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Dear PEI Member:

Weights and measures officials in the United States have debated the costs and benefits of automatic temperature compensation (ATC), off and on, for over three decades with no resolution. In general, supporters of temperature compensation at the retail level claim that ATC provides a more accurate and replicable measurement method, while those who are opposed argue that upgrading existing equipment would be costly and pose potential economic hardship on gasoline retailers.

State and local governments develop weights and measures regulations with input from the National Conference on Weights and Measures (NCWM). In 2007, a NCWM standing committee recommended a proposal to allow, but not require, automatic temperature compensation at the retail level. NCWM did not reach consensus on that proposal and the issue was deferred for further consideration. In 2008, a NCWM steering committee recommended a proposal to require automatic temperature compensation following a 10-year period during which retailers could decide to purchase the equipment based on their business needs. But as before, NCWM members did not reach a consensus on the proposal, and that issue was also deferred for further consideration.

Petroleum marketers have maintained that implementing ATC for retail fuel sales would involve costs to purchase, install, and inspect new equipment on gasoline dispensers, as well as costs to educate consumers about the change. Representative Bart Gordon, chairman of the Committee on Science and Technology, asked the U.S. Government Accountability Office (GAO) to provide information on the costs of ATC, who would bear those costs, and the reasons some state and national governments have adopted or rejected ATC. That report was issued October 15.

The 26-page report, while well-written and factually correct, doesn't resolve any of the issues in question. GAO's conclusions were that:

• The magnitude of equipment and education costs of adopting automatic temperature compensation are unclear,
• It is also unclear who would bear the costs of implementing ATC, and
• The governments that have adopted automatic temperature compensation did so largely to improve purchasing equity, and those that have not cited concerns that the costs would outweigh the benefits.

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So, what happens next? In 2007, the California legislature directed the state Energy Commission to study the costs and benefits of purchasing and installing ATC devices for retail petroleum sales. In addition, the study will develop data on the costs to agencies to develop appropriate test procedures, acquire calibration equipment, and inspect dispensers at retail stations. Our take is that lawmakers in Washington and NCWM officials will wait for the California report, scheduled to be completed February 2009, before deciding what to do with ATC. I predicted earlier this month at the PEI membership meeting in Chicago that automatic temperature compensation will not be required. I haven't changed my mind.

2008 CHICAGO CONVENTION RECAP
PEI members who attended our annual convention in Chicago were generally pleased with business and optimistic about the future. Exhibitors rated the show "very good" and were happy about the overall quality of the attendees. Members wishing to download a free list of convention attendees can log in here. For the benefit of those who couldn't be in Chicago, here is a brief summary of the convention's highlights.

Blair Shwedo, president of SouthEastern Petroleum Systems Inc. (SEPS), headquartered in Charlotte, North Carolina, was elected to serve as the 59th president of PEI. On January 1, Shwedo will succeed Bruce Larson, president of the Oscar W. Larson Co., headquartered in Clarkston, Michigan, in PEI's top elected position. Shwedo is currently serving as PEI vice president. 

Replacing Shwedo as vice president will be Peter Ward, president of Glasgow Equipment Service, Inc., Riviera Beach, Florida. Ward has just completed his term as treasurer of the association, and has previously served three terms on the PEI board representing Distributor District 3. Dennis Rethmeier, president of Western Pump, Inc., headquartered in San Diego, California, was appointed treasurer of the association by the PEI Board of Directors.

Seven new members were also installed as members of the association's board of directors during the Chicago convention. They are Craig Smith, Francis Smith & Sons, Inc., Chinchilla, Pennsylvania (District 2); Monti Harris, Oil Equipment Supply Corp., Indianapolis, Indiana (District 4); Phil Farrell, Double Check Company, Inc., Kansas City, Missouri (District 6); Robert J. Peavey, PumpTex Inc., Beaumont, Texas (District 8); Al Eichorn, PMP Corporation, Avon, Connecticut (District 10); Robert J. Milo, Universal Valve Company, Inc., Elizabeth, New Jersey (District 12); and Erik T. Long, Walsh, Long & Company, Inc., Naperville, Illinois (Affiliate Division).

The PEI Board of Directors met twice in Chicago and took the following action on items of interest to the membership:

• Appointed four members to the Petroleum Equipment Institute Foundation's Board of Governors. The Foundation hopes to award scholarships to eligible students entering their freshman year of college beginning in 2009, provided IRS approval of the Foundation's request for tax exempt status is granted.
• Directed staff to explore the development of WikiPEI, a Wikipedia-like, online encyclopedia of petroleum equipment terms. It is envisioned that WikiPEI would be the preferred method of updating and expanding the Petroleum Equipment Lexicon, published in 1995, and now out of print.
• Decided not to develop a recommended practice covering electrical continuity testing of vehicle transport hose.
• Adopted a conflict of interest policy.
• Asked staff to continue to monitor the apprenticeship project for petroleum equipment technicians being developed in Canada.

The educational and PEI-sponsored events planned by the 2008 Education and Convention Committees were top notch and well attended. Recordings and PowerPoint presentations of the sessions can be ordered now at www.pei.org/show.    

It takes an extraordinary number of people to make the PEI Convention the premier event for our industry. Thanks to all the volunteers who helped make the convention a success: the Find Red team, 10-Group chairmen, education and convention committee members, session presenters and introducers, officers and directors, and Priority Club members.

ACQUISITIONS AND EXPANSIONS
Crompco, LLC, Plymouth Meeting, Pennsylvania, acquired AAA Tank Testers, Braselton, Georgia, on October 14. The joint organization will operate under the Crompco name and will offer expanded services that include traditional tank and line testing, currently offered by both companies, in addition to compliance management, sump repairs, and cathodic protection. John Bracknell, vice president of operations at AAA Tank Testers, will stay on at Crompco in a sales and marketing role.
Petroleum Solutions, Inc., headquartered in McAllen, Texas, opened its seventh office in Texas on October 13. Its Dallas office will sell and service equipment throughout the Dallas/Ft. Worth Metroplex. The office is located at 1362 West North Carrier Parkway, Dallas, Texas 75050. Phone: (972) 744-0061. Randy Ward, the company's vice president of operations, has oversight of the Dallas location.
United Pump Supply, headquartered in Dallas, Texas, purchased D&H Petroleum & Environmental Services, headquartered in El Paso, Texas, on October 1. The only change resulting from this acquisition is in ownership, as all D&H employees will continue with the company, announced D&H president Calvin Bishop. Bishop served as PEI president in 2007.
Western Pump, Inc., headquartered in San Diego, California, acquired Boen's Service Station Maintenance of Indio, California, on September 19. The entire team from Boen's will join Western Pump under the leadership of Edward Justice, the company's new branch operations manager.

ALTERNATIVE FUELS
Indonesia has issued a ministerial decree making the use of biofuels mandatory beginning in 2009, according to Energy Minister Purnomo Yusgiantoro. Next year, a blend of 1 percent biodiesel and 99 percent regular diesel, known as B1, will be used in the transport sector, while the industrial and power sectors will use a blend containing 2.5 percent and 0.25 percent biodiesel, respectively. By 2010, the biodiesel blend will be increased to between 2.5 percent and 3 percent for transport, 5 percent for industry, and 1 percent for power plants. A bioethanol blend of 1 percent to 5 percent in gasoline for transport will also become mandatory in 2009.

APPOINTMENTS
Bennett Pump Company, Spring Lake, Michigan, announced that James Collier has joined its organization as vice president of sales. Collier has leadership responsibility for all U.S. and Canadian sales activity. Prior to joining Bennett, Collier was director of sales-West for Gilbarco Veeder-Root.
Power Integrity Corporation, Greensboro, North Carolina, has named Craig P. McNeill president of the company. Based in Greensboro, McNeill has leadership responsibility for the company's entire business, including day-to-day activities. He was previously president of OPW Fueling Components. Jim Fesmire, co-owner of Power Integrity and former president, will remain as chairman of the board. Deborah Wilson will continue as vice president.

DIESEL EXHAUST FLUID (UREA)
The number of trucks using Selective Catalytic Reduction (SCR) technology in Europe is now over 600,000. These vehicles use a 32.5 percent solution of high-purity urea to reduce emissions of nitrous oxides from the exhaust of diesel vehicles. The urea used in Europe is known as AdBlue, a registered trademark held by the German Association of the Automobile Industry. There are currently over 2,000 retail locations in Europe equipped with pumps dispensing AdBlue. Germany has the most (376), followed by France (368), Spain (207), Sweden (167), and The Netherlands (163).
Pilot Travel Centers, Knoxville, Tennessee, has announced that diesel exhaust fluid (DEF)--urea--will be available at more than 100 Pilot truckstops by late 2009. It claims its decision to make DEF available at the pump will maximize affordability and convenience for customers using engines with SCR. Pilot also announced all of its truckstops will offer DEF in pre-packaged containers for top-ups.—Truck News, October 3, 2008.
There is an excellent article on Diesel Exhaust Fluid (DEF) in the Third Quarter issue of The PEI Journal. It was written by Vijay Srinivasan, Ph.D., general manager of Balcrank Products.

PETROLEUM MARKETING NOTES
Pilot Corp., a parent company of Pilot Travel Centers (PTC), announced that CVC Capital Partners has acquired a 47.5 percent interest in PTC. CVC's investment was facilitated by the sale of Marathon Oil Corp.'s interest in PTC. The current management, led by CEO James A. Haslam III, will continue to manage the day-to-day operation of the business.
Heartland Inc., Middlesboro, Kentucky, acquired Lee Oil Co. on October 1. Lee Food Marts operates 23 convenience stores in Virginia, Tennessee and Kentucky.     
K&G Petroleum LLC, Denver, Colorado, has signed a purchase agreement to acquire 92 ConocoPhillips sites in Kansas, Missouri, Utah and New Mexico from Pacific Convenience & Fuels LLC. The deal is expected to close simultaneously with the acquisition of all of ConocoPhillips' remaining retail and convenience stores in the U.S. by Pacific Convenience & Fuels.
Jack in the Box Inc., San Diego, California, plans to sell the company's 61 Quick Stuff convenience stores. The stores market gasoline and are built adjacent to a full-size Jack in the Box restaurant. They are located in California, Texas, Arizona, Louisiana, Idaho, Washington and Illinois. 

MEMBERSHIP APPLICATIONS
Michigan petroleum equipment contractor. Ziller Electric/Ziller Construction, 2475 Brown Road, Orion, Michigan 48359, has applied for service and construction division membership. Jesse Barker is owner of the firm, which was established in 1985. The company is a full-service electrical contractor, and services and installs petroleum equipment and generators. Sponsored for PEI membership by Glen Corkill, SourceIL, Addison, IL.

MEMBERSHIP TRANSFER REQUESTS
Total Fuel Quality, 309 Mohawk Drive, Rotterdam Junction, New York 12150, has requested its membership in PEI be transferred from the manufacturer division to the affiliate division. The company consults on issues regarding microbial-induced corrosion (MIC). The transfer is sponsored by Thomas McClain, HenrichEqp, West Babylon, New York, and Ken Hayden, NEPtrTech, Schenectady, New York.
SHM Industries, P. O. Box 13, Obour City, Cairo, Egypt 11828, has requested its membership in PEI be transferred from the distributor division to the manufacturer division. The company manufactures single-wall and double-wall steel fuel storage tanks which are sold through distributors. The transfer is sponsored by Glyn Owens, PtrTechnik, Ipswich, Suffolk, United Kingdom, and Wayne Geyer, STI, Lake Zurich, Illinois.

ADMITTED TO PEI

• Controil, S.A. de C.V., Ecatepec, Mexico (S&C)
• Derrick M. Buchanan, Willbros Government Service, Tulsa, OK (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.