ETHANOL MARKET DEVELOPMENT:

WHAT DO RETAILERS REALLY WANT?

SEPTEMBER 12, 2017

1:00 PM CDT

PRESENTERS

BRIAN JENNINGS EXECUTIVE VICE PRESIDENT

RON LAMBERTY SENIOR VICE PRESIDENT

TODAY’S WEBINAR

• POLICY UPDATE

• ACE MARKET DEVELOPMENT UPDATE

• UNDERSTANDING RETAILERS

• WHAT REALLY MOVES THE NEEDLE?

• WHAT DO RETAILERS WANT?

• FLEXFUELFORWARD.COM

• E15 & FLEX FUEL RETAILER ROADMAP

• Q & A

RFS ISSUES

• POINT OF OBLIGATION

– Expect to remain with refiners and importers

• 2018 RVOs BY NOVEMBER 30?

– EPA Reset discussion in 2018?

• LAWSUIT VICTORY - EPA INTERPRETATION OF

“SUPPLY”

– 500 mg remedy for 2016 RVO

HIGHER BLENDS & OCTANE

• CAFE-GHG STANDARDS FOR 2021-2025

MODEL YEAR VEHICLES

– EPA inviting comment on high-octane blends

– Comments due October 5

– Final determination April 2018

• REID VAPOR PRESSURE (RVP) RELIEF

– Dual track: Capitol Hill and EPA

• HURRICANE HARVEY RVP RELIEF

RON’S RULES OF RETAIL

• HOW WOULD I KNOW?

• THINGS TAKE LONGER THAN THEY DO

• EVERYONE WANTS TO BE FIRST TO BE SECOND

• IF THEY TELL YOU “IT’S NOT ABOUT THE MONEY,”

EITHER THEY’RE NEW, OR THEY DON’T HAVE ANY

• IF YOU PAY 75%, THEY NEED TO FIND SOMEONE TO

PAY THE OTHER HALF

WHAT DO RETAILERS WANT?

• BARRIERS TO ENTRY

– Regulatory burden

• More correctly, what they believe the regulatory burden to be

– Cost/Availability of funds

• Cost share programs are a factor for every decision

– Available RIN-less E85/Ethanol

• Logistics - Closer to terminals would be better

– Consistent identification

– RVP relief… “whatever that is…”

– More retailers (but not necessarily in my neighborhood)

RON’S RULES OF RETAIL

• HOW WOULD I KNOW?

• THINGS TAKE LONGER THAN THEY DO

• EVERYONE WANTS TO BE FIRST TO BE SECOND

• IF THEY TELL YOU “IT’S NOT ABOUT THE MONEY,”

EITHER THEY’RE NEW, OR THEY DON’T HAVE ANY

• IF YOU PAY 75%, THEY NEED TO FIND SOMEONE TO

PAY THE OTHER HALF

BLUE HERON CAMPGROUND & GAS

• COPY

BLUE HERON CAMPGROUND & GAS

BLUE HERON RENEWABLE FUEL PLAZA

BLUE HERON RENEWABLE FUEL PLAZA

JETZ Timeline

Ron gets notified of the Jetz chain and interest in ethanol blends.

Ron contacts Bob O’ Connor and meets with him to learn more about the Jetz chain.

USDA announces that BIP funds are available for Wisconsin retailers.

Jetz Owner Bob O’ Connor hears about BIP program and thinks about signing up for the funds available for ethanol fueling infrastructure.

Paperwork is filed. Bob spends the months waiting for a reply because of real estate deadlines. ACE makes call to USDA to help speed the process. Grant approved then in late March of 2016.

Plans are drawn up for construction that adds ethanol fueling infrastructure to location.

Fall 2014

Jun 16,

2015

Sept 10,

2015

Sept 17,

2015

Fall 2015

Dec 2015

Jan-Mar 2016

Apr. 20,

2016

June 2016

July 14,

2016

Federal government unveils the Biofuels Infrastructure Partnership program

ACE retailer members are made aware of potential infrastructure grants through BIP program in participating states.

Bob decides to file paperwork to get funding for ethanol fueling infrastructure for his store in Farwell (Milwaukee, WI)

Farwell store opens up as a Shell station.

The conversion (or reimaging) of the Farwell location into a Jetz branded station starts.

Construction starts at the Farwell location

New large sign displaying prices for E15 and E85 is installed right outside the store.

Station hosts an official grand opening of the E15 dispensers. They are the first E15 pumps in the city of Milwaukee.

Bob signs contract to install E15 infrastructure at the store in Muskego, WI.

Aug 23,

2016

Sept 6, 2016

Sept 20,

2016

Oct 20, 2016

Nov 18,

2016

Mar 24,

2017

Apr 19,

2017

May 3, 2017

Piping and storage tanks are installed for sale of E15.

E15 dispensers are installed, and the first gallons of E15 were sold in the state of Wisconsin.

Shell station location is converted fully over to a Jetz Convenience Center.

Kwik Trip, a chain of c-stores primarily located in Minnesota and Wisconsin announces plans to install and sell E15 and other higher blends at their location.

EDELMAN TRUST SURVEY 2017

FLEXFUELFORWARD.COM

FLEXFUELFORWARD.COM

FLEXFUELFORWARD.COM/ROADMAP

QUESTIONS?