March 3, 2011 | Vol. 61, No. 5
March 3,
2011 | Vol. 61, No. 5
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| Dear PEI Member: We met with more than 120 members and their customers in February at various industry meetings, including the Western Petroleum Marketers Association and NATSO annual conventions. Based on what they told us, here's our take on the prospects for the rest of the year. Overall, this year is shaping up to be no better―but no worse―than 2010. About one-third of the members expect improvement, another third a slight downturn, and the rest about the same as last year. PCI compliance work is 80 to 85 percent finished, and the lion's share of what's left to be done should be completed by summer. Underground storage tank inspections continue to produce some upgrade/replacement work, but it's primarily nickel and dime stuff. Problems with ultra low sulfur diesel haven't magically disappeared. Some new construction projects are on the books, although many are waiting for financing and/or the end of winter. We have the impression that our members are in a little better shape construction-wise going in to the spring of 2011 than they were a year ago. The sale and installation of diesel exhaust fluid (DEF) equipment should take off somewhere between the fourth quarter of 2011 and the second quarter of 2012. It is during this time period that on-road trucks requiring DEF should hit the 10 to 12 percent mark. Truck stop owners/operators suggest that they will begin to lose business inside the store and at the diesel dispenser if they haven't moved from 1- to 2.5-gallon jugs of DEF to filling at the island by that time. Commercial trucking companies that have replaced vehicles recently and that fuel locally should begin the transition from jugs (at $5 per gallon) to drums, totes and mini-bulks (at $2.20 to $3.50 per gallon) during the same time period. The biggest question for retail marketers now is the appropriate size of the tank and whether to put it on the island or under ground. Conversations about various E15 scenarios are certainly on the uptick.
However, with all the confusion and uncertainty surrounding the introduction
of E15, petroleum marketers are taking a wait-and-see approach before
actually making changes to their refueling equipment infrastructure. For
starters, a House bill passed two weeks ago to fund the government through
September would prevent EPA from proceeding with its program to allow E15 in
newer vehicles. The bill also would block federal funding for the
installation of certain ethanol-related infrastructure at refueling
facilities. If the House bill issue is resolved (industry
observers think it will be) then the industry still must deal with a host of
state and federal requirements―as well as practical challenges―before
bringing E15 to market. EPA regulations; FTC and EPA labeling requirements;
state fuel requirements (blend level caps, vapor pressure limits, fire
safety codes and NIST specifications); ASTM specifications; and multiple
lawsuits need to be met/resolved before the marketers will consider changing
their legacy equipment. What equipment a petroleum marketer installs in new
facilities is a tough decision at this stage of the game. |
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by e-mail to the editor, Robert Renkes at rrenkes@pei.org or join the discussion in the Petroleum Equipment Forum to unsubscribe or change preferences see below. |
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PEI NETWORKING AND LEARNING EVENTS Just a few more days remain before PEI's first Spring Sales Boot Camp (Las Vegas, March 10-11). Two more boot camps are planned for Baltimore (April 5-6) and Chicago (April 7-8). Learn why "Selling Has Nothing To Do With Selling" and register at www.pei.org/bootcamp. And don't forget PEI's always popular Service & Construction Managers Conference (March 31-April 2 in Chicago). The event features exceptional networking opportunities, informative roundtable discussions, energizing general sessions and top-tier sponsors exhibiting the latest in today's technology. Get all the details and register for the conference at www.pei.org/sc2011. DEATHS MEMBERSHIP APPLICATIONS
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©2011 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. |
