Fuels Forward Blog: Speedway's AltFuel Focus: Exploring Possibilities

Traditional fuels to remain viable, but chain will "not ignore" diesel, E85, especially CNG

OAKBROOK TERRACE, Ill. -- As one of the highest-volume fuel retailers in the United States, it would be easy to assume that Speedway LLC, the retail arm of Marathon Petroleum Corp. (MPC), has little to no interest in alternative fuels. When you are connected to a large refiner, and outpace many of your peers in gasoline gallons and margin per store per month, you know where your bread is buttered. Speedway Alternative Fuel CNG

But that would do a disservice to Speedway. While skilled at selling gasoline, the growing 1,470-store chain is also expanding its alternative fuel portfolio, as president Tony Kenney told me in a recent exclusive interview.

"Our view is the traditional internal combustion engine is going to continue to remain very efficient and very cost-effective from a consumer standpoint," said Kenney. But, "Speedway's approach is to not ignore other forms of potentially viable transportation fuels."

This includes, for example, diesel; diesel engines are around 35% more efficient than gasoline-powered engines, and Speedway plans to offer not only car diesel but truck diesel as well at locations where traffic flow and demand support the investment in commercial fueling lanes. Today Speedway sells diesel at just under 1,300 sites.

Then there's E85. Kenney noted that Speedway is one of the biggest marketers of the high-ethanol blend in the Midwest, with 146 sites selling the fuel. "As we build new locations, we're adding E85," he said. While acknowledging the fuel's slow growth overall, he believes it is a better means to meeting the Renewable Fuel Standard (RFS) biofuel volume mandates than E15.

"E85 to me is a good answer," he said. "The automobile manufacturers are making flex-fuel vehicles that run on E85, it doesn't void manufacturer warranties; it's been proven effective for a number of years. I think it's a viable alternative in terms of adding renewable fuels into the supply chain." His concern with E15? The potential for misfueling--E15 is only approved by the EPA for use in 2000 vehicle models and newer--and some unanswered questions remain in regards to retailer liability.

"You've got a number of issues that have not been adequately addressed from a retailer standpoint that does not give me any comfort at all to say we'd be willing to commit to E15 without further safeguards from a retailer standpoint and a liability standpoint," he said.

But the newest altfuel offer at Speedway--and one poised for very measured expansion in 2014--is compressed natural gas (CNG). In March 2013, Speedway opened its first CNG fueling location in Monona, Wis., in partnership with a local gas and electric utility company (see embedded video). It's a model that Speedway plans to follow as it has plans to roll out another four to six sites in the coming 12 months, including some in Ohio and Indiana.

"We want to align ourselves with producers or natural-gas utilities that also have a stake in the game," explained Kenney. "We can do this together, learn together, and see where the market is developing, to really build this intelligence on what might happen down the road with the CNG market."

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