O&A Masthead

Colorado News —
February 2008

Columnist — Joyce Trent

DENVER — Colorado had the lowest average retail gasoline price in the nation last month.

AAA Colorado said the state's average price for a gallon of unleaded was $2.891 a gallon.

Colorado flag

It was attributed to big suppliers like Suncor, which has cornered a third of Colorado's gasoline and diesel market, keeping the wholesale price low, and that was a natural result, an industry official told the Rocky Mountain News, of very high prices here in December.

When supplies here were low, out-of-state suppliers took advantage of the high price and shipped in so much fuel that it caused a glut, said Bryant Gimlin, energy risk manager at Fort Lupton's Gray Oil Co., a wholesale distributor of gasoline and diesel.

"The fuel had to be sold off," he said, and the low price is keeping out-of-state suppliers away, but he predicted the attractive price wouldn't last long. "It will correct itself."

All it takes, other industry officials said, is for any problems at a refinery or a pipeline leak to trigger another shortage and higher prices.

Mergers helped reduce the number of suppliers in the last two decades. For instance, there once were twenty suppliers in metro Denver; now there are less than a dozen. And the state's piplelines are designed to import, not export any excess fuel.

BOULDER — A local man has opened what he hopes will be the first of a chain of convenience stores with Italian-style cafes offering only natural foods.

"I consider it to be a 7-Eleven meets Whole Foods," says Michael Marsilio, founder of Moto Modern Markets at the corner of Folsom street and Canyon Boulevard. He plans to have his second store in place in three to six months, and a total of twenty-five at the end of five years.

His target is the consumer in the LOHAS (Lifestyle of Health and Sustainability) market.

No cigarettes or other tobacco products will be offered in his stores. He's relying on fresh natural or organic foods on the shelves and in the Italian coffee bar.

When he was thinking about the project he eyed the old Sinclair gas station, two-car garage and cashier's office on the corner and thought he could make something of them. After consulting with Sinclair, he reopened the pumps keeping the Sinclair fuel and the green apatosaurus logo, but totally remodeled the rest of the outfit.

He has stocked some of the best-known brands in the natural and organic products industry. The only exception to the theme is Coke, for which he acquired an avid taste while pursuing his bicycling hobby. The coffee bar serves "the best" espresso and other made-to-order beverages.

By eliminating tobacco, he hopes not only to promote better health, but to attract a different kind of customer from the single male smoker that has made up the bulk of the consumer trade at convenience stores in the past. He wants to attract more females, for instance.

He even goes so far as to think about bucking the trend toward combining fuel and convenience sales when he opens future Moto markets.

There is some contradiction, he says, in selling fuel while promoting a healthy lifestyle. "In the future, if we sold fuel, I would like it to be biofuel." But he noted that at least Sinclair uses domestic oil instead of foreign products for its fuel.

He is scouting mountain towns that don't have the access to natural and organic foods larger areas do for his expansion.

Industry officials say upscale is the way convenience stores are going now to compete against the large discount stores and diminishing sales in the wake of tough anti-smoking laws which have increased the price of tobacco. Fresh food and bright, well-laid-out interiors seem to be the way to attract more business.

DIVIDE — In an upscale area, you definitely have to have an upscale convenience store, says Scott Smith whose father co-founded the Stop 'n Save company. This summer he plans to open a Stop 'n Save in the exclusive Meadow Park here, but it won't be just any old combination gas station-convenience outlet.

"We will have upscale coffee and food service that includes sandwiches and salads and we will have a drive-through." Parents on their way to work or who pick their children up from school on a cold winter day in the mountains will be able to go through the drive-up and get a cup of coffee or a few groceries without leaving the car or the kids.

"We're trying to set ourselves apart by offering convenience for families."

The Conoco or SunCor, Phillips 66 gasoline will be in the pumps.

The project will be the first phase of the Park Place Commercial Center, a joint project of Meadow Park Communities and PCI Designers/Builders.

The buildings will have a mountain theme with a timber-stone exterior, wainscotting, timber trusses, and stained concrete floors. The center later will include office, retail and restaurant establishments.

Doug Page, well-known architect, planner and founder of the Meadow Park Land Co., said his family selected Feather Petroleum/Stop 'n Save to headline the center because they know the Smiths well. "We've had an outstanding relationship between our two families and have done business together for twenty-five years," Doug Page said.

Bill Page said he and Scott Smith's father, Andy, designed and reconstructed the Loaf'n Jug store in the Gold Hill Square in nearby Woodland Park.

Stop'n Save was founded in 1977 by Larry Feather, Stan Medsker and Andy Smith; the petroleum company today is operated by the second generation. The store planned for Divide will be the eighteenth in eight Colorado counties.

Initially, the enterprise will employ seven or eight. Scott Smith said if there is a demand the store will stay open twenty-four hours.

TELLURIDE — Meanwhile, the biodiesel fever is gaining even more momentum in the state.

The Shell station just outside the town of Telluride has started pumping biodiesel fuel, the first in the area to do so.

"It was a bold move for our little town here, but this is the wave of the future," said station owner Bob Kauflin. He has been considering the change for six months, but once he made up his mind it took only three days to get the biodiesel in the tank and flowing out the pump.

In this case the oil comes from soybeans. Kauflin will pump B20. He hopes to move up to a B50 blend in the future.

Biodiesel's fame grew from used fryer oil, but Dan Hawk of Western Petroleum in Montrose, CO., the Western Slope's only biodiesel distributor, said Telluride's biodiesel comes straight off the train from the soybean fields in Iowa.

"What we're using right now is soybean biodiesel virgin oil, not like McDonald's cooking oil," Hawk said.

Kauflin is still learning about the product but he has enough confidence in it to run the fuel in his own truck, and he's so convinced of the environmental and political benefits that he's willing to take a cut on his profits to bring renewable fuels to Telluride.

"I lived in Boulder for twenty years," he said. "I'm not a total environmentalist. I don't believe in the total package, but I believe in ninety-nine percent of it, and I want to do what I can."

Hawk said the main thing about the biodiesel is that it "has good lubricity and lower emissions and a higher cetane rating and that makes for easier starts and more horsepower, which are important in the mountains."

Reaction has been very positive, Kauflin noted, with some customers who don't have the right vehicle for the fuel promising to buy unleaded from him to support him in his quest to help the environment.

There are a few skeptics. Some customers worry, he said, that using biodiesel would void their cars' warranty. But he cited a National Biodiesel Board report that said, "The use of biodiesel in existing diesel engines does not void parts and materials workmanship warranties of any major U. S. engine manufacturer."

One of Hawk's customers, Steeprock Builders, uses B100 in the summer. Others run it all year, including the Galloping Goose, and Ridgway's Great Solars Works. Biodiesel sales double in the summer with the heavy traffic into off-road areas.

Because the fuel is tax-free, it costs forty-five cents less per gallon than clear diesel fuel and can be used in a variety of ways, from heating to off-road machinery and on construction sites.

Kauflin plans to make biodiesel more affordable by reducing his profit margin. He currently charges $3.85 per gallon for B20 whereas standard diesel is selling at $3.719.

He admits "It's a bit of a gamble, but I think it will pay off."

BOULDER — The 7-Eleven at 1717 Walnut is a victim of competition for land here. It closed last month after its lease expired and the building housing the store was sold to Morgan Creek Ventures.

Morgan Creek purchased the property, which included another retailer, for $3 million. Exact plans for the acquistion have not been disclosed, but the company has been busy redeveloping the area.

PUEBLO — You can't buy a gallon of gasoline at one gas station in this city. It's $7 worth or nothing at the Gas Stop on South Prairie Avenue.

Motorist Randall Harris, who pulled in to buy a gallon advertised at $2.74 was told he had to spend $7.00. He said he was desperate so he bought enough to make $7, but he won't go back.

"To me that is totally discriminating towards the poor."

He said a clerk told him that is store policy and he can't do anything about it. The store owner was not available for comment, but maybe he is tired of long lines of nickel and dime customers.

An attorney for the Office of Legislative Legal Services said there are no state laws barrng a requirement for a minimum purchase on gasoline.

AURORA — Even the robbers are demanding every dime now — or, well, every quarter.

Two men wearing ski masks walked into the Sinclair gas station at Quincy and Parker Road and demanded the cash. When they got the bills, one of the robbers asked if he could have the quarters too. Police are calling him the "Chump Change Bandit."

DENVER — The law is getting tough on convenience store thieves.

One of three people indicted on charges of stealing $80,000 in merchandise from area convenience stores was sentenced recently to fourteen years in prison.

Kenneth Daniel Cortez, 44, pleaded guilty to violating the Colorado Organized Crime Control Act (COCCA) and was immediately sentenced.

The cases of two co-defendants are still pending, the Jefferson County District Attorney's Office said.

Police said the trio went into convenience stores in Lakewood, Westminster and other metro areas where one would distract the clerk while the others stole items such as cell phones and cigarettes.

COLORADO SPRINGS — Some 7-Eleven stores took pity on New Year's Eve revelers and offered free 12-ounce hot beverages to them.

Participating stores made the offer to those who came by between 11 p.m. Dec. 31 and 7 a.m. Jan. 1. It also was an effort to protect the public by keeping drivers awake. It was the twentieth year the convenience store chain conducted the program.

LONGMONT — Who would have thought that a few scribblings on his uncle's old vacant gasoline station would lead to fame and fortune?

Last summer budding artist Gamma Acosta hoped to honor music legends Tupac Shakur, John Lennon, Marvin Gaye and Kurt Cobain by painting their portraits on the station at Third and Lashley.

The work was so good many people stopped by to see it. It earned him commissions for more portraits, murals, and in one case, the setting for a Denver nightclub's New Year's Eve celebration.

And Acosta, who didn't have much hope to go beyond "living from paycheck to paycheck," now sees "a whole new future. It's cool. People actually appreciate what I do."

Soon he plans to replace the gasoline station art with portraits of the candidates for president, starting with the lesser known. Who knows where that will lead!

Originally published in the February 2008 issue of the O&A Marketing News.
Copyright 2008 by KAL Publications Inc.

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