June 1, 2011 | Vol. 61, No. 11

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Dear PEI Member:

Last week, Iowa Governor Terry Branstad signed a comprehensive renewable fuels bill into law. It establishes the nation's first specific E15 incentive for Iowa's petroleum retailers to offer the mid-level blend to motorists in the state. Among other things, the new law:

Provides retailers with a 3-cents-per gallon retailer income tax credit for sales of E15;
Extends the 16-cents-per-gallon E85 Promotion Credit until December 31, 2017;
Provides $3 million per year for biofuels infrastructure, such as blender, E85 and biodiesel dispensers;
Provides retailer stations with liability protection from consumer lawsuits for misfueling, as long as the retail station has provided the proper and legal labeling; and
Encourages petroleum marketers to blend biodiesel into on- and off-road diesel in a multi-year incentive program. In 2012, retailers will earn 2-cents-per-gallon for B2 blends and 4.5-cents-per-gallon for B5. Retailers will earn 4.5-cents-per-gallon for selling B5 from 2013 through 2017, but the B2 blend credit would disappear after 2012.

Fuel retailers in Iowa will be eligible to receive the 3-cents tax credit beginning July 1, or as soon as the U.S. EPA clears the fuel for legal sale. EPA is expected to give final approval for E15 this summer for use in all 2001 and newer cars and light-duty trucks.

A lobbyist for a petroleum marketer association told me yesterday: "Iowa got it right. They are providing the retailer much-needed incentives to market this new fuel, money to upgrade equipment, and liability protection from motorists who misfuel. This is a law―while not perfect―we can support."

The road to widespread acceptance of E15 and other ethanol blends will be long and uneven. Conventional wisdom suggests that the movement would begin in the corn-rich Midwestern states. Iowa's law should get things started.

Iowa Passes E15 Incentive Law

Decommissioning Stage II VR Gets OK From OMB

PEI's Charles B. Kemp Scholarship Awards Announced

PEI and Industry News »

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WHITE HOUSE MOVING FORWARD TOWARD ENDING STAGE II VAPOR RECOVERY
On May 26, the Obama administration released hundreds of changes to rules that could potentially help businesses save time and money. One of the rules expected to be changed has to do with ending the requirement for Stage II vapor recovery controls at many of the nation's service stations.

The Clean Air Act empowers the Environmental Protection Agency (EPA) to repeal Stage II vapor recovery once on-board vapor recovery systems installed on vehicles reach "widespread use." On March 29, EPA submitted a proposed definition of widespread use to the Office of Management and Budget (OMB). Last Thursday's announcement by OMB Director Jack Lew indicates that the White House will move forward with the issuance of a rule to define widespread use, thus clearing the way for ending Stage II vapor recovery controls. While we are now confident that a definition of widespread use will be proposed by EPA, how the term is defined―in our opinion, there are at least four viable options―and when it would take effect, remain uncertain.

Lew predicted that the removal of Stage II vapor recovery will save gasoline retailers $67 million per year. There was no mention of the cost involved in decommissioning Stage II systems. PEI's Recommended Practices for Installation and Testing of Vapor-Recovery Systems at Vehicle-Fueling Sites (PEI/RP300-09) contains detailed information on decommissioning Stage II vapor-recovery equipment and piping.

SIX CHARLES D. KEMP SCHOLARSHIP RECIPIENTS NAMED
The PEI Foundation's scholarship selection committee has selected six entering college freshmen to receive Charles D. Kemp scholarships. Recipients of the $1,000 scholarships are:

Eamon Paton, son of Carol C. Paton, Susser Holdings, LLC, Corpus Christi, TX.
Andrew Joseph Patterson, son of Thomas A. Patterson, Charles E. Thomas Co., Gardena, CA.
Nicholas Pierce, son of Cary Pierce, Great Plains Industries, Wichita, KS.
Mackenzie Schuler, daughter of David Schuler, Northwest Pump and Equipment, Portland, OR.
Chyna Simms, daughter of Brad Simms, Unified Contracting Services, Des Moines, IA.
Patricia Watkins, daughter of Robert H. Watkins, Baird Petroleum Equipment LLC, Richmond, VA.

PEI BOARD ELECTION DEADLINE
It is time to begin the process of electing members to the PEI Board of Directors. Under PEI's election procedure, the official representative or a duly appointed alternate must request to have his/her name included on the ballot. A form for that purpose was sent May 26 to the official representatives of PEI member companies from the odd-numbered districts of PEI's distributor and manufacturer divisions and PEI's service and construction division. The form must be received in Tulsa by the close of business on Monday, June 6, for the name to appear on the ballot. If you have misplaced your form and need another one, email Micah Marquette at mmarquette@pei.org.

DEF AND E85
Pilot Travel Centers is expected to increase the number of lanes where truckers can obtain diesel exhaust fluid at its Pilot and Flying J locations from 68 to around 1,000 by October 2011, according to Christopher Goodfellow of discoverdef.com. Over that time, the number of truck stops dispensing DEF in bulk will increase from 68 to over 180, writes Goodfellow.
Sales of E85 by Iowa gasoline retailers reached 2,645,038 gallons during the first three months of 2011. Compared with the first quarter of 2010, E85 sales were up 64 percent in 2011.―Iowa Department of Revenue.

ELECTRIC CAR CHARGING: WHERE DO THE PEI GUYS FIT IN?
"Electric car buyers aren't yet sold on the need for home charging systems. The high-voltage devices can juice up an electric vehicle in about half the time as a regular 110-volt outlet. But even keen EVers see them just as pricey accessories, since an overnight charge from a 110V outlet yields about 50 miles of driving range.

"But odds are demand for chargers will build, once EV sales perk up a bit and as buyers come to see fast charging as a way to exploit gains in battery capacity.

"Chargers offer a future opportunity for savvy retailers. As their prices fall, the systems could be well suited for major electronics chains and big-box stores, since shoppers already trust them when purchasing most of their home appliances."―The Kiplinger Letter, May 20, 2011.

ON THE CAMPAIGN TRAIL
"I support the subsidy of ethanol. I believe ethanol is an important part of our energy solution in this country."―Mitt Romney, former governor from Massachusetts, while campaigning in Iowa.
"The truth about federal energy subsidies, including federal subsidies for ethanol, is they have to be phased out. We need to do it gradually. We need to do it fairly. But we need to do it."―Tim Pawlenty, former governor from Minnesota, while campaigning in Iowa.

PEI MEMBER NOTES
OPW Fuel Management Systems, a business unit of OPW Fueling Components, has named Joe Dowling as engineering manager, product development. OPW Fuel Management Systems is celebrating its 50th year in the fuel controls industry.
Jones & Frank has relocated its Philadelphia branch office to a new and larger facility in northeast Philadelphia: 12301 McNulty Road, Unit F, Philadelphia, PA 19154. Phone: (215) 613-5705. Fax: (215) 613-5708.

MEMBERSHIP APPLICATIONS
Tank monitoring system manufacturer. TankScan, 4240 Lake Ridge Drive, Big Lake, Minnesota 55309, has applied for manufacturer division membership. Mike Murray is sales manager for the firm, which was established in 1956. TankScan manufactures tank monitoring systems which are sold through distributors. Sponsored for PEI membership by Scott Olson, NorthIndMN, Big Lake, MN. www.tankscan.com
Bollard and bollard cover manufacturer. Encore Commercial Products dba Post Guard, 24370 Northwestern Highway, Suite 250, Southfield, Michigan 48075, has applied for manufacturer division membership. Bruce Liebowitz is president of the firm, which was established in 2002. The company manufactures bollards and bollard covers for the petroleum industry and other customers. The products are sold through distributors. Sponsored for PEI membership by David Curlee, ExcelEqp, Greenwood, IN. www.postguard.com
Specialty chemical manufacturer. Sartomer USA LLC, 502 Thomas Jones Way, Exton, Pennsylvania 19341, has applied for affiliate division membership. Jim Zawicki is manager marketing communications for the company, which was established in 1956. Sartomer manufactures a product that detects water bottoms in storage tanks. Sponsored for PEI membership by Timothy K. Woofter, Stanwade, Hartford, OH. www.sartomer.com
California installation and maintenance company. IDECO Inc., 431 West Blueridge Avenue, Orange, California 92865, has applied for service and construction division membership. Dave Amheiter is president of the company, which was established in 1990. The company installs, repairs and maintains fueling systems. Sponsored for PEI membership by Robert Wallace, IDECONV, Henderson, NV.
Iowa service and maintenance firm. Barker Lemar Petroleum Services, 1801 Industrial Circle, West Des Moines, Iowa 50265, has applied for service and construction division membership. Craig Morrison is the primary contact for the firm, which was established in 2008. The company services and maintains pump and dispensers; repairs, maintains and tests ATGs; and provides third-party compliance inspections. Sponsored for PEI membership by Doc Boehme, BottomLine, Osakis, MN. www.barkerlemar.com
New Hampshire service company. Petroleum Equipment Service of New Hampshire, 862 South Porter Street, Manchester, New Hampshire 03103, has applied for service and construction division membership. Ken Tucker is a lead technician for the firm, which was established in 2006. The company provides service in the New England and Mid-Atlantic regions, focusing on retail petroleum stations. Sponsored for PEI membership by Bill Reichhold, Wayne, Austin, TX. www.pesnh.com

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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.