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Wal-Mart Considers Selling Ethanol

August 10, 2006

With automakers planning to double the number of vehicles that can run on ethanol on the roads by 2010, and currently only about 800 service stations in the U.S. out of 168,000 pumping E85, Wal-Mart is considering selling ethanol at the eight stations that it operates at Wal-Mart Stores and at about 380 more with its Sam's Clubs division, according to Fortune.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, Fortune reports, and there's no reason why Wal-Mart couldn't sell E85 at the rest of its 3,000 U.S. stores.Selling ethanol could be a new profit center for Wal-Mart and also comes as part of its sweeping efforts to adopt business practices that are better for the environment. The company brought representatives from major auto manufacturers, ethanol-makers, consulting firms and environmental groups to the kickoff meeting of its alternative fuels network in Washington last May to discuss how Wal-Mart could help promote alternative fuels.Ethanol advocates say Wal-Mart could be a catalyst to making the fuel a mainstream alternative to gasoline for millions of Americans. But before committing to ethanol, Wal-Mart needs to feel confident that it will have access to ample supplies of ethanol, at a price competitive with gasoline. Transporting ethanol from farm country to population centers and educating consumers about the fuel are additional challenges. There's also debate over the future of a 51-cent a gallon government subsidy for ethanol.However, expanding infrastructure and publicity campaigns all leave experts feeling like ethanol's moment may finally be here. Particularly if Wal-Mart gets on board, experts say the high price of oil could make ethanol an attractive and popular alternative.
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