Drivers showing E-10 passion at the pump
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BY ART HOVEY / Lincoln Journal Star
Ethanol blends are typically selling 10 cents cheaper than regular unleaded at Lincoln fuel pumps this week, and 10 percent blends made with Nebraska corn appear on their way to outselling straight gasoline in 2005 for the first time in the state's fuel history.
With unleaded prices pushing past $2.25 per gallon at many self-service stations, there's also a sudden spurt of interest in 85 percent ethanol blends.
Gas 'N Shop began dispensing E-85 at its 15th and Cornhusker location again Wednesday after a three-year shutdown. And its management is considering adding more of an 85 percent product of grain-alcohol origin at some of its other 15 Lincoln locations.
At $1.60 to $1.70 a gallon, E-85 appears to be attracting interest even from drivers whose cars aren't equipped with a flex-fuel option at the factory.
At Hallam, Josh Hicks reported three calls from drivers attracted by prices of about $1.65 a gallon who pumped E-85 into vehicles without a flex-fuel option.
"That would not be a good idea at all," he said. "It can cause some serious damage."
Three unwitting victims "ended up pumping out their tanks," Hicks said. "Their cars ran, but not good at all."
As Gas 'N Shop restores E-85, Sue Smetter, director of gasoline marketing at its Lincoln headquarters, is hearing about drivers in other cities making two stops at the pumps to mix E-85 with E-10 to cut their costs.
"That's kind of scary," Smetter said Thursday.
It's also not recommended by car manufacturers.
On a happier note, "alcohol is cheap and gasoline is expensive," she added. "So it makes good sense to promote a Nebraska-based product that's developed in our back yard."
That's the sort of assessment that can be counted upon to produce a loud "amen" at the downtown offices of the Nebraska Ethanol Board. At times like these, "hallelujah" seems equally appropriate.
"In the 25 years that we have tracked monthly fuel sales, we've calculated the market penetration for ethanol blends," said ethanol board spokesman Steve Sorum.
"And for January, the last month we have figures for, ethanol blends went to 53 percent of the market, which is an all-time high for Nebraska."
The state's official promoter of ethanol blends is projecting that total sales could reach 520 million gallons in 2005 in an overall, gasoline-based market of about 900 million gallons.
A dime difference at the pump arrives both from high gasoline prices and from an ethanol surplus that typically develops in the spring.
That's when major metropolitan areas step away from seasonally mandated ethanol use that is supposed to help them clean up their air.
Sorum usually describes the market result as a "softening" of the ethanol price in relation to regular unleaded. "This time it's more than softened," he said. "It's reversed dramatically and I can only attribute that to a temporary oversupply of the market."
That does not mean that the state's 11 ethanol plants are suffering, he said. "There's no question that 2004 was a record year both in terms of production and in profits."
At the wholesale level, the price of ethanol blends is still about 4 cents above the historical standard of about $1.20 per gallon.
Meanwhile, "the number of E-85 stations seems to be doubling every 20 minutes, it seems like," Sorum said.
There was one in Lincoln, as of Thursday. "Tomorrow," Sorum said, "there will be three or four others."
Ethanol Board Administrator Todd Sneller was in Kearney Thursday to promote another new E-85 presence there.
Statewide, "we noticed yesterday we had 14," Sorum said. "And we've gotten three dozen phone calls in the last three days" from other interested fuel dispensers.
Otte Oil and Propane of Davey is offering E-85 at its Hallam station, along with E-10 and soybean-based biodiesel. Regular unleaded is no longer on the fuel menu there, said spokesman Hicks.
He cited "a lot of farmers that are tired of paying high gasoline prices" for pickups and SUVs capable of using E-85. Davey is on the E-85 to-do list.
Back in Lincoln, petroleum marketer Mark Whitehead said many stations are now putting E-10 blends in their biggest bulk tanks and shifting regular unleaded to smaller tanks.
"What this means from a practical standpoint," Whitehead said, "is that it sets unleaded with alcohol up to be the main, leader item at that retail establishment."
That suggests something beyond a temporary trend. It also suggests national implications for a state with several more possible ethanol plants pending at Wahoo, Fairmont, Adams and Grand Island.
Whitehead warned that E-85 tends to reduce vehicle mileage by as much as 30 percent per gallon.
Sorum said the difference is more in the 5-12 percent range "depending on how you drive."
Still, there are an estimated 23,000 flex-fuel vehicles in Nebraska and lots of sudden, E-85 enthusiasm in the driver's seat. "So that's the market these folks are going after."
Reach Art Hovey at 523-4949 or at ahovey@alltel.net.
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