Alternative fuels advocates pitch Triad on ethanol

by Amy Kingsley

The organizers of an ethanol conference on Dec. 4 booked a multipurpose room inside the NC Division of Environment and Natural Resources’ Winston-Salem regional office. The forum, titled “Ethanol: Making a Business Case,” was scheduled for the early afternoon following a morning seminar on underground tank storage.

Anne Tazewell, the first speaker and alternative fuels program manager for the NC Solar Center, directed her pitch at holdovers from the morning event, lured into staying by free sandwiches.

“We have retail outlets in the Triangle and in Asheville and Charlotte,” she said. “What’s glaringly missing is the Triad. Maybe one of the outcomes of this conference will be at least one, or maybe two or three stations here.”

The Solar Center, which is headquartered at NC State University in Raleigh, is charged with disbursing some $2 million in federal grant money for transportation emissions reduction. Some of the money has been spent on a campaign to convince fuel retailers to add ethanol, which is mixed with petroleum to make E85, which is 85 percent ethanol, and E10, 10 percent ethanol.

Ethanol is one of several alternative fuels experiencing a renaissance, particularly in breadbasket states like Minnesota, where retail availability is high. It’s usually made from corn, a renewable and domestic resource, and emits lower levels of nitrous oxide when burned.

One thing ethanol doesn’t do – to the consternation of retailers and regulators alike – is mimic petroleum’s physical qualities. The corn-based fuel tends to absorb water, which can harm engines, something that petroleum doesn’t do.

Automotive manufacturers like General Motors and Ford have developed lines of so-called flex-fuel vehicles that can run on both ethanol and gasoline, but state regulators have not been as accommodating. Tazewell said the state has adopted some of the most restrictive ethanol equipment guidelines in the country. Professional engineers must sign off on every component, from underground tanks to fuel pumps, unless retailers invest in pricey new equipment already approved by regulators.

That’s a problem, Tazewell said, because retailers already make little to no profit from fuel, which gives them little incentive to sink money into an unproven product.

“One guy told me ‘Oh, I hear more about demand for chocolate tacos than I do for E85,'” she said. “They’re leery of making the investment because they don’t profit from it.”

Fuel system installers who stuck around for the conference offered their opinion in no uncertain terms: Cut the red tape, or forget about adding ethanol outlets.

Despite having less domestic corn production than most Midwestern states, North Carolina is actually a good fit for ethanol production, Tazewell said. That’s because the state’s hog farms already import 400 million bushels of corn a year. Just route those to ethanol plants first, and sell the byproduct – distillers grains – as feed to farmers at a lower price, she suggested.

On the day of the conference, Clean Burn Fuels broke ground on North Carolina’s first ethanol plant in Raeford. Clean Burn isn’t the only organization eyeing a future for ethanol in the state. Michelle Kautz of the National Ethanol Vehicle Coalition said the success of ethanol depends in large part on the how business owners market the product.

“It is imperative to price it competitively with gasoline,” she said. “It contains less energy – about seventy-three percent compared to gasoline – so it must be cheaper.”

Hers was a message seconded by Steve Walk, a director of project development at CleanFUEL Distribution who’s working on recruiting an ethanol retailer in the Triad.

“The location of fueling stations is very important,” he said. “A station can be positioned in such a place where it is set up for success.”

The keys to success include proximity to public fleets, many of which use E10 and E85, and the number of flex-fuel vehicles in the area. Both of which indicate the success of an outlet in Greensboro, which Walk is currently in the process of developing.

Walk wouldn’t say which local gas station would be adding an ethanol pump. In an e-mail, he said construction would begin in February, with the opening planned for June.

Jody Sailors of Southern Pump and Tank Company, a business that sells fuel equipment all over the Southeast, said he’s noticed increased interest in ethanol products.

“Ethanol has just been coming up in the last couple of years,” he said. “That’s when it came back.”

Ethanol peaked in popularity in 2005, when gasoline prices hit record levels. When the prices dropped in 2006, ethanol ceased being competitive, Kautz said. Recent increases in petroleum prices may make ethanol attractive again, she said.

But Kautz, Walk and other experts warn retailers to take a prudent business approach.

“It will be a growth market for people that are in it,” Sailors said. “But then there will be others who don’t know what they’re doing and mess up.”

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