Building the Infrastructure for Future Fuels

LAS VEGAS — Retailers need to diversify their fuel offerings, not because alternative fuels are moving quickly to replace traditional gasoline and diesel fuel, but because government policies and continued fears of climate change from carbon dioxide emissions make the growth of alternative fuels inevitable.

This was one of the key messages of an educational session entitled “Building the Infrastructure for Future Fuels” held at the 2015 NACS Show. 

Jay Ricker, chairman of Indiana-based Ricker Oil Co. and chair of NACS’ independent Fuels Institute, and Scott Minton, CNG Market Developer for Oklahoma-based alternative fuels retailer OnCue Express, presented surprisingly similar opinions on the future of fuels during the session. 

Ricker noted that exploring future fuels is easier when the investment is underwritten by someone else. In fact, Ricker is currently participating in a program called “No Charge to Charge,” in which Nissan (maker of the all-electric Leaf vehicle) has put Level 3 charging stations into Ricker stores in metro Indianapolis. Typical costs for an electric vehicle charging unit range from $25,000 to $30,000 per unit, not including installation of $11,000 to $12,000. Typical charge time is 15 minutes.

As for another alternative fuel, Ricker feels the economics of offering E15 can be favorable when building a new station, but are very difficult to justify adding to an existing location. Ricker was equally nonplussed about the benefits of adding E85. “The cost advantage is just not there,” he said.

Minton of OnCue Express is in charge of compressed natural gas (CNG) development at his company, which currently operates 47 c-stores and plans to open five stores a year. Minton acknowledged that “it’s not as easy to sell CNG now with gasoline selling below $2 per gallon in many markets.” However, he believes CNG offers several benefits that make it a good investment for a retailer’s future.

“CNG offers price stability and you need to be ready when the price of gas goes up again,” noted Minton, whose company plans to add four to six CNG sites per year. “My price of CNG hasn’t changed a penny in 18 months.”