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Dear PEI Member:

The Government Accountability Office (GAO) released a report, DOE Lacks a Strategic Approach to Coordinate Increasing Production with Infrastructure Development and Vehicle Needs, June 11 stating that the Department of Energy needs to develop a more comprehensive approach coordinating the expansion of biofuels production with needed infrastructure and vehicle production.

Although ethanol and biodiesel production has been increasing rapidly, the GAO report concluded that such fuels are unlikely to displace a considerable amount of petroleum until less expensive production methods are developed. The study said the main factor is the rising cost of the primary feedstocks— corn and soybeans— which are also used for livestock feed and human food. In addition to the higher cost of production, the higher wholesale price for ethanol is attributable, to a certain extent, to the high demand for ethanol caused by the MTBE phaseout, the report said.

The subject of biofuels infrastructure was front and center at a biofuels conference I spoke at last week at the U.S. Department of Commerce. The private conversations with many of the attendees echoed the bottom-line conclusion of the GAO report: E85 use will not grow until E85 is less expensive than gasoline and more widely available. That is not expected to happen anytime soon. Until it does, ethanol’s impact will be as a 10 percent blend in gasoline, and not an E85 fuel.

REGULATORY BRIEFS
California. The California Air Resources Board adopted a resolution last week requiring refineries making gasoline sold in the state to blend their gasoline with 10 percent ethanol beginning December 31, 2009.
Indiana. The Indiana Department of Environmental Management (IDEM) has initiated a rulemaking that will consider amendments concerning requirements for Stage I vapor recovery systems at gasoline dispensing facilities. Stage I is currently required at all facilities built after July 1, 1989, that have a monthly throughput of 10,000 gallons per month or greater. The amendment would require Stage I vapor recovery at all gasoline dispensing facilities which have a monthly throughput of 10,000 gallons per month or greater. A First Notice of Comment Period will appear on-line in the Indiana Register at www.in.gov/legislative/register/irtoc.htm on June 27, 2007.
Maryland. H.B. 745 was signed by Governor Martin O’Malley last month. It requires that at least half of state-owned, diesel-fueled heavy equipment and half of oil-fired heating equipment in state buildings use a blend that is at least 5 percent biodiesel, beginning in 2009, subject to availability and with exemptions for equipment whose warranty would be voided if damaged by such use.
 

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DEADLINES
Distributor Profitability Survey is available only to distributors in North America. Deadline for submission of industry data (brief questionnaire, income statement and balance sheet) for the survey is June 30. The Distributor Profitability Report generated from the responses to the survey is the best benchmarking source in our industry and is free to participants. To participate download the survey or visit Questionnaires at www.profitplanninggroup.com.
RP600 Comments. A draft of PEI’s Recommended Practices for Overfill Prevention for Shop-Fabricated Aboveground Tanks (PEI/RP600-07) is available for comment and can be viewed at www.pei.org/RP600. Written comments are due by July 6.
PEI District Elections. Ballots used to elect members to the PEI Board of Directors were mailed June 21 to the official representatives of PEI member companies in the odd-numbered districts and affiliate division. Ballots must be returned to Jim O’Day, PEI Election Chairman, by July 12 to be counted.

PETROLEUM MARKETING NOTES
GPM Investments LLC, Mechanicsville, Virginia, has acquired a 58-store chain with locations in Virginia and Tennessee. GPM currently operates 145 stores under the Fas Mart or Shore Stop flag.
EZ Energy USA Inc., has purchased Harper Oil Co., Springfield, Illinois. Harper Oil has 26 convenience stores doing business as Harper On the Way. The deal is expected to close this summer.
“Shell’s 550 or so wholesalers build about 200 new stations a year; the company would like to see that number double within the next three to five years, says wholesale VP Hugh Cooley.”—Oil Express, June 22, 2007.

BRIEFLY NOTED
The Michigan Department of Environmental Quality said it is seeking $869,150 in penalties from BP Products North America Inc. for failure to submit required reports on leaking underground storage tanks at eight service stations across the state. The stations are all current or former corporate-owned BP or Amoco locations.
Brazil’s state-run oil firm Petrobras and the Nigerian National Petroleum Corporation (NNPC) signed a deal under which Petrobras will supply ethanol to Nigeria and train NNPC employees to implement a government program to blend 10 percent ethanol into regular gasoline.

OSHA PROPOSES TO UPDATE PPE STANDARDS
The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) is proposing to revise the personal protective equipment (PPE) sections of its general industry standards regarding the use of eye and face protective devices, head protection, and foot protection. 
OSHA is proposing to replace the existing references to specific consensus standards with performance language requiring PPE to be constructed in accordance with good design standards. The proposed revision includes guidance for determining what is a good design standard. In addition, OSHA is proposing to add non-mandatory appendices that list standards constituting good design standards as used in the requirement.
These proposed revisions are a continuation of OSHA’s effort to update or remove references to specific consensus and industry standards located throughout the Agency’s standards.

APPOINTMENTS
UPP Systems of PetroTechnik Inc., with a U.S. sales office in Cresskill, New Jersey, has hired Mark K. Mays as vice president, sales and marketing for North America. Mays can be reached at 2715 Turpinknoll Court, Cincinnati, Ohio 45244. Phone: (513) 231-7840. E-mail: mmays@upp-usa.com. 
Carolina Products, Inc., Charlotte, North Carolina, has appointed Lucas Ford Associates, Tampa, Florida, to represent the company in the Southeastern United States and Peiker/Piatchek, St. Louis, Missouri, to represent Carolina Products in Missouri, Kansas, Nebraska, Iowa and Illinois.

MEMBERSHIP APPLICATIONS
Steel tank manufacturer. Granby Steel Tanks, 1020 Rue Andre Line, Granby, Quebec J2J 1J9, has applied for manufacturer division membership. Maire-Claude Chopin is an executive assistant for the firm, which was established in 1954. Granby Steel Tanks manufactures steel tanks which are sold through distributors. Sponsored by Wayne Geyer, STI, Lake Zurich, IL.
Cleaning products manufacturer. Environmental Network Inc., 303 South Main Street, Suite B, Goodlettsville, Tennessee 37072, has applied for manufacturer division membership. Steve Meske is director of sales and marketing for the firm, which was established in 1996. The company manufactures environmentally-safe, commercial-grade cleaning products based on bioremediation technology, which are sold through distributors. Sponsored by David Fiala, SalesForce, Maitland, FL. Ambassador: David Fiala.
Site power problem analysis and design firm. R. M. Stoof & Associates, Inc., P. O. Box 101624, Pittsburgh, Pennsylvania 15237, has applied for affiliate division membership. James Stoof is vice president and sales manager for the firm, which was established in 1993. The company provides site power protection, premise wiring, systems integration, security systems installation, site power problem analysis and design consulting. Sponsored by Richard J. McLaughlin, ReitzPA, Brookville, PA.
Texas installation and repair firm. Markgraf Construction, Inc., P. O. Box 2713, Universal City, Texas 78148, has applied for affiliate division membership. Tracy Markgraf is vice president of the firm, which was established in 2001. The company installs, repairs and removes underground and aboveground fuel tanks. Sponsored by Fred Monroe, Monroe, Arlington, TX. Ambassadors: Chris Monroe and Rhonda Hoopingarner, Monroe & Monroe, Arlington, TX.

©2007
Petroleum Equipment Institute
P. O. Box 2380
Tulsa, OK 74101-2380

The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Robert N. Renkes, Executive Vice President, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.