The Future of Fueling

Alternative fuels, electric vehicle charging stations and other technologies are changing the face of the forecourt, and c-stores need to start preparing now

By Tammy Mastroberte

THE FORECOURT AT convenience stores is in a constant state of change these days, whether it’s upgrading for EMV, offering alternative fuels, adding electric vehicle (EV) charging stations, or paying for fuel through in-car technology. But how quickly are the alternative fuel and electric vehicle changes happening, and what should c-stores be doing now to prepare for the future?

“I think electrification is likely to be the only real impact to c-store business and in a high electrification case, c-store operators need to position themselves for a non-fuelcentric business,” said Alan Cerwick, CEO of VP Racing Fuels, a San Antonio, Texasbased company that provides branded fuel programs to the convenience channel. “With that being said, there’s likely time for owners to figure it out.”

In February 2021, both General Motors and Ford Motor Co. announced plans to move toward electric vehicles, although Ford was talking primarily about its vehicles in Europe. General Motors said by 2040, it plans to have 100 percent of its portfolio fully electric, and Bloomberg is forecasting that by 2040, 60 percent of vehicles will be electric. President Joe Biden has announced that he will be heavily investing in the electric vehicle market to the tune of $174 billion. “Even if they are correct, and I don’t think they are, that is still less than one-third of vehicles, which means two-thirds will still be combustion engine fuel,” John Eichberger, executive director of the Fuels Institute, a non-advocacy research organization dedicated to studying transportation energy based in Alexandria, Va., said about the Bloomberg prediction.

Some advocates think EV is the only environmental solution and are pushing for mandates, specifically in California where they are trying to push a ban on combustion sales by 2035, he explained. However, while EVs will have a huge role in the future, Eichberger believes it will be less than people think, and that there will be combustion engine liquid fuel in the market for decades to come.

Looking at the current average life of a car — estimated to be about 12 years and on the high side, 15 — and looking at the percentage of electric cars to be sold this year — around 1.98 percent, and likely around 2 percent next year — the reality is that the change won’t be as dramatic as represented by the news and car company announcements, Cerwick echoed.

“While I believe electrification will be slower than touted, it will inevitably continue and likely over the years, put downward pressure on the c-store industry,” he said. “In the end, hybrids make the most long-term sense as a transition period, and traditional fueled transportation is likely to remain for the foreseeable future. That, however, doesn’t mean c-store operators shouldn’t begin thinking about how to transition their business.”

Right now, operators need to look at “future-proofing” their sites. So, for new builds or construction, plans should include a power panel that can handle electric vehicle charging and parking spaces for the chargers, but also capability for alternative fuels that will likely grow more quickly than electric, according to Eichberger.

“We are decades away from EV being the end solution to reducing carbon, so we need to reduce carbon in the liquid fuel space,” he said. “If operators are changing equipment, make sure it’s rated for biofuels, ethanol and other low-carbon alternatives because that is going to be more popular. Having equipment to handle ethanol blends like E15, E20 or B20 will be important.”

Embracing Alternative Fuels

Alternative fuels, including ethanol blends, biodiesel renewable natural gas (RNG) and compressed natural gas (CNG), continue to grow — and oil and fueling companies continue to research and invest in these lower-carbon options as well.

In March 2021, BP Products North America and Chevron formed and expanded joint ventures around RNG, respectively. Chevron expanded its joint venture with Brightmark LLC to produce and market dairy biomethane, an RNG, after it teamed up with California Bioenergy LLC and local dairy farmers in September 2020 to achieve the first RNG production from dairy farms in Kern County, Calif. Meanwhile, BP entered a new partnership with Clean Energy Fuels Corp. to develop, own and operate new RNG projects at dairies and other agriculture facilities.

“There is a resurgence of interest in RNG because it hits environmental concerns people have,” Eichberger explained. “A couple of years ago, UPS struck a deal with Clean Energy to purchase tons of RNG because it satisfies low-carbon fuel standards, and it’s a great fuel for fleets because the infrastructure to fuel them is pretty easy.”

Additionally, oil companies must meet their renewable volume applications, which is why they are blending E10 and biodiesel, and there have been several converting refineries for renewable diesel, the Fuels Institute executive shared. The credits are available to them right now as there is a blenders tax credit of $1 a gallon, he noted.

“There is a lot of incentive for them to make these conversions, and they need to look at what products they need to bring to market to stay viable,” Eichberger said.

At the same time, ethanol blends are seeing a lot of growth on the forecourt right now. In 2020, the number of retail sites selling E15 grew by 10 percent, bringing E15 to more than 2,300 stations across 30 states, according to Growth Energy, a trade association working to advance pro-biofuel policies and expand customer access to higher blends of ethanol.

Convenience store retailers including Casey's General Stores Inc., Cumberland Farms, Family Express Corp., Holiday Stationstores, Kum & Go LC, Kwik Trip Inc., Minnoco, Murphy USA, Protec Fuel, QuikTrip Corp., RaceTrac Petroleum Inc., Royal Farms, Rutter's, Sheetz Inc. and Thorntons offer E15 on their forecourts, which is known as Unleaded at the pump.

“The number of stores selling E15 has grown and will probably accelerate, and most vehicles on the market today are approved for E15,” said Eichberger. “I see ethanol blends growing, as pretty much all fuel has 10 percent ethanol and E15 is growing already with less hurdles to get it, including compatible and certified equipment.”

There is also more opportunity around E15 now because up until this year, it could not be sold in the summer months; it is now approved for year-round availability. As of press time, the Fuels Institute was analyzing the results of a recent study looking at sales data for stores offering E15. By the end of a 12-month period, it was outselling higher octane blends.

The Top 10 Electric Vehicle Friendly States

While electric vehicles only represent 2 percent of the overall car market, adoption is projected to increase in the future. And there are some states that are more electric vehicle friendly right now, so convenience retailers operating stores in those markets should be preparing.

According to the American Council of Energy-Efficient Economy’s first State Transportation Electrification Scorecard, released in February 2021, the top 10 electric vehicle friendly states are:

1. California 2. New York 3. District of Columbia 4. Maryland 5. Massachusetts 6. Washington 7. Vermont 8. Colorado 9. Oregon 10. New Jersey

fuels the company offers, it has one streetlegal fuel, which is VP101. The company does have a number of ethanol fuels, as well as several formulas that utilize bio-butanol. Looking further down the road, the company is exploring synthetic fuels, which can utilize renewable energy, sequestered CO2 and hydrogen to synthesize hydrocarbons.

“Ethanol is an easy-to-handle fuel and has a fairly long history of use in the gasoline pool,” Cerwick explained. “I believe its use will continue well into the future. In fact, E15 could become more widely adopted. But E85 in consumer application has effectively died. Ethanol could also bridge the octane shortage that seems to be growing.”

More and more manufacturers and vendors are creating technology to handle alternative fuels, including dispensers and other equipment that works with ethanol blends, CNG, biofuels and more. Dover Fueling Solutions, which has been providing technology for alternative fuels for years, offers the industry’s first blending technology that enables multiple ethanol blends from a common hose, according to Scott Negley, senior director of product management at Dover. The company also offers dispensers UL-listed for E25 and B20 as standard.

“[At the forecourt], we’ve seen greater variations of fuel offerings, with various additives to help drive greater fuel margins with premium grades, and increased use of biodiesel and ethanol blends such as E15,” Negley observed. “We will continue to invest in alternative energy solutions across our global regions, engaging with potential partners and growing our portfolio of renewable energy models. For example, we’re expanding our line of multi-hose, enhanced blenders to offer retailers more choices of higher ethanol and biodiesel products.” • Alimentation Couche-Tard Inc.: The parent company of Circle K convenience stores is planning to install EV charging stations in North America, after rolling them out in Europe. The Canada-based retailer intends to begin in its Quebec and California markets, with a combination of Circle K branded chargers and partner charging solutions.

Going Electric

Although mainstream adoption of electric vehicles is not coming any time soon, according to industry insiders, many c-store chains are adding EV charging stations to their stores now, especially in markets like California where electric vehicles are more popular.

Among the retailers in this category are:

• Wawa Inc.: The Pennsylvania-based chain reported reaching an EV milestone, installing its 50th charging site across its six-state operating footprint in May 2021. The retailer anticipated exceeding 1 million total charging sessions by the end of May. • Love’s Travel Stops & Country Stores: Last year, the Oklahoma City-based chain added EV charging stations to three of its locations in California, expanding the state’s portion of the nearly 4,000-mile West Coast Electric Highway, which seeks to provide charging stations every 25 to 50 miles.

• Arko Corp.: The parent company of GPM Investments LLC is partnering with Chakratec, an Israel-based developer of EV charging technology, to ready its stores for electric vehicle adoption. A preliminary pilot is slated to take place in 2022, followed by extensive deployment of fast charging points throughout North America by 2030.

“Not all markets will adopt at the same pace,” noted Eichberger. “California has a zero-emission mandate, and they are much more aggressive with rollouts, and the majority of electric cars have sold there. But there are 10 states that follow as well, so operators need to look at the regulations that affect their markets.”

When going electric, it is also important for c-store operators to increase their focus on foodservice and other products and services to make their stores a destination outside of fuel. EV drivers will have other options to charge their vehicles outside of c-stores, unlike with traditional gasoline and alternative fuels.

“C-store operators holding on to the belief that electric car owners in metropolitan areas will maintain their fueling habits by charging up at a c-store haven’t completely thought it through,” cautioned Cerwick. ‘People will refuel at home, work or shopping outlets — somewhere they are already parked. It will not be a special stop unless they are on some kind of road trip, in which case travel centers get the stop regardless of fuel type.”

Right now, there is still development needed not only in battery technology for faster charging, but also in the infrastructure and grid to support critical mass, according to Matt Tormollen, vice president of solutions at Dover Fueling Solutions.

“Even if the auto industry completely switched to EVs overnight, it would take nearly 20 years to replace the existing vehicle fleet,” he said. “We need to thoughtfully prepare for a transition, while keeping in mind liquid fuels will be with us for many years to come.” CSN