May 14, 2009 | Vol. 59, No. 12

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Dear PEI Member:

In 2005, Visa announced a global mandate for Triple Data Encryption Standard (TDES) usage and established July 1, 2010, as the date for global compliance. Visa says that it "transitioned to TDES because global industry standards bodies (e.g., International Organization for Standardization) no longer recognized the older single-DES (SDES) algorithm for the protection of PINs." The TDES usage mandate is part of a PIN Security and Key Management compliance program that includes other PIN Entry Device (PED) testing mandates focusing on the physical and logical security and TDES capabilities of all devices that accept and process PINs.

On April 22, 2009, Visa issued an update on its compliance policy to facilitate TDES usage for petroleum merchants using debit at automated fuel dispensers (AFDs).

The April 22 update tweaked the 2005 compliance policy but did not change the July 1, 2010, TDES usage mandate. Visa announced the following enforcement policy regarding TDES usage for petroleum merchants in the United States:

October 1, 2009: Acquirers (companies like Chase Paymentech Solutions, SunTrust Bank Merchant Services, Capital One Merchant Services, etc.) must submit to Visa a summary TDES compliance status report and plan to achieve full compliance for sponsored AFD activity.
July 1, 2010: Acquirers may be assessed fines for merchants that are not using at least SDES Derived Unique Key per Transaction (DUKPT) or TDES.

PCI Update

ATC

Stage II Vapor Recovery In Europe

PEI and Industry Events »

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Visa also issued the following enforcement policy regarding encrypting PIN pad (EPP) usage for petroleum merchants in the United States:

January 1, 2009: Acquirers may be assessed fines for newly-deployed AFDs without TDES-capable Payment Card Industry (PCI)-approved EPPs.
October 1, 2009: Acquirers must submit a summary AFD EPP attestation for newly-deployed AFDs at sponsored merchants.

Visa went on to warn merchants and acquirers that "in the event of a PIN compromise, acquirers will continue to be subject to Account Data Compromise Recovery, Data Compromise Recovery Solution, or similar program liability (in addition to potential fines) if the entity is found to be non-compliant with the Payment Card Industry PIN Security Requirements including any use of SDES past July 1, 2010."

We are still trying to get a handle on what all of this means to the petroleum equipment industry. Here is our take on it at this time:

There is no change on new dispensers. New dispensers put into service after January 1, 2009, still must have TDES-capable PCI-approved EPPs.
Liability for non-compliance is on the shoulders of the acquirer and merchant. If SDES systems are compromised after July 1, 2010, the acquirer (and usually the merchant by contract with the acquirer) will be subject to fines and liability.
For petroleum retailers, fines will not automatically be assessed to their acquirer for retailers using SDES DUKPT on their dispensers.

Now that Visa has spoken, the next move will be made by the acquirers. Will they let their merchants slide past the July 1, 2010, deadline understanding that they—the acquirers—will be held responsible if there is a PIN compromise? That's something we will learn over the summer, as retailers and acquirers compile their plans. And if the acquirer is willing to give the merchant some breathing room, what risks are the merchants willing to take in light of the potential fines, liability and damage to their brand that could be caused in event their POS is compromised? Visa warned merchants in its April 22 announcement that "clients are encouraged to transition to TDES usage as quickly as possible to provide the highest level of protection."

The bottom line for PEI manufacturers, distributors and installers of PCI-compliant equipment is that the timing of equipment sales and installation jobs is in flux, depending on how retailers react to the liability and risk that the Visa announcement placed on them. At this stage, the impact is too uncertain to even hazard a guess about when PCI work will begin in earnest.

CENTRAL WEIGHTS AND MEASURES OFFICIALS OPPOSE ATC
The Central Weights and Measures Association (CWMA) voted unanimously to oppose both the permissive and mandatory use of automatic temperature compensation (ATC). The group will urge the National Conference on Weights and Measures (NCWM) to prohibit the use of ATC at retail during its annual meeting this July in San Antonio. We continue to believe that the NCWM proposals related to the permissive and mandatory use of ATC will be defeated at the NCWM meeting.

STAGE II VAPOR RECOVERY COMING TO EUROPE
The European Parliament has confirmed a first-reading agreement reached in informal negotiations with the Council of the European Union which requires Stage II vapor recovery at new or renovated service stations with large throughput as of January 1, 2012. Almost all service stations will be required to install Stage II equipment by 2018, two years earlier than proposed by the European Commission. According to Commission data, the EU has about 110,000 service stations.

BRIEFLY NOTED
Suggested changes to PEI's Recommended Practices for Installation and Testing of Vapor Recovery Systems at Vehicle Fueling Sites (PEI/RP300-04) are due by the close of business Friday, May 15. Comments are also solicited for a new chapter on decommissioning Stage II vapor recovery. The 2004 edition of the recommended practice, the new chapter and checklist on decommissioning Stage II vapor recovery, and a comment form are available at www.pei.org/RP300.
The General Services Administration will spend $15 million for pilot programs involving compressed natural gas and hybrid buses, and all-electric vehicles, the Obama administration said. Orders for the vehicles will be placed by September 30.
"The retail gasoline market was peppered with pumps at grocery stores as far back as 1992, Lundberg price surveys show. In the mid-'90s fear of roaring Big Box gasoline sales grew to a crescendo of doomsday predictions for the widespread demise of traditional stations. Instead, it has taken 17 years for the likes of Costco, Wal-Mart, Randalls and others to amass 9.8% gasoline market share. They will still have well under 11% share of market three years from now, we project."—Lundberg Letter, February 16, 2009.

DEF NEWS
Over 230 people and 25 exhibitors are registered to attend the PEI/NATSO DEF Conference June 5 at the Gaylord Opryland Hotel in Nashville. Hotel rooms at the negotiated conference rate are available until May 18. Registration fees increase after May 22. Go to the DEF Conference section at www.pei.org to register.
"Love's Travel Stops says it will install bulk DEF facilities in 50 locations, beginning later this year. The specific locations and timeframe of the rollout will depend on initial demand for DEF, says Jon Archard, Love's director of fleet sales."—Oil Express, May 11, 2009.

NACS SHOW EXHIBIT BOOTH SPACE
PEI’s 59th Annual Convention will be held in conjunction with the 2009 NACS Show at the Las Vegas Convention Center in Las Vegas, Nevada, October 21-23, 2009. Exhibit space in the Petroleum Equipment & Services area of the NACS Show is selling quickly. To date we have 110 PEI members showing equipment in over 380 booths. As before, the NACS Show is organized into six areas, with the Petroleum Equipment & Services section containing most PEI members' products. The Technology area is once again conveniently located adjacent to Petroleum Equipment & Services. Exhibit privileges in the show are open to all PEI members at a discounted booth rate for the show: $30.50 per square foot for PEI members compared to $40.50 per square foot for nonmembers. Exhibit application materials along with a list of exhibiting companies and a floor plan are now available online. For more details contact Bob Young at 918-494-9696 or by email, byoung@pei.org.

EPA TO DISTRIBUTE NEARLY $200 MILLION FOR UST CLEANUPS
The Environmental Protection Agency will distribute $197 million from the economic stimulus bill for the cleanup of leaking underground storage tanks (USTs). The funds come from the American Recovery and Reinvestment Act of 2009, the $787 billion stimulus bill signed into law February 17. States will be able to use the funds to oversee the cleanup of UST leaks, or directly pay for cleaning up leaks from federally regulated tanks when the responsible party is unknown, unwilling, or unable to do so, or the cleanup is in response to an emergency. California will receive more than $15.5 million for UST cleanups, the most of any state or territory. Other states receiving large amounts include Florida ($11.3 million); Texas ($10.8 million); New York ($9.2 million); Ohio ($8 million); Illinois ($7.4 million); Wisconsin ($6.4 million); and Pennsylvania ($6.1 million).

DEATHS
William B. Riddell, former president and owner of Hall Equipment Company, Inc., Quincy, Massachusetts, died April 19 at the age of 77. He began his career at Hall as a stock person in 1957 and rose to become president and owner in 1981. Upon his retirement and sale of his business, he moved to Atlanta to be closer to his children and grandchildren. He is survived by two sons, Andrew and Stephen, and three grandchildren.

MEMBERSHIP APPLICATIONS
DEF dispensing systems manufacturer. American Controls, Inc., P. O. Box 324, Farmington Hills, Michigan 48332, has applied for manufacturer division membership. Bob Taylor is a sales engineer for the firm, which was established in 1969. American Controls manufactures DEF fluid dispensing systems which are sold through distributors. Sponsored for PEI membership by Steve Murray, MurrayEqp, Fort Wayne, IN.
California installation and service contractor. SW Maintenance Corp., 3116 Highway 97, Weed, California 96094, has applied for service and construction division membership. Jeremy Ward is CEO of the firm, which was established in 2004. The company builds service stations, and tests and maintains equipment. Sponsored for PEI membership by Fred Monroe, Monroe, Arlington, TX.
Indiana installation and service contractor. Jacobs Professional Services, Inc., P. O. Box 7, Monon, Indiana 47959, has applied for service and construction division membership. Stacy Jacobs is president of the firm, which was established in 2006. Jacobs is a petroleum construction company that builds new sites and upgrades existing sites. Sponsored for PEI membership by Daniel J. Esposito, OilEqpSup, Indianapolis, IN.

ADMITTED TO PEI

Pump Tech of Louisiana, Crowley, LA (dis)
New Wave Industries, Inc., North Highlands, CA (mfr)
Bryant and Company, Inc., Birmingham, AL (S&C)
Trinium LLC, Chandler, AZ (S&C)
ACM-Petrotica, San Jose, Costa Rica (S&C)
Convenience Store Service, Burlington, NC (S&C)
Elgon Petroleum Inc., Saskatoon, Saskatchewan (S&C)
G an D Petroleum, LLC, Janesville, WI (S&C)
VRX Company, Inc., Maryville, TN (aff)
Practical American Safety Solutions, LLC, Muncie, IN (aff)
M D Shaw & Associates, P.C., Huntersville, NC (aff)

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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.