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DAVID KRUSE

By Staff | Aug 8, 2014

The Renewable Fuels Association recently published a report card grading retail fuel companies and convenience stores on the number of E15 and E85 pumps they have in their supply chains.

The RFA used a much more lenient grading system than I have or what ethanol manufacturers and corn growers can afford to give branded fuel retail companies, grading on a very forgiving curve.

They are trying to be nice to entities that are considered to be friends of ethanol and agriculture, but the simple fact is that all have to step up to the demand challenge facing the farm sector and push higher ethanol fuel blends much more than they have.

The companies graded have at least 50 branded stations. It took just 25 percent of stations as a percent of total stores in supply chains selling E85 or E15 to get an A+ from the RFA.

It only took 11 percent to get an A-. That is a very easy-going grading system given market conditions that require more guts.

Meyer Gas was at the top of the class with 58 percent of stores offering higher blends of ethanol. Kum & Go with 34 percent got an A+ too.

It only took 6 percent of stores with higher blends to get a B from the RFA.

CHS/CENEX with 6 percent got a B. That actually makes me angry. CENEX is owned by farmers and if the farmers don’t put E-15 or blenders pumps in their stations, then why complain about Big Oil?

Every CENEX station should have an E-15 or blenders pump. The number should be 100 percent. There is no excuse.

The commitment to ethanol should not be in how many gallons that these companies sell, but in how many that they could sell, but are not.

CENEX could be selling a huge amount of ethanol that they don’t because they lack the commitment they profess to have to biofuel.

I would give them an F on my grading curve of who is not doing what they could be doing. The farmers that supposedly own this cooperative need to run their cooperative.

I was told of a new CENEX station being built without blender’s pumps and when a farmer member complained was told they were “too expensive.”

Frankly, they are a profitable cooperative, but are not serving their farmer owners to the level that they could or that corn growers need them to.

CENEX should be showing Big Oil how it is done and Big Oil has learned that CENEX doesn’t put action behind its words of support for increased ethanol market

Another farmer owned cooperative, MFA Oil, earned an A+ with 27 percent of stations with higher blends. That beats the heck out of CENEX.

E-10 pumps no longer constitute adequate support for ethanol or agriculture. I don’t know how to be polite about that.

We have to push this to a new level and we cannot count on politicians or government help to do it.

Ethanol is not subsidized by the government, but its market access is being limited by the government. If the EPA is allowed to implement new rules as proposed, it will reinforce the structural barrier helping create an E-10 blend wall.

Hy-Vee got a C with only 4 percent of stations offering higher ethanol blends. They work with Casey’s with their Hy-Vee Fuel Saver cards yet Casey’s got a big fat F from the RFA with only .1 percent of stations offering higher ethanol blends.

When you get an F, given the RFA super lenient ethanol score card, you are not doing your share of business with agriculture to support the mid-west economy.

Texaco with .5 percent, Chevron .6 percent, Exxon .7 percent, Shell .7 percent and even BP with .5 percent have more stations and a higher percent of stations selling higher ethanol blends than Hy-Vee or Casey’s.

That ought to be as embarrassing to them as CENEX only selling higher blends from 6 percent of stations. This report card overall is pathetic.

I understand the oil companies, except maybe with the exception of Valero which is an oil company that produces ethanol. The RFA gave them a D for 1 percent. Only 1 percent of Valero stations sell E-85 or E-15.

That means that they are an oil company first and an ethanol company at some much lower level of commitment.

Overall, this report confirmed that oil companies will defend the 10 percent blend wall that they built to deny access to consumers for biofuel. It also revealed just how many branded stations including CENEX, Hy-Vee, Casey’s, Quik Trip and others are little different than Big Oil in denying access for biofuel to consumers at farmer’s expense.

Farmers and those that support agriculture should be able to tell where they should buy their fuel by looking at this report card.

Buy only from those who get an A. Even they didn’t have to work that hard to get an A, but we are grading on the curve.

The RFA is bending over backwards to find some way to portray, in the most positive light possible, how poorly these companies have performed selling higher blends of ethanol.

The issue here is that we need to take ethanol consumption to a higher level.

Every 1 percent that U.S. ethanol adds to the market share of overall fuel consumption it creates about 500 million bushels more corn demand.

It should be the goal of CENEX, the Corn Growers Associations, branded fuel retailers and farmers to increase market access for ethanol 1 percent a year for the next two years to reach an E-12 saturation level for ethanol consumption. That is the only way to get an A.

How are we going to move the needle to advance ethanol sales ought to be the topic for discussion in all of these board rooms.

All of these companies need to be approached and asked what their plan of action to add E-15/E-85 blender’s pumps will be.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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