Could Wal-Mart tip the scales on E85

There’s been little news on Saab’s intentions regarding whether or not they’ll bring the Biopower range to the US market. Diesel’s out for the time being due to the current engine in Europe being incompatible with 2007 US emissions regulations. Biopower’s a possibility, but the costs of compliance, coupled with Saab’s small marketshare and limited access to E85 fuel for US consumers makes it a decision that has to be carefully considered.

There’s news via CNN Money today that may contribute to crossing one of those barriers off the list.

You won’t be surprised to learn that the big oil companies are not, as a rule, interested in selling E85.

But Wal-Mart is. The giant retailer is considering 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.

It could also decide to sell ethanol in a partnership with Murphy Oil Corp, which operates about 946 gas stations in Wal-Mart parking lots, and there’s no reason why Wal-Mart couldn’t sell E85 – which it calls “America’s Fuel” – at the rest of its 3,000 U.S. stores.

“Our goal would be to make E-85 available across the U.S.,” Rich Ezell, senior strategy manager of fuel at Wal-Mart, said recently.

Wal-Mart’s decision on this isn’t final. There’s efficiency, transportation and even political issues that are still to be considered. An improvement in cellulosic technology would help no end.

If it happens though, Saab USA should have Biopower versions of both the 9-5 and 9-3 waiting in the wings to take full advantage.

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  1. I was going to post that article on here! I think Wal-Mart is waiting to see if the e85 industry will develop technology to process cellulose, instead of food.

  2. I suspect there is little overlap between Saab’s customer base and Wal-Mart’s. Anyone who appreciates minimalism and intelligent design will run screaming out of a Wal-Mart as fast as they can.

    Where there is overlap is domestic pickup trucks and SUV’s — those big GM FlexFuel vehicles, a lot of them get parked in the Wal-Mart lot.

    There is a chicken and the egg problem with getting E85 off the ground, and this might solve it. It may be one of the few socially constructive things Wal-Mart has ever done.

  3. Greg:

    Get off your high horse and come live with the rest of us. Wal-Mart is the smart buy on most items that I need for daily living, so I shop there. In my view, Saab isn’t minimalist, it’s form-follows-function. Wal-Mart is an excellent example of that philosophy, too.

    Wal-Mart’s ubiquity would give E85 instant credibility. And, as mentioned, it’s a retail channel outside the current fuel supply chain that is actually interested in distributing fuel. Murphy Oil,has only one refinery,’s not the most modern — and I assume it’s not very competitive. I guess that’s why they are interested.

    Saab is positioned to take advantage of E85, and we have a potential retail channel. Now we simply have to figure out how to make it economically!

  4. anything that gets biofuel distribution out of the hands of the traditional oil companies is A Good Thing™. i really wish new biofuel-only distributor/retailer chains were cropping up.

  5. Don’t like walmart much but this might be the fuel/car industry move of the decade if it comes off. The tipping point, if you like.

  6. Well, the Wal-Mart good or bad debate is beyond the scope of this blog.

    But do compare the parking lots at Wal-Mart’Sam’s Club to the parking lots at Costco. There’s a lot of Ford and GM at Wal-Mart, and a lot of late model European and Japanese luxury marques at Costco. Very different demographics.

    If Wal-Mart does the E85 thing, it’ll be great in getting E85 the critical mass it needs to take off.

    But I don’t think Saab owners will be going to Wal-Mart just for the E85.

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