Consider tank cleaning before converting to E10
With gasoline prices at an all-time high and retailers switching to more cost-effective fuel choices, proprietors should remember that the process is not as simple as swapping fuels.
The price of gasoline is expected to go down by Thanksgiving; however, it is unlikely that prices will drop below $2 again. Although gasoline is an inelastic product – meaning it could rise two-fold and people will still buy it – Americans will eventually be forced to consider alternatives to use less.
The recently passed Energy Bill seems to offer some hope. This legislation signed by President Bush on Aug. 8 addresses the concern of rising gasoline prices. Among other issues, it offers tax relief and financial incentives for the production and sale of alternative fuels, such as the ethanol blend E10. The legislation includes a five-billion-gallon ethanol mandate for use in transportation fuels in the United States by 2012.
Ethanol is usually made from corn, sugarcane, canola or sorghum and produced in farms in the Midwest. E10, which is a 10-percent ethanol/90-percent unleaded gasoline blend, is a hot topic among marketers across the United States and offers many retailers a competitive advantage. E10 is less expensive off the rack and can save the marketer from 5 to 10 cents per gallon. It's no secret that patrons will drive out of their way to save a nickel per gallon, so stations that offer the ethanol blend certainly carry an advantage over those that do not.
By using an ethanol-blended fuel, an oil company can offer a small discount to the customers and bump up their bottom line a few pennies per gallon. The added benefit is that E10 is a cleaner-burning fuel and therefore better for the environment, and better for the farming industry, where the fuel is produced. What marketers need to know is that there are some key steps involved in converting their tanks to carrying an ethanol product.
US Tank Alliance, a Columbus, Ohio-based firm, conducts tank-cleaning services throughout the eastern United States and has begun working with many clients preparing for E10 conversion. One of the most important recommendations that US Tank and other tank-cleaning companies can offer retailers is to conduct a thorough cleaning as part of the switch.
The alcohol-based ethanol fuel actually helps dislodge any sludge or sediments in the tank and suspends it into the fuel. If the tank is not cleaned prior to introducing ethanol, it could result in problems with the equipment and the quality of fuel. The worst-case scenario is that the dirty fuel gets into automobiles and causes stalled or damaged engines.
Research shows that the costs associated with filter change-outs, dispenser and tank equipment replacement, and unhappy patrons outweigh the upfront investment of cleaning the tanks. After the tank is properly cleaned, the dispenser filters should be replaced and proper labels indicating the blended fuel may need to be displayed on the dispensers. Any waste that is generated from the tanks should be removed from the site immediately and disposed
Kathy Pasternak, program manager at US Tank Alliance, said tank cleaning before converting is a smart business decision.
"Consider a national shipping firm that manages a fleet and its own fuel tanks," she explained. "If the company converted to E10 without properly cleaning the tanks, the sludge-filled, dirty fuel could damage the engines and risk a lapse in deliveries."
With underground tanks, it is difficult to clean the tank without physically going inside, Pasternak said, but the tank must be cleaned from the inside. The last thing you want to do is filter the fuel and replace it into a dirty tank. A thorough cleaning will dislodge all of the sediment and sludge, then filter everything down to one micron.
US Tank uses its PetroPure tank-cleaning system to reach all parts of the tank with a "troll ball." The system throws a spherical pattern inside of the tank, much like a car wash, and filters the fuel of all sediment and sludge.
It is sometimes difficult to get a UST completely clean, Pasternak added, and the slope of the tank can factor if the fuel will even reach the sediments. This is why some marketers take the risk of converting without cleaning because they have had little, if any, tank problems in the past. But she warned that converting to ethanol-based fuels without cleaning can be a gamble. In very few cases, a marketer can get away with not cleaning the tank depending on tank size, the amount of dirt in the tank and where it has settled in the tank.
If it is a large tank with only a few inches of sludge at the bottom, then there might not be any dislodging. The sludge may have also settled at the bottom or on the lower side and will never present a problem. However, the liability for the marketer's insurance, equipment and reputation as a reliable fuel provider make it a risky venture to ignore the potential problems.
"Unfortunately, bad news spreads fast," said Pasternak. "If just a few stations develop a reputation for selling bad fuel, the entire franchise could suffer. We recommend operating with a clean tank at all times, but it makes good financial sense to take the precaution before switching to ethanol."
Fernando Crosa is president and CEO of US Tank Alliance, a leading provider of UST testing and cleaning services, serving the eastern half of the United States. US Tank serves individual and chain businesses such as oil, gasoline and petroleum suppliers, gasoline retailers, departments of transportation for states and municipalities, and large transportation and shipping companies. For information, call (614) 923-0154 or visit www.ustankalliance.com.