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Gulf Ethanol's Markets and Marketing

The US ethanol market has grown exponentially over the past few years, far more than any other alternative fuel. Demand for 10% ethanol blend required for MTBE replacement continues to grow. Ethanol to supply the growing number of E85 fueling stations is in desperate need. Total ethanol demand could grow to as much as 50 billion gallons a year (Source: The New York Times).

Automakers will produce about 700,000 E85 vehicles in 20 different makes and models for the 2006 model year, in comparison to a handful produced just a few years ago. These Flex Fuel Vehicles do not carry price penalties, unlike other alternative-fuel vehicles. Federal and state incentives are currently in place to promote ethanol use.

Gulf Ethanol's energy-marketing team has a combined 80 years of experience in the petroleum industry, international logistics and trade. Initial marketing is focused on the East, West and Gulf Coasts, where demand is highest, and the difficulties of overland ethanol transport, and shortage of rail facilities make seagoing transport advantageous.

Wal-Mart (NYSE:WMT) recently announced their consideration for selling ethanol at the eight stations that it operates at Wal-Mart Stores and at about 380 more that it runs as part of its Sam's Clubs division. And could expand into 946 operating stations in partnership with Murphy Oil Corp and the remaining 3,000 nationwide. (Source Marc Gunther, senior writer Fortune Magazine)

The 2005 Renewable Fuels Standard Act mandates that ethanol production double by 2010. Companies are racing to build ethanol plants as the oil industry uses the fuel as a replacement for gasoline additive MTBE, a suspected carcinogen. Growing U.S. motor fuel demand means ethanol production will need to grow by about 1.5 billion gallons per year.(Source: CNN Money

As recently as August, General Motors (NYSE:GM), Ford (NYSE:F) and DaimlerChrysler (NYSE:DCX) are committed to doubling their production of Flex Fuel vehicles by 2010. Currently over 5 million cars run on ethanol. Only about 800 service stations in the United States, out of a total of 168,000, pump E85. Dodge.com/flexfuel

The National Ethanol Vehicle Coalition keeps a list of E85 stations (http://www.e85refueling.com/) online. Philip J. Lampert, the executive director, says the number of stations has doubled in the past two years.
 
 
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