While cardlock fueling had humble beginnings as an honor based system, it has grown to encompass millions of cards in many networks across the country. From national brands such as Fleetwide/CFN and Voyager to regional networks, the advantages of each vary but all have two things in common: cards and fuel.

However, with an expanding tide of state governments mandating zero emission vehicles in 2035 (and legislation circulating at the federal level), our definition of fuel has been forced to expand beyond petroleum based products. Working in the fuel industry in California, this is has been ground zero for progressive emission restrictions for the past decade. So, we've been grappling with the coming change even at a time when viable zero emission options were scarce.

The petroleum company I worked for over the past decade was pretty forward thinking and had been running their retail stations on solar for years. We worked with the California Air Resource Board (CARB) to advise on challenges companies like ours would have in meeting regulations as well as staying up to date with ever evolving restrictions. Our company owned a commercial solar company that built solar farms, as well as two ethanol plants, both of which helped to offset our carbon footprint.

Years ago, I was tasked with researching the viability of offering zero emission fuels at our cardlock sites. Our two main electric vehicle (EV) options were hydrogen or fuel cell electric vehicle (FCEV) and Battery Electric Vehicle (BEV). Hydrogen was a more attractive alternative for us because it behaved more like our existing fuel offering. Pull in, swipe your card, fuel up and you are back on the road in 5 or ten minutes. From the supply side, it was like gas and diesel in that it would be trucked in and stored in tanks at the site. Theoretically, transactions could be processed similar to existing fuel products.

Unfortunately, hydrogen has remained far behind BEV due in part to its high infrastructure and production costs, as well as slow support by automakers. Currently, Toyota, Hyundai, and Honda produce a hydrogen model, although Jaguar has just announced a Land Rover FCEV concept. This slow acceptance have kept prices high for all related technology. When I researched equipment costs, a hydrogen dispenser alone cost $750,000. 

Ultimately, our sights settled on the the BEV market and how we could accomodate this new customer. A successful cardlock site is a numbers game. No matter the size of the site, the more vehicles that fuel up per hour, the more profitable the site. The BEV scenario throws a few curveballs to the formula on several levels.

Not all sites can accomodate one or more EV charging stations. You would need a site large enough to dedicate at least a lane dedicated for BEV that would not impede the flow of gas/diesel customers - for most cardlock sites, this means commercial customers with medium to large vehicles. Smaller sites then, could not spare the room to dedicate to longer-stay customers. For sites that could dedicate the room, it would most likely require not just the charging equipment, but an electrical upgrade to power Level 3 fast charge stations.

Whereas residential Level 1 and 2 stations cost well under $10,000, a Level 3 can cost upwards of $35,000 plus a new 480V service if not already equipped, permitting, construction costs, etc. Add to this, the utility company practice of demand charges, which are fees based on a customer’s peak electricity draw. These charges can account for 90% of a sites electricity bill even if its draw is typically very low. In many cases, it negates any profitability not to mention an accounting nightmare given the unpredictability of an accurate and/or consistent kilowatt cost. 

So, where does that leave us? If your point of view is that of a cardlock site(s) owner then it makes little sense to invest in either technology unless your market dictates it. For example, if you have a large municipality as a fleet customer that is converting its fleet to BEV or FCEV, it might be worth the investment for one site to service that customer. 

For the consumer, the options are more interesting and far less costly. The current BEV offerings continue to expand and improve, but still have not conquered the range vs. recharge stop dilemma, as well as a reduced range in cold weather. All of these will likely improve, but trying the FCEV options will provide a more "fossil fuel" experience without the emissions (although currently limited to California). 

The good news is that as we move closer to 2035, both technologies will evolve and improve, making these decisions easier. And of course, this will just apply to new vehicles, so the gas and diesel vehicles will still travel our highways for long after, further extending the EV evolution window.

When Shelter in Place orders in response to COVID-19 brought business and the economy grinding to a near halt, the effect was felt dramatically within the fuel industry. With demand falling off significantly, things got worse as a price war within the OPEC+ group sent prices plunging.

As quarantine orders eased and business started ramping up again in the last month, the picture started to improve although the numbers are still far off pace. The U.S. Energy Information Administration (EIA) showed nearly a 50% drop in demand for both gas and diesel from early March to April 2020. While those numbers have improved and are edging closer to pre-COVID numbers, price has still not caught up. Gas prices are still about 50 cents off from the same time last year while diesel is closer 70 cents below. 

Although the rise in demand and price (albeit slow) is promising, large spikes in Coronavirus cases as states rushed to reopen may affect numbers, especially if those communities roll back to control numbers. Even more troubling is the inconsistent message coming from State and Federal leadership regarding the likely course of action to respond to case surges. While the economy cannot survive another shutdown and is unlikely to pursue that course, some scaling back is certain which will have an effect on overall fuel demand.

July will likely be a key indicator in the the spread of the virus in the U.S. and our response, as well as its impact on business and the economy in general. 

The coronavirus outbreak was classified a pandemic by the World Health Organization (WHO) sending markets and fuel prices plunging. To make matter worse, the OPEC+ group could not agree on production cuts. Saudi Arabia and Russia went their separate ways, with the intent of sending more oil into an oversupplied market.

For petroleum companies with a lot of fuel in the ground, this adds more bad news to an already poor situation. Along with crude prices in the red for the third week in a row, fuel consumption will likely continue to drop as people travel far less.

While many predict bleak fuel sales due to travel bans, event cancellations, and increased telecommuting, a silver lining does exist. Online shopping is already ramping up as shoppers try to minimize human contact as well as purchase items that have sold out at brick and mortar stores. Retailers are seeing a surge in online shopping, so there will be increased fuel demand for delivery fleets. 

However, as countries lock down to combat the rapid spread of the disease, it disrupts, if not altogether shuts down the supply chain. How U.S. retailers handle supply shortages and workforce shortages will greatly affect their success through this challenging time. Fuel marketers will need to stay fluid as markets and business rise and fall throughout.