Pre-Blended E15 Offered

OMAHA (DTN) -- E15's growth in the market has generally been slow, hampered by concerns about misfueling and lack of equipment necessary for gasoline retailers to offer the higher ethanol blend.

An oil company announced Tuesday it will become the first in the United States to offer pre-blended E15 at blending terminals.

In a news release Tuesday, the Renewable Fuels Association called the announcement a "game changer" in expanding the E15 market.

HWRT Oil Company announced it would be offering pre-blended E15 at wholesale terminals in Illinois, Indiana and Arkansas.

Retailers across the country interested in offering E15 have not had access to the fuel at local terminals. As a result, retailers typically offer E15 by diluting higher ethanol blends such as E85 with regular unleaded gasoline. That process, however, requires retailers to have additional storage and equipment.

Although the U.S. Environmental Protection Agency has cleared the way for E15 use in vehicle models 2001 and newer, the ethanol industry has faced a steep challenge in expanding E15's market share. The industry continues to work to expand E15's availability through grassroots efforts at the retail level, helping individual companies to work through all of the necessary regulatory hurdles.

Growing E15 usage is considered to be an important component of breaking through the so-called blend wall, where total ethanol production exceeds the available E10 market. In addition, E15 expansion could create additional demand for U.S. corn.

If 50% of the E10 market was converted to E15, according to an RFA analysis, it would create additional corn demand of about 1.3 billion bushels.

According to a news release from the RFA, HWRT will begin offering pre-blended E15 Sept. 16 at terminals in Hartford and Norris City, Illinois; Seymour, Indiana; and North Little Rock, Arkansas.

"This announcement will allow retailers with existing compatible equipment to immediately begin offering E15 to consumers with vehicles manufactured in 2001 or subsequent years, along with all flex-fuel vehicles (FFVs)," RFA said in the news release.

HWRT President Matt Schrimpf said in a statement the move to pre-blended E15 makes sense for his company.

"HWRT was one of the very first terminals in the country to offer automated ethanol blending at the terminal rack, so the move to E15 is a natural progression for our company," he said.

Robert White, RFA vice president of industry relations, said in a news release the company's decision is a milestone for E15.

"This development is a game changer that can help expand the market for E15 almost overnight," he said.

"HWRT's leadership will give thousands of retailers in multiple states access to a new fuel option, one that consumers are embracing quickly where available. Offering E15 at the terminal level provides new opportunities for retailers and greater choice for consumers... After four years in the marketplace, E15 has just found prime time."

The Hartford, Illinois, terminal in particular is considered to be an important location as it provides reformulated gasoline with low volatility to the St. Louis, Missouri, market.

RFA said that means the Hartford terminal will have E15 available that meets EPA volatility requirements year-round, and "retailers served by the terminal will be able to sell E15 all year without interruption."

According to RFA, the company has plans to expand E15 to 17 additional terminals. In all, the fuel will be made available at terminals in a total of seven states.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(BM/AG)

Copyright 2016 DTN/The Progressive Farmer. All rights reserved.