Fuels

Economics and the Advantage of Replacing E10 with E15

Get answers to some of the most frequently asked questions about making the switch.
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Photograph: iStock

When it comes to what type of fuel to offer on the forecourt, there’s growing support for switching E10/87 with E15/87. In fact, there’s no better time than now to do so—and there are a number of reasons why. Not only is it easy to make the switch, the economics for doing so are great—the market share of E15 is growing, as is consumer demand—in fact, E15 represents as much as 50% of total fuel sales in many locations, and more than 22 billion miles have been driven on it in the last seven years. Based on Growth Energy’s collection of more than 4,000 consumer surveys, plus onsite interviews, GasBuddy research and trials at more than 350 retail locations, it’s become clearer and clearer: consumers who are aware of  E15  are likely to seek out a retailer that offers it—making the opportunities  for retailers abundant. 

David Durling, Western Regional Director at Growth Energy, shared  helpful insights for retailers who may be on the fence. With nearly 20 years of experience in the oil and gas industry, Durling’s expertise spans multiple areas, including retail operations, logistics, pricing, supply, loss prevention, competitor and market analysis and marketing. For retailers with questions about making the switch from E10/87 to E15/88, Durling has answered some frequently asked questions regarding making the switch.

FAQ #1: Will I see better sales or higher margins if I switch E10/87 with E15/87 

Durling: There are various components involved when it comes to margins, but by utilizing years of research and data, Growth Energy can help retailers set their locations up for maximum success. On average, retailers gain an overall competitive advantage and increase their margins by adding E15 to their offerings. Large retail chains report that E15 generates up to 85% of their total fuel sales without negatively impacting demand for other fuel grades. E15 can boost retail margins and increase overall in-store traffic. 

FAQ #2: Have the economics of E15 always been better than E10/87?

Durling: Historically, the economics favor E15 over E10. Overall, E15 provides higher margin opportunities at retail, offering more of a competitive advantage. In turn: E15 can be an effective sales-driving strategy for retailers.

FAQ #3: What should I be asking my supplier about when it comes to switching?

Durling: Retailers should be asking about the availability of an E15 pre-blend and discussing RIN share to maximize margins. Currently, there are nearly 250 terminals are offering a pre-blended E15, including Magellan Midstream Partners, Sinclair Oil, Trafigura, and Murphy Oil USA. As more terminals are adding E15 to their lineup, E15 will become more readily available. Currently, more than 500 retail sites are offering pre-blended E15.

FAQ #4: Do I need any new equipment if I make the switch from 8E10/87 to E15/87? What will it cost?

Durling: In most cases, retailers will not need new pumps to dispense E15. All Wayne dispensers are compatible with ethanol levels up to 15 percent. Additionally, all Gilbarco dispensers from 2008 or newer are approved for E15; all steel tanks and most double-walled fiberglass tanks installed in the past 30 years are compatible with E15; and all UL listed equipment is compatible with E15.Retailers can also easily switch out E10 or mid-grade fuel blends for E15, which makes install simple.

FAQ # 5: What’s the feedback from retailers who have made the switch?

Durling: Retailers who have made the switch have been enthusiastic with the results and continue to convert additional stores. If retailers want to hear more directly from Growth Energy partners and the success they’ve seen from adding E15 to their lineup, the YouTube web series, “The E15 Expressway: Web Chats with Retailers” is a great place to start.

Want to learn more? Growth Energy specialists are happy to help. Set up a call anytime by clicking here, or check out more resources on the Growth Energy website. Retailers in the southern or western regions can contact David Durling at DDurling@GrowthEnergy.org, and retailers in the northeast can reach out to Will Beck at WBeck@GrowthEnergy.org. Or, contact Growth Energy’s Vice President, Mike O’Brien, at MOBrien@GrowthEnergy.org, and don’t miss Growth Energy’s whitepaper about the benefits of E15, available here.

This post is sponsored by Growth Energy

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