Many in the petroleum industry expect that a higher percentage of ethanol will be allowed in gasoline before year’s end. If that does happen, there will be implications for installed equipment at existing stations and for operators choosing new equipment.
The “vast majority” of equipment now installed at stations is certified to handle E10, gasoline with ethanol content up to 10 percent, Scott Negley, director of alternative energy products for dispenser manufacturer Dresser Wayne, said.
“The issue becomes the UL approval of equipment,” Negley said, referring to Underwriters Laboratories, which establishes safety standards for all manner of equipment, including that used in petroleum wholesaling and retailing operations. If operators begin storing and dispensing fuel with ethanol content greater than 10 percent, they could risk invalidating the UL approval or “listing” of their equipment, Negley said. That’s because it is known that concentrations of ethanol above a certain level can be corrosive to some materials in fuel containment and dispensing equipment.
“We don’t have a problem with compatibility of [our] equipment up to E15 and we will warrant as such,” Negley said. “We know that once you get above E15 it starts to get pretty interesting, especially as it relates to elastomers [rubber] and seals,” Negley said.
Besides UL approval, there is the matter of California’s Air Resources Board, which has also approved most systems in that state for blends up to E10. The ARB “would have to go back through some type of process to demonstrate compatibility with E15,” Negley said. “That’s not a challenge necessarily, but it would have to be done.”
Meanwhile, segments of the ethanol industry are lobbying Congress to increase the amount of ethanol in gasoline to 15 percent. Ongoing research by the Environmental Protection Agency (EPA), the Department of Energy (DOE) and industry is designed to establish whether a blend containing more than 10 percent ethanol would damage gasoline-powered engines, and also whether such fuel would result in unwanted emissions.
The EPA’s decision on whether the ethanol content of gasoline can be increased beyond 10 percent is expected before year’s end. The expectation among manufacturers of fueling equipment is that the EPA will allow an increase to 15 percent ethanol.
Equipment manufacturers said that allowing a higher percentage of ethanol than the current E10 – 10 percent – will pose a range of challenges and complications for petroleum marketers.
“There are as many market and business issues in terms of how [higher-ethanol fuel] affects the existing industry as there are equipment compatibility issues,” Negley said.
For example, fire marshals, normally the “authority having jurisdiction” (AHJ) over petroleum wholesaling and retailing businesses at the local level, usually adhere to UL listings when enforcing safety standards.
A big question, if E15 becomes allowed for example, is whether AHJs will allow dispensers that are UL-listed for 10 percent to pump E15, said Chad Johnson, a marketing manager for Gilbarco Veeder-Root. “We don’t know,” he said.
In the past, the UL listing has been the rule for AHJs, no matter what the manufacturer’s warranty states, Johnson noted. Gilbarco’s current warranty on its standard equipment is for gasoline-ethanol blends up to E15.
Johnson also noted that the National Renewable Energy Laboratory, as well as the EPA, is researching to establish what model year vehicles would suffer detrimental effects from greater-than-10-percent ethanol.
Negley of Dresser Wayne observed that a separation of vehicles into two groups – those allowed to run on something greater than E10 and those that must stick with E10 – would further complicate matters. If the EPA decides to allow, say E15, it will put retailers in a position of promoting a “dual vehicle strategy,” Negley said. The federal agency could decide that vehicles of the last three model years will be legally allowed to run on the new, higher-ethanol blend, while limiting older vehicles to E10. In that scenario, Negley said, “They’re making the consumer choose - putting the decision whether it’s a legal or illegal fuel into the hands of the drivers.”
And for retailers, Negley highlighted a practical problem: many stations just would not have the storage tanks and other equipment to accommodate the variety of fuels: E10, E15, a premium fuel and diesel. Such an operator would be forced to choose to carry certain fuels rather than others. “In a business sense he has to walk away from some of his customers,” Negley said. Further, some stations still don’t do blending, Negley noted. They would be forced to upgrade or close, he said.
The complications extend, to some degree, underground, said Mike Lewis, founder and chief executive officer of Western Fiberglass, Inc., a manufacturer of sumps, “penetration devices” (allowing pipe to pass through the wall of a sump in a watertight configuration) and double-walled pipe suitable for fuels including alcohols, diesel and gasoline.
Depending on the product, Western cites UL listings for materials in the product and supplements that with third-party testing. Western’s sumps and piping are suitable for 1 percent to 100 percent alcohol, Lewis said.
However, penetration devices, used to allow pipe to pass through a sump wall, have in many cases been made of materials such as neoprene and urethane, Lewis said. Those materials are unsuited for the complete alcohol range. “We have seen deterioration in those products in the field. One of our major businesses is replacing them,” he said.
The replacement devices, which Western recently rolled out, are made of Viton, a proprietary form of rubber touted by its maker, DuPont, for “excellent resistance” to aggressive fuels and chemicals.
“We’ve switched over to Viton because it’s suitable for 1 percent to 100 percent alcohol,” Lewis said.
Xerxes Corp., a manufacturer of underground storage tanks (USTs), markets fiberglass tanks, typically double-walled, UL listed and/or warranted for storage of zero to 100 percent ethanol, said Tom Tietjen, vice president of sales and marketing. Xerxes also offers what it calls “The ZCL Phoenix System,” a process for upgrading in-service steel or fiberglass single-wall tanks with a secondarily contained fiberglass system. The surrounding area and equipment are left undisturbed as the tank retrofit is completed without removing the tanks from the ground, according to company literature posted on the company’s website.
Not all the attention is on E15: Dresser Wayne and Gilbarco Veeder-Root announced this summer that UL has approved certain of their dispensers for dispensing gasoline-ethanol blends up to E85 – consisting of 85 percent ethanol.
Gilbarco Veeder-Root said in July that UL approved six of its Encore blenders to blend mid-level ethanol/gasoline products containing up to 85 percent ethanol. A total of 22 Gilbarco dispenser configurations (blenders and MPDs) are now approved for use with fuels up to E85, the company said.
Dresser Wayne issued a statement in July that its Reliance E-Series fuel dispensers for retail and fleet applications received UL certification for dispensing ethanol up to E85. (Previously the company received certification of its Ovation Eco Fuel retail dispenser.)
The market for E85 includes government fleets, which in some cases have been mandated to use E85, though practically speaking they couldn’t because UL-listed equipment didn’t exist until now, Dresser Wayne’s Negley noted.
In the upper Midwest, in the Corn Belt, some blends higher than E10 are being allowed, according to Brandon Grote, product manager, aboveground products, OPW Fueling Components.
OPW Fueling Components recently received UL listings for its “hanging hardware” – nozzle, swivel, breakaway and shear valve – as did Veyance Technologies for its hose, manufactured under the Goodyear Engineered Products name. Receiving the UL listing for these items has “opened up the market,” Grote said.
“I know they’re being used for E85,” he said of the OPW components and the Goodyear hose. “I’ve seen it in the field.” In Ohio, Grote reported, “there are several Kroger sites using E85.”
Upon learning that UL had approved certain Dresser Wayne and Gilbarco Veeder-Root dispensers for E85, the Tennessee Division of Underground Storage Tanks announced that for any tank converted or installed after June 24, 2010, an E85 UL-listed dispenser must be used for dispensing E-85 fuel.
There are other factors that limit use of E85, however, and they include how geography and logistics influence cost of the fuel.
Negley cited the Pacific Northwest as an example.
“There are special grants from stakeholder groups that basically offset the cost of a dispenser” or at the very least cover a significant portion of the cost of a dispenser, Negley said, “and they were ignored.”
Retailers were unimpressed because of the price they would have to pay for the fuel, according to Negley. “It’s still a money loser because they can’t get ethanol cheap enough,” he said. “You can give them the pump, but because of the supply chain issue – getting it from Point A to Point B – it’s basically fallen on deaf ears out there.”
The reception from retailers has been better in the Dakotas and Minnesota, where transportation and logistics are much more favorable, Negley said.