President and CEO, FUELIowa
FUELIowa began in 1937 amid a battle between independent operators and the oil industry, starting with the name “Iowa Independent Oil Jobbers Association.” The organization has evolved over the decades and now represents a diverse membership of fuel distributors, cooperatives, convenience and grocery stores, refiners, biofuel producers, and other firms. President and CEO Dawn Carlson joined FUELIowa in 1995. Among her roles in leading the association are to keep an eye on the emerging trends in energy and fuel sectors, and to advocate for the industry with state leaders and other stakeholders. Technology and scientific research drive the industry. For instance, in recent years, the association developed its own software to help track renewable fuel credits that is now in use outside Iowa. Carlson is an Iowa native and an Iowa State University graduate with a degree in agribusiness management. Here she shares some of her observations and thoughts.
How do you define innovation?
With something as common and necessary as fuel, one might assume it’s always the same, day in and day out. On the contrary, the fuels industry is exciting and ever-evolving with innovation. We view innovation as essential in protecting and meeting the needs of our customers, maintaining independence from foreign oil, transforming products and services to comply with regulations, and protecting the environment for generations to come. Innovation is illustrated in the progressive array of fuels offered to our customers, homegrown biofuels manufactured right here in Iowa. It is illustrated in the equipment we use to monitor customer fuel tank inventories, the EMV chip credit card protections in fuel dispensers, the emergence of omnichannel shopping experiences, frictionless checkout, customer-specific loyalty programs, autonomous vehicles, alternative vehicles and alternative fuel options.
Innovation is the fuel that fires progress in creating new methods, products or services. For FUELIowa members, that could be progress in safety, health and wellness, savings, efficiency, quality fuels, stewardship and conservation, to name a few.
We also view innovation as the process of re-evaluating and determining a new, improved path for a desired outcome, and that is where advocacy comes into play.
What was your first significant innovation, invention or process that you were a part of?
As an association representing the fuels industry since 1937, we are focused on opportunities to encourage innovation and fairness in the marketplace. In the late 1990s, FUELIowa was fortunate to lead a conversation transforming consumer opinions on a fuel made from corn.
Rather than accept a legislated mandate dictating one consumer fuel, we proposed incentives that would encourage consumers to try the new fuel while allowing consumers a choice. This innovative approach has proved successful. Today, more than 87 percent of the gasoline purchased in Iowa contains ethanol, made with Iowa corn. Likewise, more than 51 percent of the diesel purchased in Iowa contains biodiesel, made with Iowa soybeans or animal fats.
By advocating incentive approaches vs. mandated approaches, biofuels market growth has occurred with consumers making their own choices.
When the federal Renewable Fuels Standard regulations were published in 2007, FUELIowa recognized the burden of tracking renewable fuel credits known as RINs [renewable identification numbers] and feared fuel marketers in Iowa might stop blending. A solution was developed and later incorporated as RINAlliance to not only assist fuel marketers in Iowa, but nationwide, through a software application developed internally. The software is used to manage tracking, reporting, auditing and aggregating the RIN credits to sell back to refiners and obligated parties that require them to comply with the RFS requirements. RINAlliance was honored to receive the prestigious Prometheus Clean Energy Innovation Award in 2013, sponsored by the Technology Association of Iowa.
The development of RINAlliance is probably the most significant entrepreneurial venture this association has ever been a part of. FUELIowa owns all of the shares of stock of RINAlliance, and as such, the members of FUELIowa are the beneficiaries of this successful startup company.
What is a key trend or what are key trends in the energy and fuel industry?
From a global perspective, increasing energy independence is a theme, while OPEC output, demand, prices, transitions to more renewable and cleaner sources of energy are also trending. U.S. energy policies, tariffs and sanctions have a major impact on domestic activities. Transparency in fuel quality, adoption and enforcement of fair market policies are also important as the oil industry and ethanol industry do battle over the Renewable Fuels Standard.
From a retail perspective, key trends impacting the fuel industry include the transition from brick-and-mortar to online buying, which reduces consumption of fuel, as does more ride sharing, frictionless payment, card payment security, healthy food options for a largely millennial customer base and finding top talent.
FUELIowa has a long history in Iowa. What are some of the ways an organization can help cultivate a culture of innovation over the years?
As is true for any organization, to be competitive and remain viable, it is important to seek information, compare data and stay abreast of the industry issues on the horizon. We are problem solvers. When we strive to create solutions to problems, we create opportunities for success, and if we reward success, we cultivate a culture of innovation. Specifically, organizations can stimulate creative problem solving through idea generation sessions or mind mapping, rewarding best ideas, experiential learning that stimulates new ideas, and even a change of routines in the office. Valuing the ideas and input of the team helps to build confidence and interest in innovative idea generation. Rewarding the successful outcomes ensures the culture continues.
What is the state of Iowa’s biggest challenge when it comes to innovation in the fuel industry?
Infrastructure, without hesitation, is the biggest challenge to innovation in the fuel industry. In support of Iowa’s ethanol industry, fuel marketers must replace 85 percent of the fuel dispensers, lines, tanks and materials in the state to equipment certified by Underwriters Laboratories as compatible with innovative fuels such as E15 and higher blends of ethanol mixed with gasoline. An average fueling station or convenience store has three fuel dispensers. To upgrade these facilities could cost as much as $500,000. Private and public grants have been awarded to several companies helping to offset this expense, but only 15 percent of the sites are legally and safely suited to offer E15.
In order to protect the environment from potential equipment failures with new fuels, more infrastructure funding is needed. Likewise, to protect consumers from the ever-challenging bank card and chip card fraud crimes, payment and security equipment must be innovatively one step ahead of organized crime. The industry is transitioning to new card processing equipment in fuel dispensers as well. Innovation is an investment.
“Valuing the ideas and input of the team helps to build confidence and interest in innovative idea generation. Rewarding the successful outcomes ensures the culture continues.”
What are two or three of the most exciting areas that you are working on or are being worked on through FUELIowa?
We are directly working on transparency and preservation of fuel quality, infrastructure upgrades for fuel storage tanks and dispensers, and state policy that enables Iowans to be served statewide with fuel and convenience.
What is needed to make it easier for innovations in the fuel and energy sectors to get to market?
Through our subsidiary, RINAlliance, we have the opportunity to work with fuel manufacturers and marketers nationwide. Some are not as fortunate as Iowans in terms of the transportation infrastructure to rail biofuels in to fuel terminals. Since ethanol cannot be shipped through underground pipelines and a limited amount of biodiesel can be shipped via pipeline, we see the opportunities to expand biofuel sales hindered in some states without a strong rail system. We are fortunate in Iowa to have a strong pipeline and rail offering as well as production facilities to enable us to bring homegrown biofuels to market.
Our biggest opportunity for advancing biodiesel sales is the off-road market, specifically farm and construction purchases. We are excited to work with the biodiesel industry to reach this market.
What areas of education or expertise are needed in your field?
As an association leader and advocate for business owners, I believe servant leadership is a key trait for success. Being a good listener and problem solver along with having the passion to creatively solve problems goes a long way. A Certified Association Executive credential is advised for individuals committed to leading associations. In the fuels industry specifically, there is tremendous opportunity for individuals with an interest in STEM [science, technology, engineering and mathematics]. There is also a shortage of CDL [commercial driver’s license] drivers, creating great opportunities for job hunters. There are various post-grad and college educational programs that serve the fuel industry well and provide additional technical training. Hospitality education and experience are a plus in the talent search for convenience store owners.
What is your top goal in innovation or developments this year?
“There are three constants in life … change, choice and principles.” – Stephen Covey.
FUELIowa’s top goals in innovation or development this year continue to be allowing consumers to have a choice in selecting their fuel and allowing all fuel marketers equal opportunity to assistance in upgrading their fuel storage and dispensing equipment to offer innovative fuels competitively.
Fuel marketers across Iowa, particularly in less populated rural areas where access to fuel and convenience items can be critically important, are faced with changing regulations, federal and state policy that can put an owner out of business. Our goal is to help Iowans to have convenient access to fuel and convenience items through fair competition.