JOHNSON: I think it really depends on what UL
allows and what they require from a kit. If the kit involves
the entire hydraulic tree, that would be significant in
terms of cost and installation. And that would be
detrimental to the market demand. At this point we
just don’t know.
JOURNAL: We’ve been talking about E15, because
that’s where the reality is right now. But many
people expect that to get past the blend wall, we’re
not going to stop at E15. We will have to go higher.
Would you anticipate extending your warranty to
E20 or E25 if that time comes?
NEGLEY: No, not for standard equipment. E15 is the
JOHNSON: Our testing indicates the performance and
requirements change as you exceed ethanol levels above
E15. So, we would recommend a flex-unit for anything
JOURNAL: You guys don’t seem to be confused,
but is there confusion about all of this out there in
NEGLEY: Yes, there is confusion—and understandably
so. You have essentially a conflict between a national
fuel policy—represented by the RFS2—and prevailing
regulatory policies. Then, there is the issue of the
bifurcated EPA [Environmental Protection Agency] fuels
position allowing E15 beginning with the 2001 model
year vehicles and E10 for older models. There’s a lot of
complexity, and I don’t think we can over-communicate
on all of this.
JOURNAL: Are you seeing an uptick in demand for
the E15 dispensers? Has that happened, or is the
whole market out there waiting—hoping it all goes
away or at least hoping for more clarity?
JOHNSON: Yes, folks are engaged. If they see an
opportunity to market higher blends of ethanol to their
favor, they’re looking at installing the new dispensers.
NEGLEY: The activity level has picked up significantly.
There certainly are those who are sitting on the sidelines
waiting to see how it is all going to come out—what
“Our testing indicates the
performance and requirements
change as you exceed ethanol
levels above E15. So, we would
recommend a flex-unit for
anything above E15.”
UL and EPA are going to do in terms of the listing
requirements, labeling issues and other testing.
JOURNAL: So, the bottom line is that you two
believe dispensers listed to E10 can safely
dispense E15, and you are publicly stating that
your dispensers will be compatible with blends
up to E15. That’s what you are warranting. An
individual marketer’s position depends on the local
authority having jurisdiction, its bank covenants,
its insurance policies and those sorts of things. But
as far as you are concerned, dispensers listed to E10
can safely dispense E15 throughout the operational
life of that equipment. Is that correct?
NEGLEY: Yes. I’d be comfortable telling anyone that
JOHNSON: Yes, that would be accurate.