Matt Horton 

CEO, Propel Fuels

In 2006, venture capital investor Matt Horton had already made a number of energy investments, including ethanol companies, based on his belief that the field was ripe for change and would see enormous growth in the next 25 years. And that year, he met the founders of Seattle-based Propel Fuels,who had a very compelling business plan and were selling the first retail consumer energy product that excited him - biodiesel. Matt's firm @Ventures invested in Propel's Series A round of financing, and that same year he bought the Jetta TDI he still drives today.

Propel's team had been looking at California because of its larger fuel and vehicle market, but the real interest came when they learned about funding opportunities though the Sacramento Metropolitan Air Quality Management District and the California Energy Commission's (CEC) AB 118 Alternative and Renewable Fuel and Vehicle Technology Program. In 2008, Propel moved its headquarters to California and began expansion into the state, and the following year Matt began his role as CEO. According to Matt, Propel felt the impact of the economic downturn during this transition - especially in the capital markets - and it was a long, tough process, but the company has succeeded, and Propel is now experiencing record sales.

Just in the last few years, Propel's achievements in growth and innovation include being recognized on the Inc. 500 list of the fastest growing private companies for its 1000 percent growth over a three-year period and placing 42 out of 100 on Forbes' list of America's Most Promising Companies as the highest ranked renewable energy company, earning particular praise for its "groundbreaking approach in a traditional industry."

Propel fulfills its mission of "Fueling Change" by building, owning, and operating a network that provides low carbon fueling here and in Washington State. Today, Propel has 40 stations offering E85 and B20 (B99 is also sold in Seattle) and has targeted a total of 200 stations reaching 75-80% of California's population. Much of Propel's business involves educating consumers on the value of its fuels. Matt says that, while they got a lot of publicity for their 2012 pilot sale of biodiesel made from algae, their most successful efforts are those aimed at increasing adoption among new customers, who then remain very loyal to the fuel. While E85 is their fastest growing segment (the adoption cycle is faster due to vehicle "Flex Fuel" labeling and OEM endorsements), biodiesel's sales growth has been steady, and this August, Propel sold more biodiesel than ever. This is a result of Propel's work building awareness, providing education, and correcting misconceptions about biodiesel, according to Matt.

When Propel launches a new fueling site, it's "high touch, hands on." The company uses direct mail and local PR to get the word out; offers $10 in free fuel to any first-time customer; brings in a team for 3 to 4 days to answer questions; and posts on each pump a 1-800 number that provides 24/7 customer support. Propel operates two models: their Clean Fuel Points, where they add biodiesel and E85 pumps to existing traditional stations; and their Clean Mobility Centers, where they start from scratch and offer additional green features like public transit education, bicycle tuning, and recycling. The latter, which have full Propel branding, provide additional income streams and are the strongest performing stations.  

Propel will soon announce that its customers have reached the milestone of 100 million pounds of CO2 avoided. Using the company's CleanDrive™carbon emission reduction tracking tool, Propel's customers are the first in the nation to have access to accurate, real-time individualized online reporting of each alternative fuel purchase relative to petroleum. And because the tool is compatible with major fleet fuel cards, businesses can determine when and how often their vehicles are using alternative fuel, which has been of notable value for fleet managers complying with alternative fuel-related mandates. Even customers buying conventional fuels at Propel stations are able to offset the carbon from those purchases, a program that has seen steady support.

"What we do best is reach out, educate people, provide opportunities for them to experience the fuel, and get them excited," Matt says. "One of the great things about being the retailer is that we can provide visibility for the industry's work with new and more advanced fuels, and we want to be the channel for bringing the best of those products to more and more communities." He is hopeful that E15 and E30 will one day be permitted at retail in the state of California and points out that some of the lowest carbon ethanol in the country is produced instate. Regarding renewable diesel, Matt says that it has some drawbacks, such as a lack of lubricity, but that there is a lot to like, including its compatibility with engines and existing infrastructure, and he believes it has a bright future. Propel is moving slowly on that front, taking care with sources so that their customers are comfortable with its sustainability aspects and, of course, hoping for the right cost characteristics.

As a panelist at the August Clean, Low Carbon Fuels Summit in Sacramento and in the recent Environmental Defense Fund/Environmental Entrepreneurs case study on biodiesel in California (in which Propel is featured), Matt has been outspoken about the fact that LCFS is working by incentivizing lower carbon fuels to come into the state. When asked about the company's previous plans to expand into other states, Matt says that they continue to review opportunities but that Propel remains focused on instate infrastructure thanks to LCFS and AB 118 grant incentives and other economics that have strengthened the company's business in the state.

In addition to securing private funding, Propel has received grants from the U.S. DOE and the CEC's AB 118 program to build E85 stations. Matt says that the CEC has been a great partner and credits the agency for knowing how to get real, immediate results toward the state's energy goals. In working to create a favorable policy environment, Matt stresses the importance of patience; spending time in Sacramento; building relationships with state agencies before you need them; meeting the legislative representatives from your district; and aligning with strong coalitions that are telling the same story.

CBA has been pleased that Propel, a member company, has devoted time and energy toward resolving underground storage tank and other policy issues. We look forward to continuing cooperation with Propel on LCFS defense and other shared goals going forward.