The Fuels Institute predicts that E85 sales will increase from 196 million gallons in 2013 to between 400 million and 4.4 billion gallons in 2023.
Today, between 2,685 and 3,349 retail fuel stations in the U.S. sell E85 flex fuel, according to the Fuels Institute report, “E85 A Market Performance Analysis and Forecast.” The report showed that E85 is available at 2.2% of the nation’s 152,900 retail fueling stations. As of January 2014, there were between 14.2 million and 16 million flexible fuel vehicles (FFVs) registered in the U.S. Only FFVs are able use E85, which is an ethanol fuel blend of between 70-85% ethanol fuel and gasoline.
EDUCATING CONSUMERS
Miami-based Caraf Oil, which operates 10 locations in Florida, offers E85 at three stations and just added E15 to one station in January.
Edwin Flores, president of Caraf Oil, noted the company began offering E85 back in 2006, working with supplier and consultant ProTec Fuel.
Flores noted that the E85 customer is extremely loyal. E85 runs 20-30 cents less at Caraf Oil locations than regular unleaded gasoline. Flores hasn’t seen recent low gas prices impacting E85 sales. “Gas is a lot cheaper lately, but so is E85,” he said. He expects E85 sales to be up in 2015 overall as long as the price differential continues.
“I think we’ll see continued growth, especially as the public becomes more educated. There are a lot of flex fuel vehicles out there and the drivers are not all taking advantage of the fact that they can fuel up with E85 because sometimes they just don’t know about it,” Flores said.
The decision to add E15, was an easy one. “The more products you have to offer the general public the better off you are,” Flores said, noting he’s currently considering potentially expanding E15 to more stations.
Brian Milne, energy editor for Schneider Electric, predicted that the steep decline in gas prices could slow interest in alterative fuels in 2015.
“E15 sales will remain very weak because liability concerns remain, and the economics are challenged. Expanding E85 sales are more likely, but I believe they will struggle this year amid the plunge in oil and gasoline prices,” Milne said.
He noted that a critical element in growing E85 sales is maintaining competitive pricing with gasoline. “It needs to be close to equal to see E85 move sales. E85 has less energy. You’ll need to fuel up more times if you’re using E85 than if you’re using gasoline. The expectation is you would see more E85 going forward because there is pressure to meet the Renewable Fuels Standard. But there needs to be some sort of push that brings an opening for E85.”
While the Environmental Protection Agency (EPA) issued partial waivers for 2001 and newer vehicles, if someone fuels up with E15 and experiences engine damage not covered by their warranty, the c-store that sold the fuel could face a lawsuit, Milne said. Such concerns are likely the reason E15 has been slow to catch on. It’s currently available in 16 states at roughly 100 stations, Milne said.