In May of 2007, Pearson Fuels was a major recipient of grant funding from the California Air Resources Board (CARB). CARB agreed to work closely with Pearson and financially support their building Ethanol (E-85) infrastructure throughout the State of California. Pearson created a model where they install an Ethanol (E85) tank and dispenser into existing gas stations for little or no cost to the station owner. Pearson was selected by CARB to implement this plan because of the uniqueness of their business model and their proven ability to work with CARB and the myriad other public agencies that are involved in the permitting and construction of an Ethanol station in the state of California. One of the best ways of understanding the barriers to market entry is to consider the fact that as of the grant date in May of 2007, the state of Minnesota had over 330 public Ethanol stations. California still had only one, Pearson Fuels.
As the first applicant in the State to apply for and receive a Research and Development permit from CARB to dispense E85, Pearson Fuels has more experience than any other organization in constructing an E85 fueling station and dispensing that fuel to the public in California.
Pearson’s model for installing the E-85 system involves contracting with an existing gas station owner to bring to their site a new E-85 dispenser. The actual cost to bring an E-85 dispenser to an existing site varies from $100,000 to $200,000. Additionally the permitting process from CARB makes it almost impossible for a station owner to install E-85 without outside help. In short, CARB’s position has been that they are only permitting Research and Development E-85 stations at this point and that they currently are not interested in having any more of them. Many station owners have contacted CARB directly and ultimately told that CARB is not permitting any other E-85 sites for now. If an agreement is made between Pearson and the station owner, Pearson will be responsible for acquiring all the appropriate permits. This can be almost as valuable to the station owner as the funds Pearson brings to the project.
Part of what Pearson brings to the table is the long-standing relationship with CARB and the financial backing from CARB to help bring E-85 to the public. The station owner will contract with Pearson for Pearson to install the station at little or no cost. In exchange for Pearson bringing the dispenser and tanks to the existing station, the station owner signs a fuel supply contract with Pearson for the delivery of the E-85 fuel. Pearson does not generate any income from the station construction and the recipient of the E-85 station will have the equipment, paid for by the grant, deeded to them at the end of the construction.
There is significant interest from many station owners around the state to participate with Pearson in this program. All the sites have not yet been selected. All new E-85 sites must be in existing or under construction gasoline or diesel fueling stations. Site selection will be determined at Pearson’s discretion and will be selected based on some of the following factors: current fuel throughput, station location, station amenities, demographics, available space, site control issues, commitment from the local air district to E85 fueling and commitment from the local community including the commitment of local private and municipal fleets to use the facility.
Since there is not unlimited funding for this program, time is of the essence and interested applicants should fill out the application and send it to us right away. If the application is completely filled out and sent to us, we commit to you an initial response within 3 business days.