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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.

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    Zarco stations begin selling E-15 product again after ending 28-year relationship with Phillips 66

    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.

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    Lawrence gas station owner gets caught up in national battle with Big Oil over future of ethanol

    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.”

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