In sign of times, Lawrence gas station owner pulls back a bit on alternative fuels; reports show summer gas prices likely to be higher
I had a reader ask me a question, and this one I can actually repeat in a family-oriented newspaper: Did Lawrence’s Zarco fueling stations give up on selling E-15 gasoline, the ethanol-based fuel that was supposed to put a dent in Big Oil's stranglehold on our wallets?
The answer is no, it did not. But it is a reasonable question because you may have noticed that the Zarco American Fuels station at 1500 E. 23rd St. no longer lists the E-15 product on its sign. That location has stopped selling the E-15 gasoline. But its sister station at Ninth and Iowa streets continues to sell the product. E-15 gasoline is a bit different from what you normally get at the pump because it has 15 percent ethanol. Most other gas brands have ethanol totals at 10 percent or less. The Zarco decision to start offering an E-15 variety was kind of a big deal because Lawrence-based Zarco became the first station in the country to start selling it in 2012. Big Oil did not like that decision, and Zarco leader Scott Zaremba actually ended a 28-year relationship with Phillips 66 to continue selling the product.
But at the 23rd Street store, Zaremba removed the product a couple of months ago and went a different direction. He’s now selling a super premium brand of fuel that has no ethanol in it. Boaters, lawn mower users and other owners of small engines often like fuel free of ethanol because the corn-based ethanol can cause some complications in certain types of small engines.
In some other ways, though, the change is a sign of the times. Oil is cheaper now than it was in 2012 when Zaremba was making the E-15 push. He expects that will be the case for the foreseeable future, which means pressure to create demand for more alternative fuels is waning.
“I don’t think we’re going to see any big advancements in new fuels for quite awhile,” Zaremba said.
That doesn’t mean some of the alternative fuel products —think E-85 ethanol for flex fuel vehicles or compressed natural gas for specially fitted vehicles — will go away. Zaremba thinks the infrastructure will remain in place to deliver those fuels, and they’ll be waiting in the wings if the oil markets take a dramatic turn upward. But Zaremba doesn’t see the markets moving that way anytime soon, as drilling technology has opened up new sources of American oil.
“We have huge domestic crude oil production that we didn’t use to have,” Zaremba said. “South of a nuclear war, we are going to be stable for transportation energy needs for decades to come.”
• The signs you may have noticed at the two Zarco stations in town are ones advertising high-tech car washes coming soon to both the 23rd Street and Iowa Street locations. But those signs have been up for quite awhile, and construction work hasn’t yet started on the tunnel car washes. For a time, an excavator was even on site to presumably begin tearing down the former Sandbar sub sandwich shop near Ninth and Iowa to make way for the 150-foot car wash there. But then it didn’t happen.
Zaremba, though, tells me that the car washes still will happen.
“I had the plans all set once, and then I decided I needed to look at them a little closer,” Zaremba said. “I have to be comfortable with the equipment layout.”
The tunnel car wash industry has turned competitive in Lawrence. Shortly after Zaremba announced he was going to build a tunnel car wash at his 23rd Street store, an out out-of-state company struck a deal to buy vacant ground next to QuikTrip — and just down the block from Zarco — to build a large tunnel car wash. That location is now open.
• While we are talking about gasoline, we might as well talk about one of Lawrence’s favorite subjects: gas prices. We are starting to get into prime driving season, and the latest report gives you reason to worry that filling up the family cruiser won’t be as cheap this summer.
The auto club AAA of Kansas released its latest report detailing fuel prices for a host of Kansas communities. It showed that while prices had started to drop recently, they were still significantly ahead of where they were a year ago. And to the chagrin of many local motorists, it found that Lawrence prices were in a familiar place — right near the top.
Here’s a look at prices across the state and how they compared with the same period a year ago:
— Hays: $2.31, up from $1.98 a year ago
— Lawrence: $2.28, up from $2.02 a year ago
— Garden City: $2.28, up from $2 a year ago
— Kansas City, Kan.: $2.27, up from $2 a year ago
— Topeka: $2.26, up from $1.96 a year ago.
— Wichita: $2.21, up from $2.02 a year ago
— Emporia: $2.20, up from $2.02 a year ago
— Salina: $2.19, up from $1.90 a year ago
— Pittsburg: $2.15, up from $1.88 a year ago
— Manhattan: $2.13, up from $1.98 a year ago
— Kansas average: $2.22, up from $1.99 a year ago
— National average: $2.39, up from $2.21 a year ago.
Of course, in the time it took you to read that list, gasoline prices may have changed a couple of times. They are volatile. But the U.S. Energy Information Administration does put out a forecast. Its latest forecast for the April through September summer driving season predicts nationally that gasoline prices will be about 10 percent higher than they were last year.
A bevy of high-tech car washes set to come to Lawrence; businessman confirms he’s looking at commercial, industrial options for site along SLT
Lawrence gets on its binges. One not long ago was fried chicken. For awhile, the only thing more frequent than a new fried chicken restaurant in Lawrence was another sharp pain in my chest. Well, now it appears to be tunnel car washes. Three plans have been filed with the city to build 150-foot tunnel car washes in the city.
Perhaps the chicken restaurants and the car washes are related. (It would be more environmentally friendly to push me through a car wash than to provide me two pallets of wet wipes.) Regardless, you soon should have no excuses for a dirty car.
The owner of the Lawrence-based Zarco convenience store chain is set to begin construction on a new car wash along Iowa Street, and has filed plans at City Hall to build another one on 23rd Street. Meanwhile, an Illinois-based company has filed plans to build a similar tunnel car wash just down the street from Zarco’s 23rd Street location.
First, the Zarco plans: Lawrence businessman and Zarco leader Scott Zaremba said construction is expected to begin in the next 30 days on a new tunnel car wash that will be located on his property near Ninth and Iowa streets.
As we have reported, plans call for the old Phillips 66 station and the old Amoco station — more recently it was a brightly colored Sandbar Subs shop — to be torn down to make way for the high-tech car wash. Zaremba said the new car wash will be about four times as large as the small automatic car wash that is on the property today.
“And it will be a tunnel car wash,” Zaremba said. “We will be able to wash cars much quicker. That’s the big thing so that people don’t have to spend their time waiting.”
The car wash also will be connected to the fuel pumps at Zaremba’s adjacent American Fuels station, meaning that customers can pay for a car wash at the pump.
The Ninth and Iowa project will be good practice for Zaremba’s 23rd Street project. Zaremba said plans call for the same type of car wash to be installed at his convenience store/fueling station at 1500 E. 23rd St.
The existing store at the 23rd Street location will remain unchanged, but some diesel fuel pumps behind the building will be moved. The plans, however, do call for some changes on 23rd Street. The plan proposes a new right-turn lane for motorists using the eastern driveway of the property.
Look for more changes just down the road. Illinois-based Peak Inc. has a deal to buy a portion of the long-vacant lot just east of the QuikTrip at 23rd and Haskell. Plans filed at City Hall call for an approximately 5,000 square-foot automated tunnel car wash, plus 32 stalls equipped with vacuum cleaners for your vehicle.
The project will be on the eastern half of the vacant lot, near the River Rock Family Dental building. The project, however, is not proposing another new curb cut for busy 23rd Street. Instead, car wash customers will use the 23rd Street curb cut that leads to the QuikTrip property. The project will still leave a little less than an acre of vacant property near the QuikTrip that could be developed in the future.
As for the car wash, Brian Sturm with Lawrence’s Landplan Engineering, said the project hopes to begin construction this fall and open in early 2017.
Zaremba, who is using Lawrence-based Paul Werner Architects to design his project, said he also hopes to have the car washes open in early spring.
In other news and notes from around town:
• Car washes aren’t the only thing on the mind of Zaremba. He confirmed to me that he is in the process of preparing a concept plan for development for what will be the new intersection of the South Lawrence Trafficway and Haskell Avenue.
An entity led by Zaremba owns the approximately 18 acres at the northwest corner of 31st and Haskell. Some of you may remember the site as the location of the old LRM asphalt — or perhaps it was a concrete — plant The site now stores some vehicles, mulch and other items. But the property is zoned for heavy industrial use. Zaremba said that could still be a possibility, but more commercial or retail uses also may be a possibility. Of course, a gas station — perhaps a pretty large one — also may make some sense there.
The property is well situated. That portion of the South Lawrence Trafficway has only three interchanges, and Haskell is one of them.
“I feel like it is going to be a prime entrance into the city,” Zaremba said.
He said he doesn’t have any firm plans about what type of development he will propose to the city for the location. He has been adding fill dirt to the location to raise the elevation of the property, which is near the Haskell and Baker Wetlands.
“I want to see what we can bring to the site,” he said. “Right now it is zoned heavy industrial. It is kind of wide open for what could happen there.”
It will be one of several locations to keep an eye on as that leg of the South Lawrence Trafficway opens for traffic. As traffic patterns in the city change significantly, there will be new development pressures emerge along the trafficway. One of the greater questions at City Hall will be how this city commission responds to those pressures.
Plans call for pair of buildings to be demolished near Ninth and Iowa to make way for high-tech car wash; Zarco owner launches tech product for convenience store industry
They say the best way to make it rain is to wash your car. Given that we already have had a lot of rain, I’m a bit worried about what will happen when a Lawrence businessman starts construction on what he’s calling one of the more advanced car washes in the country.
Look for the project near Ninth and Iowa streets. Plans have been filed at City Hall to demolish the Sandbar sub shop and the gas station/convenience store that is immediately north of the sandwich shop. The two lots will be combined to make way for a large tunnel car wash.
Scott Zaremba, an owner of the Sandbar restaurants and the Zarco convenience store chain, is the man behind the car wash idea. He said the car wash will include new technology unlike any other in the region.
“It will be the next generation of car wash,” Zaremba said. “It will have the coolest stuff, that is for sure.”
But Zaremba wouldn’t provide details. Until further notice I’m going to assume it will have a special thingamajig to get the Crispy Creme frosting off my steering wheel, an advanced whatchamacallit to find the taquito that rolled under the seat last month, and a proprietary doohickey that will allow the F150 to double as a hovercraft.
The project, which is being designed by Lawrence-based Paul Werner Architects, also will include about 25 vacuum stations, and will include a place for a food truck to regularly park. (A man who would sell me a juicy, dripping sandwich right after I’ve cleaned my vehicle is a man who understands the business cycle. If he offered a necktie cleaning service, Bill Gates would be jealous of his genius.)
If you are confused about the location of the proposed project, it is near the southeast corner of Ninth and Iowa. Zaremba owns an American Fuels station that is right at the southeast corner of the intersection. That is the one that includes the Scooters drive-thru coffee location. No changes are planned for that fueling site or the Scooters. Just to the south of that location, Zaremba owns another convenience store/fueling station. It will be torn down as part of the project. Just to the south of that location, Zaremba owns a building that previously was a gas station but since has been converted into a brightly colored Sandbar Sub Shop. It also will be torn down as part of the project.
Zaremba has filed for site plan approval at Lawrence City Hall, but he said it was too early to predict when construction work may begin on the project.
• A car wash isn’t the only project Zaremba has going on. Bill Gates indeed may end up interested in Zaremba at some point because Zaremba has launched a new technology company. Zaremba’s American Fuels stations at Ninth and Iowa and East 23rd Street have new technology at the fueling pumps that Zaremba says is the first of its kind in the country.
The pumps have been retrofitted to include a special touchscreen tablet that allows you to place an order for a sub sandwich that will be made inside the store while you are busy putting gas in your car. The sandwiches, though, are just the beginning, Zaremba said. The touchscreen can be used to sell basically any item in the store. The tablet allows you to pay for the items at the same time you are paying for your fuel, so it adds an extra element of convenience. It also helps the convenience store industry with a problem they have created: Pay-at-the-pump technology has cut down on the number of customers who enter the store.
“There is a huge percentage of customers who don’t come inside the store,” Zaremba said. “This lets us sell almost anything at the pump.”
The bigger potential, though, is that the tablets aren’t items that Zaremba has purchased and added to his pumps. Instead, it is technology that his company has developed. He’s now working to sell the technology to other convenience store chains across the country. He said he has two tests going on in other states.
“They are large chains that potentially could use more than 5,000 screens,” Zaremba said.
Zaremba said he used local programmers and technology developers to create the new tablet application. He said he and partners have been working on the project for about eight years.
In other news and notes from around town:
• We might as well stay in the gasoline world for a moment. Lawrence has a new convenience store brand. The station at 19th and Haskell has become a Valero station, which I think is the first one in Lawrence. The location has added new pumps, and the convenience store portion of the business has been advertising that it is under new management.
I’ll beat someone to the question that frequently comes up when I talk about gas station brands: I don’t have any news on whether Casey’s General Store plans to open a location in Lawrence. More than a year ago, I had reliable sources tell me that Casey’s was close to signing a deal for a location in northwest Lawrence along Sixth Street. But then that deal never materialized. No word on whether the company still has an interest in Lawrence or whether the market is a bit big for the company, which operates in a host of small towns.
Old BP gas station near Ninth and Iowa to become Sandbar sub shop; 2006 gas leak may be creating new concerns
The dry cleaner who launders my ties is probably out shopping for a new sports car today. Soon there will be another drive-thru restaurant where I can get biscuits and gravy, and anyone who has seen me try to safely drive the F-150, eat biscuits and gravy, and keep my tie clean will understand why my dry cleaner is dancing a little jig these days. (My insurance agent, not so much.)
Plans have been filed at Lawrence City Hall to convert the old BP gas station at 914 Iowa St. into a Sandbar sub shop. Scott Zaremba, the owner of the chain of American Fuels stations in Lawrence (they used to be called Zarco 66 stations until Zaremba and Phillips 66 parted ways recently), is behind the project.
Zaremba plans to remove the old gas pumps and tanks from the BP station, which has been vacant for more than a year, and convert the building into Lawrence's fourth Sandbar shop. The Sandbar shops sell a variety of sub sandwiches, hot dogs, salads, and, yes, biscuits and gravy and other breakfast items. Zaremba plans to convert the gas station's car wash bay into a covered drive-thru.
Zaremba said he hopes to have the renovations complete in the next 60 days or so. When the project is done, it will be part of a larger complex that Zaremba will operate at Ninth and Iowa. Zaremba already owns the two sets of fueling stations and the car wash and the Scooters drive-thru coffee shop north of the old BP station.
"Our plan is to have whatever you need at Ninth and Iowa," Zaremba said.
Zaremba plans for the new Sandbar to be open 24 hours a day. Think of it: Biscuits and gravy in the dead of the night. Now my insurance agent is really worried.
In other news and notes from around town:
• Another area to keep an eye on for future development — perhaps even for a gas station or transportation center — is near 31st and Haskell. The intersection will be right next to one of only two interchanges on the western portion of the South Lawrence Trafficway.
Signs of activity are beginning to emerge for a piece of land near the intersection. Plans have been filed to re-plat about 13 acres just north and west of where 31st and Iowa currently intersect. The property is owned by a trust controlled by Stan Zaremba, who is Scott Zaremba's father and the founder of the Zarco chain.
I didn't get a chance to get any details from Scott Zaremba about what plans the family may have for the property, which now holds a big pile of wood chips from a tree service. The plans filed call for five small industrial lots to be combined into one 13.7 acre lot.
The property is zoned General Industrial, which allows gas and fuel sales and even would allow property owners to apply for a special-use permit for a truck stop. Again, this plan came in after I already had talked to Zaremba, so I don't know what, if any, plans exist for the property. But if I hear more details, I'll let you know.
• While we're on the subject of gas stations, I'll be seeking more information about activity around the Presto gas station at 602 W. Ninth St.
If you remember back in 2006, the Presto station had an underground gasoline leak that was suspected of causing an apartment house fire in Old West Lawrence.
At the time, the leaking tanks were thought to have allowed more than 1,000 gallons of fuel to enter the groundwater in the neighborhood. That creates a potentially dangerous situation. Sump pumps can allow the vapors from the gasoline to enter homes and become a combustion risk.
Given all that, it is interesting to note that Presto leaders are seeking city permission to install additional "ground water monitoring wells and collection equipment" in the 800 block of Ohio Street. According to a city memo on the subject, current monitoring devices have "shown some contamination and there exists a need to expand the collection area."
There was nothing in the memo that indicated there is an immediate danger to any properties, but I'll be checking with various officials today to try to get some details about the latest request.
More LJWorld City Coverage
For an hour today, you'll get to be a part of a fight, and you'll get a discount to do it.
The Lawrence-based Zarco convenience store chain is offering $1.99 gasoline from 11:30 a.m. to 12:30 p.m. at its location at 1500 E. 23rd Street. . But here's the catch: The $1.99 price is only for the E-15 brand of gasoline, which is fuel that contains 15 percent ethanol rather than the more standard 10 percent blend of ethanol. (Previously I reported the special was at all of his locations, but station leaders and I miscommunicated. My apologies.)
And E-15 is what the fight is about. Zarco leader Scott Zaremba last year became the first gasoline station owner in America to begin selling the E-15 product. But as we reported in June, Zarco stations had to stop selling the blend after the company found itself in a battle with its marketing/distribution partner, big oil company Phillips 66. Phillips was requiring Zaremba to install new pumps in order to sell E-15.
Well, you have perhaps noticed that the signs have changed at Zarco stations in the past few weeks. Zaremba confirmed he's bought his way out his contract with Phillips 66 — a company he's been with for 28 years — and has converted the stations over to a true independent operation. He's rebranded his eight stations in Lawrence, Ottawa and the Kansas City area as American Fuels stations. With the change, he's brought back the E-15 fuel.
"We are back to where we were 29 years ago, a complete independent," Zaremba said. "We will still guarantee all of our products like we always have."
But Zaremba certainly is bucking a decades long trend of gasoline stations affiliating with a major refinery company. Zaremba said he no longer felt that was possible for his company if it wants to truly promote alternative fuel products.
"We feel like we're not in the gas station business anymore," Zaremba told me. "We're in the transportation energy business. That's a big deal to us, because we really believe we can't just rely on gasoline anymore."
Zaremba, who has been trying to work a deal with city leaders to build a compressed natural gas fueling station that would allow the city to convert some of its fleet to natural gas, said he believes Philips 66 was trying to make the sale of E-15 gasoline unnecessarily difficult.
A Phillips 66 spokesman previously has said that's not the case. The company required the changes in selling standards to ensure that the E-15 product wouldn't mistakenly be used by motorists who have vehicles that aren't rated for E-15 use.
The EPA recommends that only vehicles 2001 or newer use the E-15 blend.
But Zaremba said the end result was the new changes made it next to impossible for his company to sell the product. That's because Phillips' new regulations would force him to install new pumps for the E-15 product under a separate canopy away from the main set of fuel pumps. He's convinced Phillips 66 and other big oil companies simply don't want E-15 to gain marketshare in the U.S. because it would significantly cut into their oil sales.
"Change can be difficult, especially for companies that are making billions of dollars off of us," Zaremba said. "They saw something that was going to threaten their income, and they responded."
Zaremba declined to give details about how much it cost his company to end its contract with Phillips 66, other than to say, "it was very expensive."
Nationally, E-15 hasn't gained traction with consumers. Zaremba said only a fraction of gasoline stations currently offer the product, and he said he expects big oil companies to run a negative publicity campaign against the ethanol product.
You'll have to decide for yourself what statements you want to believe about the product. The EPA has deemed the product safe for vehicles 2001 and newer. But some auto manufacturers say use of E-15 will void warranties on vehicles 2012 and older. AAA, the auto club, also issued a statement late last year urging gasoline retailers to halt the sale of E-15 until greater safeguards against vehicle damage can be put in place.
For his part, Zaremba said the EPA testing of the product's safety for vehicle engines was extensive, and he said none of his customers has reported a problem.
"We had the same deal when we went from leaded gasoline to unleaded gasoline," Zaremba said. "People thought nothing was going to work, and everything ended up working just fine."
The fight continues, and Lawrence once again is on the frontlines.
More LJWorld City Coverage
Being a pioneer in a new industry can be a bit like taking a ride in my old F150: It can get mighty bumpy, and you’re wishing you would have known beforehand that the brakes sometimes don’t work.
Scott Zaremba, owner of the Lawrence-based Zarco 66 gasoline and convenience store chain, has been a pioneer in the industry of E15 ethanol. As we’ve previously reported, Zaremba’s Zarco chain became the first in the country to sell the E15 product, which is gasoline that contains 15 percent ethanol rather than the more standard blend of 10 percent ethanol.
According to an article this week from the news organization Reuters, Zaremba is finding out how rough the ride can be in the E15 industry. The article paints a picture of some of the largest companies on the planet — oil companies like Exxon, Chevron, BP, and Phillips 66 — taking aim at the E15 industry. Zaremba and his Zarco stations, apparently, have become one of the first targets.
Phillips 66 has sent Zaremba a new set of regulations on how he must sell the E15 product in order to stay in compliance with his marketing contract with Phillips 66. The end result has been Zaremba stopped selling the E15 product at his stations last month. It is estimated there are now fewer than 30 stations nationwide that sell the product.
The new protocols would require Zaremba to add special yellow hoses to all his pumps to dispense the E15 product. Previously, Zarco dispensed the product through the same hose that carried traditional unleaded gasoline, which has up to 10 percent ethanol in it.
Zaremba said adding the hoses would cost several hundred thousand dollars. In the Reuters article, Phillips 66 officials said the change is about ensuring motorists know that they are buying a different product than traditional gasoline. The article notes that use of E15 can void the warranty of many vehicles that are older than 2013 models.
But Zaremba told me he’s convinced the new regulations are part of an effort by Big Oil to nip the E15 trend in the bud. Zaremba said the stakes are significant for Big Oil because E15, if widely adopted, could reduce the oil company’s market share in the gasoline industry by 5 percent. In addition, it would create new competitive pressures that, in theory, would help control the upward price pressures in gasoline.
“I’ve had people complain to me for 40 years about the price of fuel,” Zaremba said. “I tell them we need to find something different. That is what we’re trying to do.”
Zaremba, who also is an advocate for biodiesel, compressed natural gas and other fuel alternatives, said he knows ethanol has received some negative publicity because of the impact it may have on the country’s food supply and the amount of water it takes to produce.
But he said the potential is strong for ethanol to be produced from other nonfood-producing crops, if the ethanol market can withstand the negative publicity that he believes is being generated by the Big Oil companies.
Zaremba, who is the president of the state’s petroleum marketers association and also an officer with the national trade group, said the figures he’s seen indicate the big oil companies will spend tens of millions of dollars this year lobbying against the E15 product.
“I understand what is going on,” Zaremba said. “If you were making a billion dollars a quarter, would you want some little guy from Kansas trying to change your dynamic? Of course you wouldn’t. Would you try to create every negative article you could to protect your product? I bet you would.”
As for the future of E15 in Lawrence, Zaremba said he’s not sure at the moment. He said he hasn’t yet filed any legal action against Phillips 66, but said he’s still crafting a strategy that would allow him to resume selling the product at some point.
“When you are the first, it is never easy,” Zaremba said. “That’s where we are right now. But I chose this path because I believe we have to do something different.”