Fuel stations want more money for E15 requirement

By: - February 14, 2022 3:53 pm

Travelers fill their gas tanks in Des Moines Nov. 23, 2021. (Photo by Jim Obradovich for Iowa Capital Dispatch)

State lawmakers should quadruple the money they might provide to upgrade outdated fueling stations as part of a proposed requirement to sell a gasoline blend that is 15% ethanol, according to convenience store owners.

The current proposal would provide up to $50,000 per store to upgrade tanks and pumps to accommodate higher concentrations of ethanol, which can degrade certain plastics and rubbers. Glenn Hasken, chief operating officer of Molo Companies in Dubuque, says the state should offer up to $200,000.

“The way the bill is written today is not palatable to small operators,” said Hasken, whose company owns Big 10 Mart convenience stores and sells fuel to other retailers.

Blends with 10% ethanol are the most-sold fuels in Iowa for general transportation, and a switch to a 15% blend — commonly known as E15 — would be a boon to ethanol producers and farmers. A recent study estimated it would yield $73 million of new annual income for them.

But some fueling station owners have said they might go out of business if the bill becomes law. The ethanol industry disagrees.

“We just frankly don’t understand where these claims are coming from,” said Cassidy Walter, a spokesperson for the Iowa Renewable Fuels Association.

That’s because the bill contains exemptions for fueling stations with old tanks and for those facing costs to upgrade that exceed about $72,000.

“If you’re going to have to pay an arm and a leg or anything that’s astronomical, you’re going to be exempted,” said Nathan Hohnstein, the policy director for the association. “Unfortunately, in Iowa we have an old tank issue. We have tanks that date back 30, 40, 50 years that are still in use.”

But the exemptions, as they stand right now, are gimmicks, said Nicole Johnson, chief financial officer of Molo Companies and a board member of FUELIowa, which opposes the E15 bill in its current form. The state grants for the upgrades will likely only pay to route E15 to one fuel pump, she said, and smaller convenience stores often have four pumps. It doesn’t make sense to spend tens of thousands of dollars to replace a tank and only connect it to one pump, she said.

Amending the bill to offer up to $200,000 would assuage their concerns about the bill. Tom Cope, a lobbyist for Casey’s General Stores that has opposed the E15 bill, said he supports the change and is also working to broaden the waiver for old tanks.

The exemptions also create a problem for retailers who sell their businesses, Hasken said, because potential buyers might shy away from a property that doesn’t comply with the latest state requirements.

“You just devalued your business by $200,000,” he said of fueling stations that obtain a waiver rather than update the infrastructure.

The bill was quickly approved by the Iowa House of Representatives early this month after lawmakers amended its waiver provisions. It received support from the Senate’s agriculture committee last week and is expected to be reviewed by the Ways and Means committee before a full Senate vote.

It is supported by Kum and Go, KWIK Trip and Hy-Vee.

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register.