AGRIBUSINESS: Gas Tanks at the end of Insurable Life

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Fuel retailers across the state of Iowa are looking at an aging infrastructure that wasn't prepared to handle higher ethanol blends when it was installed several decades ago.

Iowa Renewable Fuels Association Executive Director Monte Shaw explains that at gas stations, it's not just underground fuel tanks, but the entire fuel system from tank to nozzle, that has either an E-10 or E-85 certification.

He says Iowa does have a compatibility law that allows equipment that isn't certified for a higher blend to dispense it anyway, provided the part manufacturer determines the equipment is compatible with the higher blend.

But Shaw says the timing is ideal for both renewable fuels, which are federally mandated beyond what the current infrastructure can handle, and for fuel retailers, who are angling for development of a cost-share program to offset the price tag of replacing their older systems.

Shaw says, "But we're now at the insurable life. It's probably a better term than a usable life, you know we're now at the end of the insurable life of these systems. And so there's literally hundreds, if not thousands, of these tanks and systems that need replaced so they can be insured. And so what this grant program's designed to do as I understand it, is not just help retailers, specifically small retailers deal with that cost, but it's to say hey, as long as we're going to replace them anyway, let's make sure every single component in that system is E-85."

Shaw adds that the Iowa RFA supports the cost-share efforts of the Petroleum Marketers and Convenience Stores of Iowa, so long as the new program stipulates new equipment purchased through it, is certified up to E-85, in order to limit liability concerns.

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