketing. Minnoco offers coupons for discounted gas and other products via newspaper inserts, social media, e-mail and minnoco.com. It plans an instant rewards program and a fundraising effort for a breast cancer charity this fall.
Minnoco was created by the Minnesota Service Station & Convenience Store Association, an industry trade group. Lance Klatt, executive director, said the goal is to get at least 50 stations under the Minnoco brand.
“We can market our brand how we want,” Klatt said. “It is a business model that makes sense. There are a lot of independent retailers that are hungry for a new image, the opportunity to control their own brand and to bring new fuel to the marketplace.”
The stations also gain from the buy-local movement. “You look at the logo and you know it is a Minnesota company,” said Michael Porter, an adjunct faculty member in marketing at the University of St. Thomas Minneapolis campus.
And in a nod to renewable fuels, Minnoco’s mostly green logo features a plant leaf.
Among the first to offer E15
Renewable fuel is an important piece of the Minnoco story, and it underscores the changing landscape of gasoline retailing.
All but two of the Minnoco stations sell “Unleaded Plus,” or E15, a blend of 15 percent ethanol and 85 percent gasoline that can be used in 2001 and newer cars and trucks. The price typically is 10 cents less than regular fuel, which is 10 percent ethanol.
The ethanol industry has been trying to get more gas stations to sell E15, but it’s a challenge because oil companies have little incentive to upgrade pumps for renewable fuel blends that cut petroleum’s market share. So ethanol and corn-producer trade groups now offer grants to help stations with pump upgrades to sell a range of ethanol blends.
“It’s cleaner and it’s cheaper and the performance and fuel mileage is the same as regular gasoline if not better,” said Joel Hennen, who owns the Shakopee Minnoco station and is chairman of the Minnoco board of directors.
Big oil companies like BP, ConocoPhillips and ExxonMobil once owned gas stations, but have divested them over the past decade. Their names remain on about half of the nation’s gas retailers because they fund station improvements under long-term marketing deals.
Minnoco stations aren’t the only ones getting help from the renewable fuel industry to introduce E15, and higher ethanol blends like E30 and E85, which are for flexible-fuel vehicles. Mike O’Brien, vice president for market development at Growth Energy, an ethanol industry trade group, said other U.S. regional retailers adding such blends are Sheetz, Kum & Go, and Murphy USA.
“In order to get E15 into the marketplace, you have to go around the established markets,” said O’Brien, who is based in Minnesota.
Soon E15 will get another push from the U.S. Department of Agriculture, which is handing out $100 million in grants to upgrade 4,880 of pumps across the country. Of 21 states tentatively approved for grants last week, Minnesota is slated to get the third-largest share, enough for an estimated 620 pump upgrades.
Benefits, hidden and not
Station owners cite other benefits of severing alliances with big oil companies.
One plus is that stations are free to purchase gasoline from wholesalers at market prices generally lower than those offered by big oil brands, they said. This helps the stations compete against other convenience store chains, which already benefit from wholesale purchasing.
At major-brand stations, the independent owner is “essentially obligated to buy their gas and you can be roped in for seven to 15 years,” said Rick Bohnen, who converted one of his two stations on Penn Avenue in Minneapolis to a Minnoco. His other station is a BP.
Bohnen said Minnoco stations also get a break on credit card swipe fees, which can be a major expense at stations, typically costing 2.5 percent of every sale.
Porter, of St. Thomas, said that rebranding under the Minnoco logo can help station owners avoid the fallout from disasters like the 2010 BP Deepwater Horizon explosion and oil spill in the Gulf of Mexico or the 1989 Exxon Valdez tanker grounding and oil spill off the coast of Alaska.
After such disasters, some consumers turn away from that oil brand, choosing to fill up elsewhere.
“Minnoco is closer to a hometown brand, and it is less likely to take the backfire from a Deepwater Horizon spill,” Porter said. “You are insulating yourself from that kind of backlash.”
Read the original story: Growing Minnoco Gas Station Brand is Fueled by Independent Operators
Ethanol Supporters Respond to Spate of Misinformation
September 1, 2015
By Susanne Retka Schill
Ethanol supporters are responding to a new round of misinformation about ethanol.
Before Labor Day, the Boat Owners Association of the United States announced the results of an informal survey that found a “vast majority” want ethanol-free gas, but only about half of respondents say it is available at marinas and gas stations. The news release went on to say “to keep up with the RFS mandate, in 2010 the EPA permitted E15,” and that, though it is prohibited for use in marine engines and other small engines and vehicles made before 2001, “it can now be found in 24 states.” The group encouraged boaters and small engine owners to ask Congress “to amend the RFS to ensure future gasoline supply in the U.S. works for all engines.”
The Renewable Fuels Association released a statement assuring boat owners that E10 is safe for boat engines. “The poll results are, unfortunately, a clear indication that the myths surrounding boating and ethanol continue to exist,” said Bob Dinneen, president and CEO. “The National Marine Manufacturers Association has engaged in a relentless misinformation campaign regarding E15 and, in doing so, has confused the issue. It is simply not true that ethanol and boat engines do not mix. E10 is safe for boat engines. In fact, every boat manufacturer warrants the use of ethanol-blended fuel with up to 10 percent ethanol. So boaters should not have any worries about filling their engines with E10 over the Labor Day holiday.”
The American Motorcycle Association sponsored its own poll “that finds likely 2016 voters have widespread and serious concern about ethanol’s unintended consequences—including damage to engines, land conversion and food prices.”
The findings cited in the association’s news release included:
“Poll results show that a majority of voters nationwide have serious concerns about the effects of the RFS: - 78 percent of those polled had serious concerns that higher blends of ethanol such as E-15 can cause severe damage in cars, motorcycles, boats, lawn equipment and other small engines. - 73 percent of polled voters had serious concerns about an EPA analysis showing that emissions that contribute to climate change are 28 percent higher from corn ethanol than pure gasoline. - 77 percent of those polled had serious concerns about corn ethanol production consuming 34 times more water than pure gasoline. - 80 percent of polled voters had serious concerns about how diverting corn to produce ethanol could increase food prices.”
Responding to similar distortions, Mark Rauch at The Auto Channel wrote a comprehensive critique to “expert” advice being given by automotive media personality Lauren Fix on a recent interview on the radio Jacki Daily Show. The lengthy blog, “Lauren Fix Takes Ethanol Opposition To New Level Of Stupidity,” responds to specific errors in detail regarding such things as ethanol not being used in race cars, corrosion issues and phase separation, among other things.
Read the original story "Ethanol Supporters Respond to Spate of Misinformation"
DENCO II Received DEED Grant
August 29, 2015
By Ellie Musselman
MORRIS, Minn - The Minnesota Department of Employment and Economic Development (DEED) has awarded Morris-based ethanol plant DENCO II a $750,000 grant to purchase three pieces of equipment intended to increase energy efficiency.
Mick Miller, DENCO II General Manager, told the Morris City Council this past week that the company will add a fifth fermentation tank, an additional hammer mill, and an addition to the plant’s cooling tower. The total project will cost between $1.5-1.6 million. The grant will go through the city, Miller told councilmembers, “the matching portion will come privately from Denco II. There will be no expenses on the city.”
This is the second grant awarded by DEED to the company through the plant’s public-private partnership with the city. The city will own the equipment for twelve years before ownership passes to DENCO II. The project qualifies for DEED funding because its goal is to maintain or increase employment in Morris. The plant currently has 35 full time employees.
A resolution to call for bids on the project was unanimously approved by the city council. Mayor Sheldon Giese said, “It’s always a win-win when we can work with local businesses.”
Read the original story: "Denco II Received DEED Grant"
Minnesota Poised to Play a Role in Next-Generation Heating Oil
August 21, 2015
By the Minnesota Soybean Research and Promotion Council
While the leaves on the trees have yet to turn color, and the cold blast of winter remains a distant memory to some, the change of seasons could yield new economic opportunities for Minnesota’s biodiesel industry.
At a forum sponsored by the Minnesota Soybean Research and Promotion Council, attendees listened as a diverse group of energy influencers described Bioheat, a blend of biodiesel and heating oil, as a 21st century heating oil that promises to increase the diversity of the U.S. energy supply. In the soybean fields of Minnesota, farmers are growing that diversity.
“Biodiesel has earned its stripes as a transportation fuel,” said Tom Slunecka, CEO of the Minnesota Soybean Research and Promotion Council. “The heating oil market represents an exciting opportunity for Minnesota to continue its role as a leader in renewable energy.”
New markets and uses for biodiesel offer significant potential for U.S. soybean farmers and the entire biodiesel industry. Within the biodiesel market, soybean oil has a 50 percent share. Heating oil is well established in many of the New England states such as Maine, Vermont and New Hampshire as heating oil has traditionally provided an economical way to meet the heating needs of homes, multifamily dwellings, and small businesses. A homeowner can use 1,000 gallons over the season. Bioheat has positive environmental attributes. According to a report released by the National Oilheat Research Alliance, biodiesel blends at 20 percent (B20) with ultra-low sulfur heating oil are lower in greenhouse gas emissions (GHG) than natural gas when evaluated over 100 years, while blends of 2 percent (B2) or more are lower in GHG than natural gas when evaluated over 20 years.
The report also found that biodiesel blended at 5 percent would require approximately 300 MMgy. Assuming the biodiesel industry average of 50 MMgy per plant, Bioheat would be responsible for six plants built and continuously operated. Thus, nearly 270 full time jobs can be directly attributed to Bioheat.
“Biodiesel blending into home heating oil has proven to be a winner,” said Paul Nazzaro, CEO of the Nazzaro Group and advisor to the National Biodiesel Board. “With a decade of technical and market positioning on the record, continued support from biodiesel stakeholders like Minnesota Soybean will be imperative to keep this momentum intact to ensure biodiesel producers have a healthy and growing market to move their production allocations long term.”
Read the original story: Minnesota Poised to Play a Role in Next-Generation Heating Oil
Poet Releases First-Ever Economic Impact Study
By Poet LLC
August 13, 2015
Poet LLC, one of the world’s largest ethanol producers, released its first-ever economic impact study, revealing the significant impact Poet made to national economic growth and job creation in 2014, including:
- Generating a total of $13.5 billion in sales for U.S. businesses;
- Adding $5.4 billion in national gross domestic product;
- Supporting an estimated 39,978 full time jobs; and
- Contributing $3.1 billion in income for American families.
The report further details Poet’s contribution to the economic prosperity in each of the seven states where it operates—South Dakota, Minnesota, Iowa, Missouri, Indiana, Ohio and Michigan. Poet, which is headquartered in Sioux Falls, South Dakota, operates a total of 27 dry mill corn ethanol plants with an annual capacity of 1.7 billion gallons—more than 11 percent of the total U.S. ethanol output.
“Ethanol provides us the means to produce our own clean fuel and keep the enormous economic benefits within America’s borders,” said Poet CEO Jeff Lautt. “The impact flows from the plants to farmers, communities, throughout the states in which they operate and across the nation.”
In addition, the report cites Poet’s impact on reducing foreign oil dependence. According to the study, Poet’s production of 1.7 billion gallons of ethanol displaces nearly 1.2 billion gallons of gasoline, which requires 61 million barrels of crude oil to produce. This displacement potentially reduces the outflow of money to foreign producers of oil by nearly $5.5 billion.
The use of Poet ethanol also reduces greenhouse gas emissions relative to gasoline. Burning a gallon of ethanol opposed to gasoline results in a 35 percent reduction of carbon dioxide (CO2) emissions. Reflecting this, the production of 1.7 billion gallons of Poet ethanol cuts CO2 emissions by approximately 874,000 metric tons.
Poet employees, stakeholders, family and friends are celebrating the announcement today at a series of Poet Ethanol Day events in its operating states, where attendees can enjoy food, activities and hear from local officials.
To read the full report and find additional information on state-level data, please visit: http://www.poet.com/impact.
And read the original story: Poet Releases First-Ever Economic Impact Study
UAI: Removing ethanol from gasoline increases toxic emissions
July 29, 2015
Many gas stations are promoting E0, or gasoline with zero percent ethanol. It not only costs more than regular gasoline that contains 10 percent ethanol, new data shows it also burns dirtier in your engine which then puts more toxic emissions into the air.
Urban Air Initiative tested every E0 in Wichita, Kansas, and compared them to regular gasoline that contains 10 percent ethanol. The testing found toxic aromatics such as benzene and toluene were about 45 percent higher with E0. Benzene and toluene, which are known carcinogens, are added by oil refineries to boost octane in vehicles. However, these toxins create harmful emissions that cause air pollution which impact public health.
Click here for short video demonstrating UAI’s findings
UAI knows this isn't just a problem in Kansas. A recent study by the group Clean Fuels Omaha also found higher toxic emissions in Omaha, Nebraska with E0 compared to regular gasoline or E10.
The data is clear; adding ethanol to gasoline reduces toxic emissions, improves air quality and our health.
Read the original story here: UAI: Removing ethanol from gasoline increases toxic emissions
Ethanol to Help Fuel 75th Sturgis Motorcycle Rally
July 27, 2015
By Cindy Zimmerman
The Renewable Fuels Association (RFA) will once again partner with the Buffalo Chip Campground at the 75th annual Sturgis Motorcycle Rally, which will be held Aug. 3-9 in Sturgis, South Dakota. More than 1.5 million motorcycle enthusiasts are expected to attend the event this year for the big anniversary and RFA Vice President for Industry Relations Robert White the event offers a perfect venue to dispel some of the misconceptions about the use of ethanol blended fuel in motorcycles.
“We do that around the “Free Fuel Happy Hours,” said White. “From Sunday August 2nd through Thursday August 6 from 1 to 4 pm, any motorcyclist can come up and fuel for free with 93 octane 10 percent ethanol.” This is the fourth year that RFA has sponsored the free fuel happy hours and White says it also offers them the opportunity to talk one on one with bikers and provide them with information about ethanol.
In addition, White says messages about ethanol can be found throughout the Buffalo Chip Campground during the rally. “We have everything from banners to commercials on the Jumbotron at the main stage and we sponsor the Essentials Guide that goes out to every camper this year,” said White.
The event sponsorship has become more important in the last 2-3 years as the oil industry has worked with the motorcycle association to spread misinformation about 15% ethanol, which is not approved for use in motorcycles – a fact which is stated clearly on all pumps that sell E15. But White says the information they provide goes beyond motorcycles. “If there is 1.6 million or more people there, they all own lawnmowers, cars, trucks, SUVs, boats back at home,” he added.
Read the original story here: Ethanol to Help Fuel 75th Sturgis Motorcycle Rally
EPA Administrator to corn farmers: [Our RFS] delay…was disruptive to say the least. I apologize for that.”
July 27, 2015
By Jim Lane
In Washington, EPA Administrator Gina McCarthy addressed the Corn Congress and said that ““you might’ve heard we’re trying to shrink or kill this [RFS] program. But the truth is, we’re committed to growing it. The volumes we’ve proposed for 2015 and 2016 are designed to bust through the blend wall.” She added that “our proposed 2016 standard for total renewable fuel is about 1.5 billion gallons more — almost 10% higher — than the actual 2014 volumes,” she added. “And the proposed 2016 standard for cellulosic ethanol is six times higher than what the market produced in 2014. So EPA isn’t just promoting growth; we’re pushing the envelope.” The agency’s comments period for the RFS comes to an end today (July 27), and the EPA has committed to finalizing the 2016 Renewable Fuel Standard by November 30th.
The Administrator added, “We know the delay last year in getting these standards out was disruptive to say the least. I apologize for that.”
Read the original story here : EPA Administrator To Corn Farmers : [Our RFS] Delay...Was Disruptive To Say The Least. I Apologize For That
Walz Visits Guardian Energy in Janesville, Highlights All-American Energy as Middle Class Economic Engine
July 17, 2015
Today, Congressman Tim Walz visited local biofuels plant, Guardian Energy in Janesville, to highlight the importance of the Renewable Fuel Standard (RFS) and all-American energy solutions as a driver for the middle class economy.
“It’s places like this that increase our national security, grow our local economies, and create jobs and prosperity for the middle class,” Walz said. “We have the best economy in the country here in Minnesota. That doesn’t mean we get to rest, it means we have to work even harder to keep it that way. And energy production will play a major role pushing our economy to new heights. That’s why the RFS is so important. It’s working to help middle class Minnesota families, while reducing our dependence on foreign oil at the same time.”
According to the Minnesota Bio-Fuels Association, in 2014, the ethanol industry in Minnesota:
- Supported 18,630 jobs
- Contributed $2.34 billion to the state’s GDP
- Generated $7.6 billion in gross sales
- Generated $1.74 billion in household income
- Contributed $132 million to state and local communities through taxes
“Congressman Walz’s visit today highlights his commitment to clean renewable biofuels and the RFS,” Tim Rudnicki, Executive Director of the Minnesota Bio-Fuels Association, said. “Thanks to the RFS, Minnesota’s ethanol industry contributes over $2 billion a year to the state’s economy, supports nearly 20,000 jobs, and reduces CO2 emissions as well as our dependence on foreign oil.”
The Minnesota Bio-Fuels Association notes a University of Illinois study that found, E10 (fuel with 10 percent ethanol) reduces 712,000 metric tons of CO2 emissions annually in Minnesota. If all gasoline (currently E10) consumed in Minnesota (2.4 billion gallons per year) was switched to E15 (fuel with 15 percent ethanol), an additional 358,000 metric tons of annual CO2 emissions will be eliminated. According to the EPA’s greenhouse gas equivalencies calculator, the combined total of CO2 savings of 1.07 million metric tons is the same as removing 225,895 vehicles from Minnesota’s roads.
“As we strive to move towards and energy independent future, we’ll need to utilize all our sources of homegrown energy. This includes biofuels, wind, and solar, among others,” Walz continued. “I firmly believe Minnesota is positioned to lead the world in clean, all-American energy production. Let’s find ways to seize on this opportunity, create jobs, and continue to push our economy forward.”
Corn Growers To Rally For Ethanol on Capitol Hill
July 15, 2015
By Amy Bickel
Ness County farmer Dennis McNinch is among the nearly 300 corn growers who will rally on Capitol Hill on Wednesday with this message to the EPA - don't reduce ethanol mandates.
After all, the longtime Kansas grower touts, he has seen how ethanol has helped the economy - providing rural Kansas jobs and boosted corn prices - including at elevators near his west-central Kansas farm.
It's also a cleaner-burning, American-made fuel, he said.
Yet the Environmental Protection Agency announced plans in May to reduce renewable fuels requirements by nearly 4 billion gallons in 2015 and nearly 5 billion gallons in 2016.
Such shifts, McNinch and other Corn Belt farmers say, could reduce all of those attributes that have been a boon for rural America - which, largely, has been struggling with population declines since World War II.
The proposal has brought about backlash from farm country. Two weeks ago, hundreds of supporters rallied in Kansas City amid a EPA public hearing on the proposed reductions, said Sue Schulte, with Kansas Corn. She said of the nearly 300 who testified to EPA officials, about 85 percent spoke in favor of keeping the standards set forth by Congress in 2007.
Round two of the "Rally for Rural America" - takes place Wednesday - which coincides with the National Corn Growers Association's Corn Congress, Schulte said.
"We just want to reinforce our stand and commitment with our legislators about putting pressure on the EPA to revisit their stance on RFS - getting it returned back to what the law has requires," McNinch said.
Prime the Pump
The Renewable Fuel Standard - or RFS - mandates oil companies to use certain levels of biofuels. It also encourages industry growth and aims to cut greenhouse gas emissions.
The proposed new standards would require 16.3 billion gallons of renewable fuels to be used this year, down from 20.5 billion set by Congress in 2007, and 17.4 billion gallons next year, down from the 22.2 billion gallons.
EPA officials say the reduced standards are largely proposed because of inadequate infrastructure - such as the need for more pumps of higher blends - as well as concern about farmers' abilities to meet the demand.
Chris Grundler, the EPA's director of transportation and air quality, told the Associated Press in June that there is no way the standards can be met in the next few years unless they are reduced.
“There would be widespread noncompliance, and the EPA is not in the habit of putting out standards we don’t think are achievable,” he said.
McNinch, who is on the NCGA's Ethanol Action Team, said the industry is making strides to address those issues, which includes the Prime The Pump campaign.
The campaign's goal is to increase infrastructure in the marketplace so consumers have access to higher level ethanol blends, he said. Different groups, including ethanol plants and corporations, have donated funds to help offset the cost for fuel companies.
According to its 2015 budget goals report, the Kansas Corn Commission has projected spending $100,000 toward the campaign.
"The key going forward is we have to do a better job of educating the public about the benefits of ethanol - that it is a safe product for the engine, that it is cleaner burning fuel and it has created jobs in rural America as well as demand for our product," he said.
Public comment sought
The agency will make a final determination on the standards in November, said Kansas Corn's Schulte. The EPA is taking public comments through July 27.
The Capitol Hill rally, she said "will give us an opportunity to reach out to the Congressional delegation all over the nation."
White Cloud farmer Ken McCauley, a former NCGA president who was in Washington briefly Tuesday, said ethanol lowers gas prices by a $1 a gallon "and maybe more."
He was among the few hundred who testified in Kansas City. He told the EPA the the RFS has boosted rural communities and farm incomes across the United States more than "any other rural development effort I can think of."
Kansas has 12 ethanol plants that produce about 550 million gallons per year. Current Kansas production creates a market for about 183 million bushels of sorghum and corn, according to the Kansas Corn Commission. According to 2010 numbers, the industry pays more than $750 million to Kansas farmers for their grain.
"To lower the volumes of the RFS today would set back this economic engine dramatically and put rural America in a tailspin," he testified.
McCauley said farmers are growing enough corn to meet the demand, and if the demand is lowered, prices could decline.
"Farmers are gearing up to produce enough corn in 2015 and beyond," he said. "They shouldn't be messing with this - pulling it back."
"We don't need a setback like this," he said.
Read the original story here.