Behind Casey’s E15 Rollout

The opportunity—and challenge—of offering the higher-ethanol gasoline blend

ANKENY, Iowa -- Casey’s General Stores Inc. recently became the latest convenience-store chain to add E15, the 15% ethanol/gasoline blend, to its fuel offer. The move by the Ankeny, Iowa-based retailer has been eagerly anticipated by ethanol advocates, especially considering Casey’s Corn Belt roots and large size, with more than 1,950 locations in 15 states. In March, the 100th E15 location opened in Iowa, making it the state with the greatest number of fueling sites offering the ethanol blend.

Casey’s is no stranger to ethanol, having generated $31 million from earning Renewable Identification Number (RIN) credits for blending the biofuel in the fiscal year ending April 30, 2016. But even as fellow Iowa-based chain Kum & Go added E15 to dozens of sites, with the goal to have it at more than 100 by the end of 2016, Casey’s kept to the traditional E10.

By this fall, however, Casey’s will have E15 and E85, an 85% ethanol/gasoline blend, at 17 sites in Iowa, Kansas and Illinois. These are all at new-construction sites, many of which will be built this summer and fall, Douglas M. Beech, legal counsel and director of government relations for Casey’s, told CSP Daily News. As of press time, three Casey’s sites in Kansas were already offering E15, in Smith Center, Topeka and Seneca. A fourth location is slated to open the first week of May in Pella, Iowa.

Casey’s president and CEO Terry Handley described the decision to offer E15 and E85 as one based on choice. “We like the potential that E15 and E85 could bring to Casey’s and are excited to provide our customers with a wide variety of fueling options,” he said in a statement.

But adding E15 and E85 has had its challenges; for Casey’s, this included the additional cost of pumps, fuel lines and dispensers, Beech said. Also, coordinating the installation of the equipment with the construction of a new site takes some finesse. Ethanol industry group Growth Energy and its partners helped provide grants to cover installation costs.

For now, Casey’s has no plans to expand E15 beyond these 17 sites. Beech described the rollout as an “E15 test.” One issue keeping the brake on faster expansion is regulation.

While the Environmental Protection Agency (EPA) has approved E15 for use in 2001-and-newer vehicles, only flex-fuel vehicles (FFVs) can legally use it in the summer in many markets. That’s because the EPA regulates fuel’s Reid vapor pressure (RVP), which measures the evaporation rate, to control ozone and smog in the summer months. While Congress approved an RVP waiver for E10 that allows it to be sold year-round, the EPA has not provided one for E15. In March, a bipartisan group of legislators introduced a bill—the Consumer and Fuel Retailer Choice Act—to address exactly this issue. That bill is pending.

“Without the Reid vapor waiver, the products can only be sold to flex-fuel vehicles from the period of June 1 through September 15, which greatly reduces the demand,” said Beech.

While demand for the alternative fuel has its headwinds, E15 did reach an important usage milestone in January, marking 500 million miles driven on the ethanol blend, which is typically priced 5 to 10 cents per gallon below E10. According to Growth Energy, annual volumes have hit an estimated 1 million gallons.

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