Some ethanol producers are selling E85 directly to drivers like you and me. It seems they take the phrase, cutting out the middleman, very seriously!
Thanks to reader emails and comments, I’ve now written a handful of news stories and blogs about E85 prices and direct-to-gas retailer sales from ethanol producers. Today I’m going to blog about a related topic, ethanol plants that actually sell ethanol blends directly to consumers.
In the process of writing about the Yellow Hose program at Carbon Green Bioenergy LLC, Mitch Miller, CEO of the 50 MMgy plant, told me about the on-site blender or flex-fuel pump the company paid about $100,000 to install. I have to admit, I was a little skeptical about the idea of an ethanol producer selling its fuel directly to drivers. My initial thought was that producers should make the fuel and leave selling it to gas retailers. But Miller made a believer out of me.
The company had tried to convince a gas retailer in the immediate area around the plant to sell E85 and other blends, but without the success it has had with retailers a bit further out. As a result, the employees and area corn farmers kept asking Miller when he was going to sell E85 at the ethanol plant. “I had requests for it weekly,” he said. So, Carbon Green installed a pump, which dispenses E10, E15, E30 and E85 24 hours a day to customers with a credit card.
Miller encourages other ethanol producers interested in increasing local E85 availability to first work with existing retailers on purchasing the fuel directly from the plant. The reality is, if there’s already a nearby retailer selling E85, there’s probably not a need for one at the ethanol plant. “But if you strike out there, which a lot of us have, then build it yourself,” he told me.
At Carbon Green, the project had surprising financial success. Although the company originally anticipated only selling a few hundred gallons of fuel a day, it now averages sales of about 1,000 gallons a day, Miller said. As a result, installing the equipment had a quicker than expected two-year payback.
In case you are curious, drivers overwhelmingly choose E85 at Carbon Green’s on-site pump. More than 80 percent of sales are for E85 while another about 15 percent are E30, Miller said.
A side benefit to having an on-site blender pump is that it provides visuals during plant tours for gas retailers interested in purchasing E85 directly from the ethanol plant. The company has brought quite a few area retailers to its facility to talk to them about how and why they should add E85 and other higher ethanol blends to their sales mix.
The fact that the company installed the tank above ground means retailers can easily see how blends from E10 all the way up to E85 are piped to the pump. “It’s a very simple project but seeing it all above ground is powerful for your customers and gas station owners,” he said.
Since I’m always on the lookout for future story ideas for the print magazine, I asked Miller if he knew of other ethanol producers that are selling E85 and other blends directly to drivers. We’ve written feature stories about direct-to-retailer sales programs, but haven’t dug into this topic as much. Miller listed off a few other ethanol plants that he knows of with on-site flex-fuel pumps as well as a couple ethanol producers that have installed pumps at other, nearby, locations. In fact, one producer even built a full truck stop, he said.
This is a topic I’m very interested in writing more about in the future. So if you know of an ethanol producer doing something like this, please drop me an email at hjessen@bbiinternational.com. I’m looking for producers to interview as well as an idea of how widespread this is across the industry.
