Mike Lewis

Co-Owner, Pearson Fuels

In the late 1990s, Mike Lewis was part of the management team at Pearson Ford, a San Diego car dealership, when the owner, John McCallan, came up with the cutting edge idea of a Regional Transportation Center (RTC), which would serve the vast market for alternative cars and fuels soon to explode with the implementation of California's groundbreaking Zero Emissions Vehicle (ZEV) mandate. The mandate required that zero-emission vehicles make up at least 10 percent of new car sales by 2003, and allowed partial credits for other extremely clean vehicles.

The RTC, located just a few blocks from a new freeway, would include a car lot, showroom, repair center, retrofit operation, fueling station, and a 7,500 square foot Eco Center with a theater and exhibit hall, truly a one-stop-shop on the way to California's alternative car future. With a $15 million investment, and what seemed like perfect timing, this unprecedented goal was achieved in 2003. The RTC, with the nation's first alternative fuel station, opened with 10 different vehicle fuels (including 3 grades of gasoline) for sale. An impressive 18 different alternative fuels vehicles, including models running on E85, natural gas, propane, and electricity, gleamed on the showroom floor.

What happened next, one of the worst chapters in California's environmental and energy independence history, was documented with jaw dropping and literally crushing detail in the film Who Killed the Electric Car. A lawsuit over the ZEV mandate brought by General Motors (GM), DaimlerChrysler, and several California car dealers against the California Air Resources Board (ARB), and joined by the federal government under President George Bush, succeeded in getting the mandates delayed for well over a decade. The film documents GM refusing to allow EV1 drivers to keep their leases, tracking the cars down, hauling them off, and crushing them. Nearly 5,000 electric cars suffered this fate at the hands of other car companies as well. Within one year, every one of the 18 models on the RTC showroom floor was cancelled by the manufacturer, and the RTC was dealt a fatal blow. *

Still, the nation's first alternative fuel station became the stuff of legend. According to their website, Pearson Fuels brought the "first Ethanol station to the state of California, the first Biodiesel station to San Diego and the county's first dual pressure Natural Gas Station. Pearson featured San Diego's largest Electric Vehicle charging facility, the county's first Propane Vehicle Fueling Station and was the first independent station in San Diego to offer Ultra Low Sulphur Diesel."

But the RTC was never envisioned to be just a retail fueling operation, and Mike reports that Pearson Fuels did not do well. A few years ago, based on the volume of calls from fuel station owners wanting information about alternative fuels, Pearson Fuels developed a new business model, which began with the idea of building alternative fuel pumps at other fueling stations around the state.

Pearson Fuels has been extremely successful in securing funding from a number of sources, including ARB and the California Energy Commission (CEC). Mike says, "We look at what state leaders want and what industry wants, and try to put those together." He added, "We have performed on all of our grants and even gotten money when other grantees didn't perform." Somewhat of an incubator for California alternative fuel projects, Pearson Fuels was funded through ARB and the CEC to partner with existing or soon-to-come-online businesses with fueling infrastructure. Once the projects are completed, the companies own the new fueling infrastructure, and Pearson makes money on the fuel sales through long-term contracts. The company has completed 12 E85 projects with partners around the state, is building 4 hydrogen dispensers at 4 different stations, and has funding for 2 biodiesel blending terminals.

Pearson Fuels expects to break ground in a month or two on the first inline biodiesel blending terminal at McClellan Air Force Base near Sacramento with partner Interstate Oil and to be up and running by year's end. This first-in-the-state operation will allow truckers to fuel up in one stop by punching in their desired blend and feedstock ratio. Though a second location has been secured, Mike continues to look for the partner and location that will best serve the needs of the biodiesel industry.

Today E85 is Pearson Fuels' bread and butter. The company now distributes E85 to 40 out of the state's 65 E85 fueling locations. Half of those are government installations and half are retail stations. Mike points out that the original retail Fuel Depot in San Diego is a Car to Go hub; expects to have a fast charging electric technology soon (and to see an improvement in that market); and still sells 9 of the 10 original fuel types every day (all but propane). E85 is hands-down the biggest seller to SUV drivers looking to save money.    

Sadly, the company's biodiesel sales have done nothing but decline since Water Board policy forced the station's downgrade to B20 in recent years, even with months of advertised prices at 20 cents less than diesel. Mike is definitely bullish on B5, and says he may consider a return to higher blends now that new UST regulations are in place. Such a move could bring back local biodiesel users, who Mike describes as committed environmentalists and his most passionate customers.

Pearson Fuels is CBA's newest small business member, but Mike Lewis is clearly not new to biodiesel or to his work on behalf of the industry in California. CBA wishes to thank Mike for his biodiesel advocacy and for his help in addressing the UST problem, including public testimony and efforts to secure funding for CBA's work on that issue.

* Ford did keep making the E85-compatible car in other states.