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Dear PEI Member:

Consumer groups advocating Automatic Temperature Compensation (ATC) for retail fuel pumps were dealt a blow last week during the interim meeting for the 93rd Annual National Conference on Weights & Measures (NCWM) in Albuquerque, New Mexico. This event is a preparatory step before the annual meeting where weights and measures officials from across the U.S. vote on the agenda items. The 2008 conference will be held in Burlington, Vermont, July 13-17, 2008, but it appears ATC will be discussed only as an "informational item."

After not reaching a consensus in 2007, the NCWM formed an ATC Steering Committee to resolve the question once and for all. This committee held an open meeting in August 2007 and received input from the four regional weights and measures associations and interested parties. After the committee presented its implementation proposal, the floor was open for comments.

Consumer groups were on hand to plead for equity in the market. Marketers turned out in force to express their disapproval for the concept and said that pricing is already equitable. Regulators from California pleaded for guidelines from NCWM because retailers there are already preparing to install ATC equipment. There are no federal regulations expressly forbidding the use of temperature compensation devices.

John Eichberger, representing the National Association of Convenience Stores, suggested that “temperature compensation is a poor proxy for measuring BTUs.” Ross Anderson of New York, a member of the ATC Steering Committee, challenged the assumption that consumers are getting bilked at the pump for $500 million annually, as the Kansas City Star has alleged. Holding up a typical Bill of Lading receipt used for motor fuel deliveries, he pointed out the document shows both gross and net gallons—gross being compensated for temperature. “The Kansas City Star assumed (retailers) received their inventory based on net and sold on gross. But general accounting rules don’t let you do that,” Anderson explained. “This... $500 million all of a sudden disappears... it never existed in the first place.”
 

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Several observers noted that a cost/benefit analysis is currently being conducted in California and one is planned by the Government Accountability Office (GAO) this summer. The most common suggestion was to table the item and not vote on it at all until these studies have concluded. In the end the committee did just that, and chose not to vote on the issue this year.

NEW HEALTH INSURANCE PROGRAM
PEI is pleased to announce that it is now able to offer a nationwide health insurance plan to most members headquartered in the United States through its affiliation with the National Association of Wholesaler-Distributors (NAW). This health insurance program takes advantage of NAW’s collective member company buying power, rewards healthy companies with lower premiums, and offers the added benefit of a pooled reserve fund.

The NAW insurance program offers a fully-insured group health plan administered and underwritten by Trustmark Insurance Company or Trustmark Life Insurance Company (Trustmark). It is distributed and marketed by Flexible Benefit Service Corporation (Flex). 

This health insurance program is currently available in 33 states and the District of Columbia. By the end of the second quarter of 2008, the program will be available in 40 states, including DC. The program will not be available to members in AK, KS, MA, ME, NV, OR, and WA until further notice, since these states require significant regulatory approval from their Department of Insurance. At this time the program is not expected to be available in HI, MD, or VT. For a complete list of state program availability visit the Flex website.

Through the NAW insurance program, PEI members have access to a comprehensive suite of Preferred Provider Organization (PPO) plans with flexible options, including:

• Varying deductible and coinsurance levels.
• Consumer-driven, cost-savings options featuring tax-advantaged plans, such as Health Savings Accounts (HSAs), Health Reimbursement Accounts (HRAs) and more.
• A full portfolio of ancillary products to combine with a medical plan, including dental and life/AD&D insurance.

Plus, if you have at least 200 employees electing health coverage, you also have the additional opportunity to customize your plan by choosing an alternate funding arrangement and additional plan designs. Contact Flex to learn how a customized benefits package can be created to meet your unique large group needs.

The NAW insurance program provides PEI members the following advantages:

• NAW's collective member company buying power means lower overall costs.
• Healthy companies are rewarded with lower premiums.
• Unused claims dollars are returned to the NAW Insurance Trust's reserve fund—not the insurance company. This reserve can be used, within legal requirements, to reduce future insurance premium increases or otherwise be distributed to participating members in a manner deemed appropriate by the Trustees.
• Member companies may use their existing agent or select an NAW preferred agent.
• Access to one of the largest physician and hospital networks in the country.
• Online tools for plan administrators to easily manage information for participating employees.

To learn more about the NAW insurance program, visit www.naw.flexiblebenefit.com. You or your health insurance agent can also call Flex directly at 866-472-5397.

BRIEFLY NOTED
RDM Industrial Electronics, Inc., Nebo, North Carolina, has named Joel Richards of Joel Richards & Associates, Crossville, Tennessee, as its 2007 Sales Representative of the Year.
Franklin Fueling Systems, Madison, Wisconsin, has recognized Red Leonard Associates, Cincinnati, Ohio, as its Rep of the Year for 2007.
OMNTEC Manufacturing, Inc., Ronkonkoma, New York, has recently expanded its sales and technical support team by hiring Dan Godfrey as its east coast regional sales manager.
Kwik King Food Stores, Ocala, Florida, has sold 22 convenience stores to Shreeji Bapa Krupa, also based in Ocala. Earlier this month, 19 other Kwik King stores were sold to two other buyers.
Rutter's, York, Pennsylvania, said it will invest more than $55 million to build 10 convenience stores and 11 car washes during 2008 in central Pennsylvania.

USE OF ETHANOL IN GASOLINE EXCEEDED FEDERAL MANDATE IN 2007
Gasoline production in the United States was up 1.3 percent in 2007, to almost 9 million barrels/day (b/d), the highest annual output ever, according to a statistical review of 2007 compiled by the American Petroleum Institute. The amount of ethanol blended into gasoline grew to more than 400,000 b/d and accounted for roughly 5 percent of all domestic gasoline sales. Refiners used 6.7 billion gallons of ethanol in 2007, about 2 billion gallons more than federally mandated. The new energy bill signed into law in December stipulates that production of renewable motor fuels, such as ethanol, must rise to 36 billion gallons by 2022.

RENEWABLE FUEL DISPENSER REQUIREMENTS OF NEW ENERGY ACT
Some PEI members have been unclear on what the energy bill passed by Congress in December requires in terms of new fuel dispensers.

Title II, Subtitle C, Section 242 provides that the Secretary of Energy, together with the Secretary of Transportation, shall determine and report to Congress annually on the market penetration for flexible fuel vehicles in use within geographic regions to be established by the Secretary of Energy.

Within 24 months of enactment, the Secretary of Energy, in consultation with the Department of Transportation, must report to Congress on the feasibility of requiring motor fuel retailers to install E85 compatible dispensers and related systems at retail fuel facilities in regions where flex-fuel vehicle market penetration has reached 15 percent of motor vehicles. The law says that the following factors should be considered:

• The commercial availability of E85 fuel and the number of competing E85 wholesale suppliers in a given region.
• The level of financial assistance provided on an annual basis by the federal government, state governments and nonprofit entities for the installation of E85 compatible infrastructure.
• The number of retailers whose retail locations are unable to support more than two underground storage tank dispensers.
• The expense incurred by retailers in the installation and sale of E85 compatible dispensers and related systems and any potential effects on the price of motor fuel.

PEI PRIORITY CLUB WELCOMES RIVERSIDE STEEL AND NPN
Two PEI members have joined The PEI Priority Club since the beginning of the year: Riverside Steel Inc. and NPN. These two companies join 12 other members in committing additional financial support to the association. In addition to Riverside Steel and NPN, other members of the 2008 Priority Club are Central Illinois Mfg. Co., Dresser Wayne, Franklin Fueling Systems, Gilbarco Veeder-Root, Husky Corporation, Petroleum Parts Inc., PMP Corporation, RDM Industrial Electronics, STICO Mutual Insurance Company, Universal Valve Co., Veeder-Root Company and Xerxes Corporation.

READERS SHARE ULTRA-LOW SULFUR DIESEL ISSUES
In the last (1/22/08) TulsaLetter, we asked readers to share experiences they are having with ultra-low sulfur diesel, especially as it relates to filters and meters being clogged with unknown substances/residues. Here is a representative sample of what members told us.

We have heard of problems with ULSD. We have found that filters have clogged up on dispensers, as well as bacteria increasing in the tank. We hear that the decrease in sulfur allows the bacteria to live. Trucking companies and municipalities tell us they are seeing injector problems in their vehicles as well. We have large truck leasing company customers who requested external filters be put on because of the fuel problems after ULSD was introduced.--Massachusetts

We are actually finding a fine particulate that looks like rust. Since the sites have FRP tanks and lines, we can only assume the substance is coming from pipelines or terminals, or the additives in ULSD are dissolving the film inside the fuel system on location or from the aforementioned areas. Not only are we overwhelmed with filter changes, but this same substance builds up on the STP check valve and the line leak detection will go into failure mode and will only go back to normal after cleaning the check valve and the valve seat in the STP head.--Texas

The ULSD is cleaning the tanks, lines and dispensers just like ethanol does. If a location has a dirty tank, lines and dispensers, this will happen. Filters should be installed before the fuel enters the meters. There are a lot of dispensers and pumps out there where the filters are at the discharge after the meters.--Massachusetts 

We have a customer that began using ULSD in November. Before that they used B20. Since ULSD was introduced, we have noticed the following:

• An increase in black and brown solids on the tank floor. We interpret this to be the cleansing action of the ULSD removing built-up solids from the tank interior.

• Plugged or slow-flow conditions from internal and external filters.

• Some whitish, translucent "threads" and suspended translucent droplets. We are not sure whether this is from the ULSD or the B20 that remained in the tanks when the seasonal load of ULSD was delivered, or both.

• As a side note, we were called by another customer that complained of repeated commercial filter change outs. While the tank bottoms were "clean," fuel samples revealed suspended "translucent droplets" that produced black precipitants when treated with biocide. Additionally, there seemed to be a significant amount of black flakey substances floating on top of the fuel. We guess that the floating material was just broken-loose tank residues that had been freed due to the detergent action of the ULSD, but for some unknown reason produced "floaters" rather than "sinkers." --Missouri

ULSD cleans tanks in the same way E10 does. Then sometimes additive packages drop out of the fuel. In both cases, the net result is plugging of filters and meters with goo, grime, particulate, etc. It is also possible for the ULSD to pick up carboxylates which are not gas soluble. They are only water soluble and plug filters, meters and valves. This contamination tends to take on the color of material it is seeing, whether it is white, black, red, rouge-rust colored, or whatever. ULSD also has a greater propensity for microbial growth. The net result here is the impact of microbial-influenced corrosion, which creates particulate contamination/slime, etc., thereby plugging and scoring filters, valves, meters, etc.--Tennessee

EXXON INVOLVED WITH ELECTRIC VEHICLES
Exxon Mobil announced January 23 that its new battery film technology will be an integral part of Electrovaya's new all-electric vehicles. Exxon Mobil said the battery separator films significantly enhance the power, safety and reliability of lithium-ion batteries, thereby helping speed the adoption of these smaller and lighter batteries into the next wave of lower-emission vehicles.

The battery film technology is being used in Electrovaya's recently-released Maya-300, a zero emission, low speed vehicle. The Maya-300 is designed for urban and neighborhood driving and has a range of up to 120 miles. The vehicle's top speed is 25 to 35 miles per hour, and is rechargeable with standard 110V outlets.

MEMBERSHIP APPLICATIONS
Georgia distributor. Augusta Petroleum Equipment Services, P. O. Box 5822, Augusta, Georgia 30906, has applied for distributor division membership. Keith Wells is CEO of the firm, which was established in 2002. The company represents Bennett, EmcoWheatn, ESCO, MetersInc, RDMElec and Tronitec. Sponsored by Bob Chase, Bennett, Spring Lake, MI; Betty West, EmcoWheatn, Wilson, NC; and Douglas R. Duncan, MetersInc, Cartersville, GA.
Liquid level gauge manufacturer. The Tokheim Company, 560 31st Street, Marion, Iowa 52302, has applied for manufacturer division membership. Thomas A. Barnes is president of the company, which was established in 1898. The company manufactures liquid level gauges, overfill alarms, flame arresters and pressure vacuum valves. This equipment is sold through distributors. Sponsored for PEI membership by Terry D. Cooper, Acterra, Marion, IA.
Centrifugal pump manufacturer. MP Pumps, Inc., 34800 Bennett Drive, Frazer, Michigan 48026, has applied for manufacturer division membership. David A. Lewandowski is marketing manager for the firm, which was established in 1942. MP Pumps manufactures centrifugal pumps in a variety of sizes compatible for transfer of diesel, biodiesel, fuel oil, Jet A, Jet B, AvGas, gasoline, ethanol and E85. The pumps are sold through distributors. Sponsored for PEI membership by Patricia Tinsley, FuelTechFL, Mims, FL.
Florida petroleum contractor. CT Earle Corporation, 7001 Gibsonton Drive, Gibsonton, Florida 33534, has applied for membership in the service and construction division. David J. Lennie is vice president of the firm, which was established in 1972. The company installs and upgrades tanks, piping, electrical and associated equipment. Sponsored for PEI membership by Matt Cothren, UnivStruc, Plant City, FL.
 

ADMITTED TO PEI

• David H. Rose, Rubis Energy Bermuda, St. Georges, Bermuda (O&E)
• Ruben Ojeda, PDVSA Deltaven, S.A., Caracas, Venezuela (O&E)

©2008
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.