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Fuel for thought

31 October, 2006
Price is still the key driver for customers on the forecourt
Page 29 
Ask your customers what their priority is when filling up their cars and most of them will say cost. You see it might be trendy, even politically correct, to worry about the environment but most drivers are worried about how much it costs them to fill up on the forecourt.
According to research by the AA Motoring Trust into key issues for motorists, cost is always the top concern closely followed by congestion, with the environment much further down the list. Ruth Bridger, spokeswoman for the Trust, admits that the organisation hasn't undertaken any research recently (now that the environment and climate change are much more part of the media agenda) but adds: "Anecdotally, the majority of motorists use cost as the only consideration when buying fuel. With the very high pump prices we've seen over the past couple of years, the issue of price forms quite a large proportion of our mail/phone calls into the Trust. There are a few motorists who won't fill up at supermarkets because they think the fuel is inferior and some that will only go for the premium blends as they get better economy. But price, for most, is the key driver."According to UKPIA, petrol and diesel will remain the dominant fuels for many years but alternatives such as biofuels and autogas will be part of the mix. Apparently world oil reserves stand at three trillion barrels and UK refineries are in a good supply position, so good in fact that they can afford to export petrol. However, demand for diesel continues to increase and at times the UK has to import it.Spokesman for UKPIA, Nick Vandervell, comments: "Conventional reserves are thought to be sufficient for 40 years or more and could be augmented by other sources such as tar sands. Generally it's thought that the world will move away from conventional fossil fuels to a variety of other fuels and sources/mixes such as fossil fuels, synthetic fuels, second-generation biofuels and hydrogen."When it comes to biofuels, UKPIA reckons the industry is about to see its biggest change since the move to unleaded petrol in the late 1980s. It is of course referring to the move to 5% biofuel content in all road fuels by 2010, as laid out in the Renewable Transport Fuel Obligation. The change starts with 2.5% biofuel content in 2008/9 and 3.75% in 2009/10.One fuel that has certainly got the industry excited is BioEthanol, which is produced from agricultural produce - things like forest residue, sugar cane, sugar beet and grain - which means it's a renewable and sustainable fuel source. When mixed in high volumes with low volumes of petrol, a potent yet environmentally-friendly fuel, known as BioEthanol E85, is created.Supermarket chain Morrisons is backing it. The company unveiled the UK's first E85 pump on its Norwich forecourt in March this year and now has five pumps in East Anglia and five in Somerset. This month it will open an E85 pump in Cardiff and Phil Maud, director, petrol filling stations, has vowed that every new forecourt Morrisons opens from now on will have an E85 pump.Harvest Energy supplies Morrisons with its E85, indeed the fuel's official title is Harvest BioEthanol E85.Simon Davis, head of sales at Harvest Energy, says: "Sales have been initially slow but we have re-supplied a number of the sites with the product. We currently have an agreement to introduce Harvest BioEthanol onto three independent retailer sites in Essex, Luton and Bucks and in addition we supply the product to both General Motors and Ford for their test tracks."There has been criticism of E85-fuelled cars because they actually use more fuel than petrol-driven versions. However Davis has an answer for that: "While E85-powered cars do use more fuel, the well-to-wheel emissions are some 70% lower than unleaded petrol plus the product is 85% renewable because it is made from things like sugar beet and sugar cane and could, in theory, be made from organic household waste. In addition, the product can significantly improve the performance of a car - in the case of the Saab 9-5 BioPower by some 25%, so not only is the product green, it is also gives an improved driving experience."Davis says the hundreds of enquiries his company's had about potential car conversions is proof that customers are bothered about what they use to run their cars. However, he admits that cost is an issue. "The vehicles themselves are no more expensive than standard vehicles and conversions are not hugely expensive, the only real cost issue for consumers is the increased fuel consumption. So we, along with Morrisons, Ford, Saab and a number of green fuels supporters, are lobbying the Treasury with regards to the duty rate on E85. This is on the basis that a 20% reduction in duty will cost the Treasury nothing (due to the 20% higher fuel consumption) and will make the product cost neutral for consumers."Davis says that in countries where BioEthanol has been supported, the product and vehicles have really taken off. He points to Brazil where almost 100% of vehicles are capable of running on BioEthanol and in Sweden, where more than 90% of Saab's now sold are BioEthanol-capable.Another big supporter of biofuel is Tesco, which actually claims to be the biggest retailer of the fuel in the UK.Tesco has had biofuel blends at its petrol stations since 2003, initially as a 5% biodiesel blend retailed under the Greenergy GlobalDiesel brand. A spokesman for the supermarket giant explains: "GlobalDiesel was used as a test product - it was introduced as a third-grade product to gauge customer reaction to the idea of using a crop-based fuel in their cars."The test was so successful that today biofuels are included in Tesco's main-grade fuels. So far biodiesel and BioEthanol blends are available at more than 200 of its forecourts (50% of its network) and the company is on track for national supply from spring 2007. Its main fuel supplier is Greenergy.The Tesco spokesman continued: "Tesco is committed to using biofuels in all its fuels up to the limit permitted by fuel standards but we have to keep in mind that on fuel purchase our customers are always driven by price."All Tesco biofuel is blended in the tank, rather than splash blended. Most is sold on the forecourt as a "blind blend" and only Tesco 99 Octane, the supermarket's performance petrol, is specifically marketed as containing bioethanol. This gives the company the freedom to revert to 100% mineral fuel if the cost of using biofuel becomes a problem.Since the government's duty incentive came into effect in January 2005 it has been economical, most of the time, for Tesco to use 5% BioEthanol. The only exception to this was a short period earlier this year when high demand in the US forced BioEthanol prices to levels that made its usage disadvantageous. For this period the percentage of BioEthanol Tesco used was reduced to 3%.Texaco is another company that's active in biofuels. Spokesman Simon Tait explains: "We are conducting a series of trials with biofuels at various locations across Europe and these are producing good results."Tait says Texaco is always looking at ways to improve the environmental performance of its products and points to its recent £44m investment in the manufacturing of sulphur-free fuels at the Pembroke refinery in Wales as an example of this.When it comes to E85-enabled cars, as mentioned previously, Ford and Saab are the only real players. Ford's version is the Focus FFV (flexible fuel vehicle). According to the motor company, its price is comparable with other models, plus it's easy to use. There's no switch involved, drivers can simply fill it with either unleaded petrol or E85 and they can even mix the two. One hundred are now on the road in the UK."That might not sound a huge amount," says a spokesman for Ford, "But availability of E85 is limited to the South West and Anglia. We're in a bit of a chicken and egg situation when it comes to these cars and the fuel - there won't be more cars sold until there's greater availability of the fuel; and there won't be greater availability of the fuel until more cars are sold." However, he stressed that Ford is committed to making the cars.Other car manufacturers have been busy developing 'green' vehicles.At the Motor Show, held in London earlier this year, two new electric city cars were unveiled as well as Saab's new BioPower Hybrid Concept, which is the first-ever car to combine the use of pure bioethanol fuel and electricity. Yes it's only a concept at the moment but who knows, in a few years time it could be on the roads.---- === In brief ===l BP reports that its Targetneutral campaign - where consumers can calculate their carbon emissions and pay an appropriate amount into a fund that supports carbon-reducing initiatives - is going very well and has exceeded targets so far on the number of sign-ups and site visits.l Ford, BP and the city of Taylor in Michigan have opened a hydrogen station to fuel the Ford Focus cell cars that are being used as official city vehicles there.l BP plans to spend $500m over the next 10 years to establish a dedicated biosciences energy research laboratory attached to a major academic centre in the US or UK. The lab's work will include the development of new biofuel components and improving the efficiency of those components currently blended with transport fuels.l BP is currently finalising plans to make an E85 fuel available in one or more US markets towards the end of this year.l The first product to market from the BP/DuPont link-up is expected to be biobutanol, which will be introduced in the UK next year as a gasoline bio-component.l The EU has said that there are 17 bio-ethanol plants operating in the Community but this could rise to 63 by 2008.l The UK's Renewable Energy Association expects the EU to set a 10% biofuel target after 2010.l Total has begun selling E85 at forecourts in France and plans to have 250 E85 pumps by the end 2007 or by early 2008.l In Sweden, Volvo plans to stop manufacturing LPG cars by the end of next year so that it can concentrate on the development of flex-fuel vehicles.----=== va va voom ===Away from strictly environmental concerns, the oil companies have been busy developing fuels that are better for our cars.Total's Excellium is a case in point. Launched in 2005 it is now available across more than 500 sites. The fuel contains additives to improve the efficiency of today's cars. It is said to give drivers more miles per tank - allowing them to drive up to 30 miles further. And additional benefits include, a cleaner engine, less noise and less pollution. As Total has almost completed national rollout of Excellium Unleaded it is now looking to increase the availability of the diesel version of the fuel.Another better-for-your-car blend is BP Ultimate. Available in both diesel and unleaded, it's aimed at motorists who want to get the most out of their vehicles in terms of better fuel economy and more performance.Its big selling point is its cleaning properties that are said to clean the engine as you drive by removing the sooty deposits left behind by ordinary fuels. This improves engine performance, which results in fewer harmful emissions, and can give unleaded users up to 28 more miles per tank and diesel users up to 22 extra miles per tank. BP reports that it's been very well received by drivers, with approximately one in eight of its customers now using the fuel.In addition to BP Ultimate unleaded and diesel there's the super premium BP Ultimate unleaded 102, which is proving popular with high-performance car owners.Along with better performance BP Ultimate unleaded 102 has green credentials: the fuel contains a high-performing bio-component.BP says there is high demand for this fuel at sites near race tracks, so it therefore plans to extend availability in those areas.Then of course there's Shell's V-Power, which recently replaced Optimax. The company spent £4m on the launch to ensure that drivers were aware of the differences the fuel could make to their driving.Those differences include the use of Shell's Friction Modification Technology as used by the Formula 1 Ferrari team this year. This is designed to help the engine turn more freely and improve performance. There's also a 99 RON octane rating for more power and improved responsiveness plus a powerful cleaning formula to help the fuel to burn more effectively.