Forecourt Trader - 30 years at the heart of the fuel retailing community

Fuel drivers

02 November, 2009
Page 27 

Time was when automotive fuel led a relatively simple life flowing in and out of various tanks without too much concern for its contents. Then the lead was taken out. Then the sulphur. Then came a complex web of eco-driven legislation which is currently driving many of those concerned to among other things sigh rather dramatically when questioned on the subject.

They're right to. It's serious stuff. There's a huge cost implication for everyone. Some owners of small service stations are contemplating their futures as petrol retailers; motorists are becoming confused about whether the fuel going into their tanks could invalidate their warranty; and oil companies are having to heave their refineries into complying with an ever-complex schedule of targets.

It's the role of associations such as the UK Petroleum Industry Association (UKPIA), to keep everyone in the loop as to what's going on and what the implications are. Earlier this year it was pleased to announce that the UK oil industry had exceeded the Government's volume target for biofuel content in the first full year of the Renewable Transport Fuel Obligation (RTFO), which started on April 15, 2008.

The RTFO's current targets are 2.5% by volume in biofuels in 2008/2009; 3.25% in 2009/2010; 3.5% in 2010/11; 4% in 2011/12; 4.5% in 2012/13; and 5% in 2013/14. Further increases in the level of biofuels to 10% by energy have been agreed, subject to review in 2014, under the Renewable Energy Directive.

The main biofuels available in the UK are bioethanol and FAME (biodiesel). Road fuel quality standards currently permit these fuels to be blended up to 5% by volume with petrol and diesel respectively. Vehicles require no modification to use this level of blend. But a revised limit of 7% FAME (B7) has been adopted this summer; and for ethanol a revised limit of 10% will be adopted in 2010/11. But many oil companies have already begun to roll out petrol with up to 5% ethanol content (E5). RTFO targets are by volume and have so far been met through the biofuel content of diesel. Now the industry is under pressure to meet the next targets, hence retailers in areas where the terminals have come on stream with E5, have been receiving instructions about how to handle the new fuel.

With biodiesel the problem has been the well-documented bugs growing in the tank. With ethanol-blended petrol the problem is water contamination. Both fuels have required retailers to ensure rigorous tank and pipework-cleaning programmes. With E5 retailers are being told there should be no water or sludge prior to the first delivery, and that the tank is filled to at least 80% capacity. It is these strict guidelines that is scaring many smaller retailers, particularly when the cost of cleaning a tank can be in the region of £400-£500 a time.

There is more gloom up ahead according to UKPIA's NIck Vandervell, who was clearly not looking forward to the forthcoming consultations to put the Renewable Energy Directive and the Fuels Quality Directive into UK law. "Effectively, to meet the targets for Greenhouse Gas (GHG) and energy reduction from 2015 onwards up to 2020, it is likely that higher blends of biofuels will be required..." he says. "Post 2013 higher blends of E10 and B7 will be necessary to start with, perhaps increasing to higher blends for both petrol and diesel on forecourts that have the ability, potentially, to handle four grades ie E10 and B7, plus two further higher blends of petrol and diesel. A number of practical, logistical and consumer issues arise, including how people will be encouraged to buy higher biofuel blend fuels."

Biofuels developments

But while progress in achieving RTFO targets so far has been good, there have been widespread concerns about the sustainability of some source material used in biofuels, hence there is a proliferation of development work into this area. One of the most high profile is ExxonMobil's plan to invest more than $600 million over the next five years on a new biofuels programme, following the announcement of its alliance with leading biotech company, Synthetic Genomics Inc. The plan is to research and develop next-generation biofuels from photosynthetic algae, which it believes is the most promising source of advanced biofuel, in that it could avoid many of the downsides of today's biofuels ie competition with food crops. The company claims it could also ease emissions and work within the existing motor technology and logistics.

It could be transported through existing pipelines and sold through existing service stations. "Meeting the world's growing energy demands will require a multitude of technologies and energy sources," says Dr Emil Jacobs, ExxonMobil's vice president of research and development. "We believe that biofuel produced by algae could be a meaningful part of the solution in the future if our efforts result in an economically viable, low-net carbon emission transportation fuel."

LPG fights back

While much of the focus in the fuels market is on biofuels, suppliers of liquefied petroleum gas are keen to point out the merits of this alternative fuel. Chris Taylor, development executive at Calor Autogas, says LPG is by far the most widely available alternative fuel available in the UK. He says a record number of LPG conversions took place last year, with the total number of LPG vehicles on the road now standing at around 155,000.

"We had a record-breaking month in May, selling five million litres of Autogas. Vehicles running on LPG produce far fewer harmful emissions that contribute to environmental and health problems than traditional road fuels."

The company recently announced the availability of LPG from Shell Salterhebble on the A629 between Halifax and Junction 24 of the M62. There are around 220 outlets currently supplied by Autogas in the UK, with the company expecting to open 15 new LPG outlets this year.

Buncefield plans

Last month Total launched a pre-planning application consultation about its plans to redevelop the remaining part of the Buncefield oil complex in Hemel Hempstead which used to supply 20% of fuels to the south east before disaster struck in December 2005.

The Buncefield complex is an important component of the UK's fuel distribution and storage system. It is described as the hub in the network of underground fuel pipelines, providing essential fuel supplies to the south east and Heathrow airport. Following the 2005 incident a thorough investigation was undertaken by the Buncefield Major Incident Investigation Board the ensuing recommendations have been incorporated in Total's new plans.

The Buncefield complex has alrady been brought back into production with one fully operational terminal distributing aviation and ground fuels. Total's proposal will complete the redevelopment of the complex, reintroducing fuel storage and distribution, and including a rebuilt road tanker loading area, and a control administration building.





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Weekly retail fuel prices: 2 October 2017
RegionDieselLPGSuper ULUL
East120.5363.90127.17119.00
East Midlands120.03127.76118.80
London120.3757.90128.81118.85
North East119.80129.71118.46
North West120.19127.87118.63
Northern Ireland119.22125.23117.53
Scotland120.2463.80126.78118.50
South East120.7259.90129.39119.48
South West120.39128.00119.02
Wales120.0459.90126.47118.61
West Midlands120.0865.90128.12118.84
Yorkshire & Humber119.73127.02118.57

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