Domestic Fuel

Some companies with fleets of buses, trucks and other diesel-powered vehicles have already test driven and seen the benefits of newly reformulated Dieselex Gold, which was officially launched by GROWMARK and its FS member cooperatives at an event this week in East Peoria, Illinois.

One of those who is very satisfied with the product is Rick Tieken with Peoria’s CityLink mass transit system. “We first started using Dieselex Gold on a test program where they guaranteed we’d get three percent improvement in fuel economy,” said Tieken. “We used it for 90 days and within days of putting it in we saw an 8.5% improvement in fuel economy.” By the end of the trial period, that leveled off to about 6.5% – more than twice what had been promised.

Tieken says CityLink has been using biodiesel for years with a B20 blend and saw the improvement in fuel economy when blending the biodiesel with Dieselex Gold. “We’re 100% pleased with it,” he said. “It’s a great product that works fabulously.”

The new Dieselex Gold formulation was developed specifically to improve the performance of ultra low sulfur diesel (ULSD) and biodiesel blended fuels in newer diesel engines built with tougher emissions standards to be better for the environment.

Listen to my interview with Rick Tieken here: Rick Tieken, CityLink

Dieselex Gold Rush Photos

GROWMARK and its member cooperatives are excited about the latest formulation of their flagship fuel, Dieselex Gold.

“It’s time to get excited and it’s time to show some passion,” said Kevin Carroll, GROWMARK Vice President for Energy, at the new reformulation “Gold Rush” kick off event for FS member cooperatives in East Peoria on Tuesday.

“Dieselex Gold is a product that has it’s beginning roots at least as Dieselex back in 1952,” he continued. “It really goes back to the beginning of our system, which was founded to provide quality petroleum products to our farmer patrons.” Carroll got a kick out of showing the 400 attendees at the event a receipt for the purchase of Dieselex from 1959. “Can you believe Dieselex at that time was under 15 and a half cents a gallon?”

Four specific areas were upgraded in the new Dieselex Gold formulation – detergency, corrosion inhibitors, stabilizing agents, and demulsifiers. In combination, these work together to fight sticky deposits known as Internal Diesel Injector Deposits (IDID) and improve the performance of ultra low sulfur diesel (ULSD) and biodiesel blended fuels.

Dieselex Gold Rush Photos

The 59th Speaker of the House, who played an active role in the development of current energy policy, spoke about leadership and the importance of the nation’s energy security during an appearance at the GROWMARK, FS System “Gold Rush” event in East Peoria, Illinois to introduce re-formulated Dieselex Gold.

Dennis Hastert, a native of Illinois, told the group that growing up on a farm taught him the responsibility and leadership that helped serve him well in public life. He spoke of being an “accidental Speaker” and becoming a “war-time Speaker” after 9/11.

When asked by a member of the audience about energy policy, Hastert was adamant about the importance of renewable fuels and ethanol in particular. “We need to use ethanol,” he said. “I fought for ethanol from the time that I was in Congress for 15 years and finally got through the Ways and Means Committee along with a guy named Nussle from Iowa and we got ethanol with the tax credits so it could be a viable product. If we sit back and don’t do anything about it, we’re going to lose it.”

Listen to Speaker Hastert’s address to the FS Gold Rush event: Speaker of the House Dennis Hastert

I also had the opportunity to interview Hastert after his address about his comments, energy and farm policy. Listen to that interview here: Dennis Hastert Interview

See photos from the FS Dieselex Gold Rush event

With the official roll out of the FS Energy Products newly-reformulated premium diesel fuel Dieselex Gold coming up next week, we got a little preview from GROWMARK marketing manager for refined and renewable fuels Mark Dehner at last week’s National Biodiesel Conference.

“Our Dieselex product was first introduced in the market place in 1952,” Dehner says, explaining that it was re-formulated in 2002 and re-named Dieselex Gold. “We’re re-introducing and re-formulating the Dieselex Gold product and kicking it off to our member co-operatives in late February.”

The product will have a new look on the marketing side and it does have some different characteristics and Dehner says biodiesel will play a role. “Through the Renewable Fuel Standard, 2012 there is a billion gallon target to hit, and while EPA has not yet ruled on 2013, it appears it will be 1.2 billion gallons, so biodiesel is here to stay,” he said.

Listen to our interview with Mark Dehner from the National Biodiesel Conference here: Mark Dehner Interview

The year was 1927 when the Illinois Farm Supply Company was chartered under the State of Illinois Cooperative Marketing Act of 1923 to be a wholesale distributor of petroleum and lubricant products.

From that humble start in nine Illinois counties, the Illinois Farm Supply Company eventually became the multi-billion dollar, multi-faceted farm cooperative system that is know today as GROWMARK.

In honor of the cooperative’s 85th anniversary this year, a new history section has been added to the GROWMARK’s website and the early years especially provide an interesting glimpse into the importance of fuel for farming.

Among the milestones marked in the first years of the cooperative was in 1933 when “The first gasoline blend (10%) with alcohol produced from corn was brought to market to address the corn surplus problem. This was a product ahead of its time and was later withdrawn because of low volume.”

Read more about the GROWMARK history by clicking on the “Our History” tab on www.growmark.com

GROWMARK and FS Energy have given a whole new meaning to energy efficiency with the wireless Energy Business System (wEBS) which has streamlined their fuel delivery system.

GROWMARK Information Management Solutions director Keith Milburn says wEBS was developed as a fuel billing solution that makes the record keeping process easier by providing instantaneous information such as fuel type, tank sizes, taxes and credits.

Milburn says they developed wEBS when the fuel business started to get more complicated a few years ago. “We no longer just handle gasoline and diesel,” he said. “We have high sulfur, low sulfur, bio or soy diesel, ethanol blends – and all the relevant taxes have made it very complicated given those combination of blends.”

“There’s two components of wEBS,” Milburn says. “There’s the back office or centralized data set and then the hand held on the truck level.” The back office includes not only customer information, but every tank that each delivery truck services. “The system identifies each tank with a bar code that tells who the customer is, what product types, relevant taxes, discounts, and if there have fuel contracted at a certain price,” Milburn explains. So all the delivery driver has to do is pump the fuel and within minutes the transaction is recorded and an email confirmation is sent to the customer.

Milburn says this “evolution in the energy business” was first introduced as a pilot program in January 2010 with two trucks and it has since grown to incorporate about 95 trucks that essentially function as mobile hot spots to communicate information. And he says the system is continuing to evolve with the technology.

Find out more about the wEBS system in this interview with Keith Milburn here: Keith Milburn Interview

Three new pumps that can dispense a range of ethanol blended fuel were officially opened in Princeton, Illinois last week.

Growth Energy, Horizon Fuels, the American Lung Association and Marquis Energy partnered to help with the promotions and labeling for the three new Flex Fuel pumps at the Princeton Fast Stop. “It was time to upgrade our gasoline pumps, so we went with Flex Fuel pumps that will give our customers a choice between E85, E30 and E20,” said Bob Sandhu, owner of Princeton Fast stop and the CEO and President of the MGS Petro Inc. Princeton Fast Stop celebrated the opening of the pumps last Friday, December 16, with special deals on ethanol blends and other promotions. Sandhu is picture here at one of the new pumps with Mark Orr, general manager of Ag View FS in Princeton, a local farmers cooperative that is part of the GROWMARK system.

“By giving consumers more choices at the pump that include higher blends of clean, green homegrown ethanol, we’re not only helping decrease our dependence on foreign oil, but also supporting our local farmers,” said Growth Energy Market Development Vice President Mike O’Brien.

Marquis Energy has a 140 million gallon per year ethanol production facility located just southeast of Princeton in Hennepin, Illinois. “We want consumers right here at home to understand that and now they have the chance to choose for themselves. Marquis is glad people in our local community will be able to use clean burning, renewable fuel that is made just 30 miles away,” said Director of Public Relations of Marquis Energy, Dana Gustafson.

Marquis Energy has contracted with Horizon Fuels to develop opportunities to install Flex Fuel pumps at area retail gas stations and then manage the project scope, equipment installation and promotional efforts for each.

2011 has been a challenging year for getting anything done in Washington DC, including as it relates to both agriculture and energy policy.

“In agriculture, when it comes to energy, we want reliable, economically competitive sources,” says GROWMARK government affairs director Chuck Spencer. “As a country, what we are looking for is energy security and that’s going to come from a mix of both domestic production and allies like Canada.”

When it comes to domestically-produced ethanol, Spencer says the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year provides new opportunities for the industry. “The domestic ethanol industry has been preparing for this moment for some time,” he said. “The energy table is rather large and there’s plenty of chairs at the table, particularly biofuels of all types. We’re going to see our fuel sources continue to diversify and in that diversity is going to come strength.”

Since the GROWMARK system is a cooperative that represents farmers throughout the Midwest and Ontario, Spencer says they are looking forward to the challenge of agriculture being able to supply more of our energy needs. “We’re all looking forward to more corn and soybean acres being planted. Farmers are responding to market signals to meet the demand for food products, renewable products, fiber and proteins for the livestock industry,” he said.

Spencer notes that the Renewable Fuels Standard is the corner stone of domestic renewable fuel policy and it should continue. “Considering that biodiesel is an advanced biofuel and ethanol can certainly become one as well, we have continued promise as far as our ability to produce renewable fuels and what that means to local economies,” he added.

Spencer also discusses what lies ahead in 2012 with the need to come up with a new Farm Bill during an election year with a huge federal deficit.
Listen to my conversation with Chuck Spencer here: Chuck Spencer Interview

Propane supplies are in good shape going into the winter, according to Randy Miller, GROWMARK director of propane operations.

Regarding total inventories, Randy says 60 million barrels is the total to shoot for to feel comfortable going into the winter. “And we just did get to 60 million,” he said recently. “We’ve had some pretty good inventory increases the last few weeks.”

He says that Midwest stocks are pretty good, but stocks overall are behind last year and the five year average. “Nothing to feel short about but we are behind some nine percent compared to a year ago,” he said. “Most of that is on the Gulf Coast where we’ve seen a lot of propane exports.”

Propane exports from the U.S. are up this year, although they have dropped off a bit in the last month or so. “But still we are seeing tremendous exports compared to what we’ve ever seen before in history,” Miller said.

GROWMARK is a leading provider of a full range of energy products and services, including a complete line of quality lubricants, fuel and fuel additives, and dependable heating and drying with GROWMARK propane.

Listen to an interview with Randy Miller about propane supplies: Randy Miller Interview

One of the benefits of membership in the GROWMARK cooperative system is daily information about the energy markets and recommendations on contracting fuel at different times of the year.

Harry Cooney is manager of customer risk management for GROWMARK Energy and he is constantly keeping an eye on the energy complex, especially gasoline, propane and diesel fuel. He says the primary influences on the energy market lately have been the situation in Europe, the value of the dollar and the stock market.

“In the past six months to a year, there’s been a strong connection between the stock markets and the energy markets,” Cooney said. “When things look bad in Europe, then our stock market tends to fall off and when the stock market falls off the energy markets tend to fall off.” He says world events in the currency and stock markets and whether the economy is strengthening or weakening have more impact on energy markets than public policy decisions, like the blenders tax credit for ethanol and the Renewable Fuels Standard.

In the diesel market, Cooney says we are seeing strong demand and falling stocks. “Diesel stocks have fallen under the five year average for the first time in many months,” he said. “The economy is starting to come around so stocks are coming down and diesel demand is back well over the five year average after just bottoming in July.”

As propane users look ahead to contracting for 2012, Cooney says they are currently making recommendations for summer through winter of next year. “Given the somewhat tight stocks situation and the fact that crude oil tends to want to go up, it makes us want to be a buyer of propane,” he said.

Listen to my interview with Harry Cooney here: Harry Cooney Interview

There’s a chill in the air and winter weather is just around the corner. After last winter’s extremely cold temperatures, it’s especially important for diesel fuel users to make sure they are ready.

That means winter treatment for diesel fuel, according to GROWMARK marketing manager for refined and renewable fuels Mark Dehner. “Diesel fuel is impacted by cold temperatures. There are paraffins, or wax, in diesel fuel and as the temperature decreases these paraffins start to precipitate out of the fuel and may get large enough so they’ll plug filters or fuel lines,” Dehner says.

As a diesel fuel supplier, GROWMARK takes pains to make sure that doesn’t happen for their customers by blending number one diesel fuel into number two to dilute the wax, or they will use chemical treatments. “Chemistry usually involves wax modifiers that will not allow them to conglomerate,” he explains.

GROWMARK also sells biodiesel blends in the winter. “A lot of our customers use biodiesel throughout the wintertime, but we have to manage it differently,” Dehner says. “We may use a combination of cold flow chemistry along with some blending of number one.”

Dehner says it all comes down to fuel quality maintenance.

Listen to my interview with Mark Dehner here: Mark Dehner with GROWMARK

In the home, on the farm, for businesses or for school buses, the Energy Division of GROWMARK is seeing the use of propane growing as a domestically produced, environmentally friendly fuel.

Marion Ertmer, GROWMARK Propane Marketing Manager, says some people may still think of propane as an import from the Middle East, but that’s no longer true. “Today, with the emerging sources of propane in North America, we’re actually not importing propane as a fuel, we actually have an exporting trend on propane,” he said, adding that it is a very clean fuel, similar to natural gas. “The net carbon footprint is actually much less than electricity,” said Ertmer.

Ertmer says home use of propane is also more economical than electricity. “Propane is actually about half the cost of electricity,” he said. He notes that with a propane heat and a propane-powered generator, you can be warm and have light even if the electricity goes out. “You’re never out of power with propane,” he said.

Of course, farmers are big users of propane, especially during harvest season for drying their grain, but Ertmer says the use of propane as a fuel for vehicles is an increasing new use. “Particularly school systems are looking at this for their buses,” he said, both for environmental and economic reasons. “There’s a tremendous savings on a per mile cost with propane and that’s a way for school districts to save money on their school bus fleets.”

GROWMARK sells about 300 million gallons of propane a year mainly in Illinois, Wisconsin and Iowa and is also involved in marketing wholesale propane in other parts of the country.

Listen to an interview with Marion Ertmer here: GROWMARK Propane Marketing Manager Marion Ertmer

When the cars, trucks, tractors, combines and other equipment at the 2011 Farm Progress Show in Decatur, Illinois needed fueling up, GROWMARK FS was there on-site to serve up home-grown fuel.

Mark Dehner, GROWMARK marketing manager for refined and renewable fuels, says they have been the official Farm Progress Show fuel supplier for many years. “It takes a lot of fuel. The demonstrations for tillage, for harvest, the main fuel is diesel fuel for the heavy equipment. That’s our Dieselex Gold proprietary diesel fuel with a biodiesel blend,” Dehner says. “We also have a ten percent ethanol blend gasoline for the gasoline-powered units.”

Dehner says the GROWMARK FS system started marketing ethanol back in the late 70s and they started field trials with biodiesel in the 90s and started selling it in the year 2000. “So biodiesel and ethanol have been a part of our Farm Progress Show for some time,” he said.

They have a fuel truck that stays out on the demo fields throughout the show to provide free fuel for all the equipment whenever necessary.

Listen to or download Chuck Zimmerman’s interview with Mark Dehner at FPS here: GROWMARK's Mark Dehner at Farm Progress Show

At their annual meeting last week in Chicago, the GROWMARK system reported record sales of $8.5 billion for 2010-2011, with the 2nd highest net income ever at $182 million..

Chairman of the board Dan Kelley, an Illinois grain farmer, says it has been a very good year for GROWMARK and agriculture in general. “Agriculture has been one of the stellar industries in this economic downturn over the last 2-3 years,” he said. “We have now recorded our best seven years in the history of the GROWMARK system, which is 84 years.”

Kelley says they have a long term commitment to homegrown fuels, like ethanol. “We were one of the pioneers in ethanol, probably over 30 years now since we pumped the first gallons of ethanol,” said Kelley, noting that they market rather than produce the fuel.

Listen to my interview with Dan Kelley here. GROWMARK President Dan Kelley

Renewable Fuels Association board member Ray Defenbaugh of Big River Resources West Burlington was at the annual meeting last week, as a director on the Riverland FS board in Illinois.

Defenbaugh says GROWMARK really demonstrates how well the cooperative system works. “A lot of our ethanol plants are cooperatives, GROWMARK’s a cooperative and we work well together. They recognize the importance of (ethanol) to agriculture,” he said, adding that ethanol helps support grain prices allowing farmers to afford the rising costs of fertilizer, equipment and other inputs.

Listen to or download the my interview with Ray here. Ray Defenbaugh, Big River Resources

2011 GROWMARK Annual Meeting Photos

GROWMARK is providing more homegrown fuels for members and area businesses around central Illinois.

The regional agricultural supply company bought the Menard Terminal from Magellan Midstream Partners in 2008 and today it handles gasoline, diesel, ethanol and biodiesel for FS members within a 120 mile radius, in addition to non-member companies like Casey’s and Thornton’s.

Terminal Manager Pete Nance says their market for renewable fuels continues to grow. “Right now we probably sell between 60-70 percent soy (diesel) and all of the gasoline that goes out is with alcohol,” he said during a recent tour of the facility, which is one of only two that GROWMARK owns.

GROWMARK has expanded into other areas of business besides agriculture to help their member companies continue to have the opportunity to grow. Lincoln Land FS Energy Marketing Manager Scott Long says they provide fuel for construction sites, asphalt companies and other non-agricultural clients to use their equipment and their people as efficiently as possible. “During the farming season we’re really busy, but during the other times of the year we need other income streams to support the farmers,” said Long. “We’ve grown about 70 percent in the last five years and most of that has been on the commercial side.”

Long notes that GROWMARK is one of the largest distributors of biodiesel in the nation and B11, or 11% biodiesel, is their most popular blend, for good reason. “In the state of Illinois, if you use an 11% blend, there’s no sales tax,” he said. “So it’s cost advantageous to the customers and it’s also a pretty good product to use to support our crops industry also.”

Listen to or download back to back interviews with Pete Nance and Scott Long of GROWMARK: Pete Nance and Scott Long