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During this time of the year, sharing predictions is easier for me than offering New Year's resolutions. Here is a 30,000-foot view about business prospects for 2013.

For PEI members, 2013 will mirror 2012. Some winners, some losers and a lot in the middle. Consolidation will continue throughout all membership divisions.  

Retail customers will get larger. Small and midsize fuel marketers will consolidate at a faster pace, yielding fewer but larger, better-capitalized marketers who will build more extensive retail networks to secure better pricing with higher throughput. Smaller jobbers will be squeezed while mom-and-pop operators will do what they can with the marginal locations.

Cellulosic biofuels will be brought to market after years of development as several producers are poised to ramp up production. Corn-based ethanol will still dominate, but cellulosic fuels may begin to provide a cheaper alternative to corn feedstocks in 2013.

The market for fast-charging electric vehicle (EV) equipment will remain modest, with most EV drivers preferring to power up fully at home, either overnight through a Level 1 110-volt wall outlet or through a Level 2 charger installed at home, at work or in a public charging station, such as a parking garage or shopping mall. Fast-charging units will be nice to have, but not necessary.

The demand for diesel exhaust fluid (DEF) equipment will reach a new high. The orders will come from both the retail and commercial markets as the U.S. Class 8 fleet goes full steam ahead with selective catalytic reduction (SCR) technology.

Slow growth in 2013 for E15 and higher ethanol blends. Although the Renewable Fuel Standard (RFS) requires refiners to blend 13.2 billion gallons of corn-based ethanol into the nation's gasoline supply this year and 13.8 billion gallons in 2013, current RINS (Renewable identification Numbers) stockpiles will be more than adequate to cover the extra 600 million gallons needed for 2013. Based on EPA's figures, refiners will roll over at least 2 billion RINS generated this year into the 2013 compliance year. With diminished flex-fuel vehicle (FFV) penetration (CAFE credits for their sale are being phased out), a smaller motor gasoline pool for blending alcohol and cellulosic biofuels just beginning to emerge, E15 availability at the pump will remain low.

Stage II vapor recovery equipment decommissioning should begin in earnest during the second half of 2013. Steady interest from the states regarding decommissioning has been shown over the last three months and rules/procedures should be in place in most states by summer to permit stations to remove Stage II if doing so makes economic sense.

Predictions for 2013

Franklin Fueling Acquires Flex-Ing

PEI Young Executives Conference

PEI Service Rate Survey

PEI and Industry News »

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No new federal underground tank rule next year. The federal EPA says the new rule will be out during the fall of 2013, but I wouldn't count on it until early in 2014.

FRANKLIN FUELING ACQUIRES FLEX-ING   
Franklin Fueling Systems, Madison, Wisconsin, has acquired Flex-ing Inc. of Sherman, Texas. Franklin Fueling paid $10.8 million for all of Flex-ing's assets including its property, manufacturing equipment and product rights. All of Flex-ing's operations will be incorporated into Franklin's manufacturing facility in Madison. Flex-ing expects sales of about $13 million this year.  

REGISTER NOW FOR THE YOUNG EXECUTIVES WINTER CONFERENCE
Registration is under way for the 2013 Young Executives (YE) Winter Conference, February 6-8, 2013, at the Sheraton Sand Key Resort in Tampa/Clearwater Beach, Florida. The three-day conference will feature Garrison Wynn―motivational speaker, professional entertainer, advisor and author―and a full day of networking and roundtable discussions on relevant industry topics.

Early registration (December 16 deadline) is $395 for YE members and $495 for non-members. The registration fees go up $100 per person after December 16.

The Sheraton Sand Key Resort is one of America's top ranked hotels and is located on one of the nation's top ranked beaches. Rates are $169 per night. Reservations should be made directly with the hotel at 727-593-6001. Housing reservations must be made before January 6, 2013, to assure you a room at that rate.

To register for or to obtain additional information about the 2013 Young Executives Winter Conference, visit www.pei.org/YE or contact Chris Bouldin at 918-236-3964.

PEI SERVICE RATE SURVEY
Members who provide service to their customers are encouraged to complete PEI's Annual Service Rates Survey. The short, online survey covers service rates, wages, operational considerations and benefits. The survey results are shown by geographic area and do not identify participating companies in any way. The survey will be live through January 11, 2013. Results will be available to participating member companies beginning January 18, 2013. To access the survey, click on this link.

REGULATORY BRIEFS
New Jersey. "After storm-related gasoline shortages left many motorists dry, lawmakers who blamed power outages at gas stations are now pushing for varied proposals to require that gas stations be equipped with back-up generators. While some officials want fuel retailers to pay out of pocket for what they see as a safety measure, others are suggesting a loan pool or even bulk purchasing to help station owners afford the equipment."―NorthJersey.com.
Oklahoma. The Oklahoma Corporation Commission has proposed changes to six chapters of its underground storage tank regulations. The regulations deal with repair recordkeeping, dispenser and fuel transfer requirements, testing of licensed environmental service providers, water in motor fuel, dispenser accuracy, indemnity fund rules, and the establishment of a test for a remediation consultant license. 
Wisconsin. The state's Stage II vapor recovery decommissioning guidance was revised effective November 26.

BRIEFLY NOTED
BP Products North America Inc. will convert 13 New York and 15 New Jersey stations from the Getty Petroleum Marketing brand to the BP brand. The sites will be operated by commission marketers and directly supplied out of BP's terminals in New York and New Jersey.
Petroleum retailers would benefit from a revolving loan fund from the federal government that would help them install new blender pumps that could accommodate E15 and higher ethanol blends.―Douglas Durante, executive director of the Clean Fuels Development Coalition, speaking at a November 14 webinar sponsored by the American Council on Renewable Energy.

MEMBER EXPANSIONS
Tait & Associates, Inc. has opened a new office in Bismarck, North Dakota. The office will be headed by Tracy J. Letzring, PE, a 25-year veteran of Tait.
L & O Mechanical Contractors moved December 1 to a larger shop and office at 835 Quaker Road, Macedon, New York 14502. Phone: 315-986-4006.

GROWTH ENERGY JOINS PEI PRIORITY CLUB
Growth Energy, based in Omaha, Nebraska, has joined the PEI Priority Club. The company becomes the Priority Club's 15th member, joining fellow members:

• Central Illinois Mfg. Co.
• Franklin Fueling Systems
• Gilbarco Veeder-Root
• Husky Corporation
• Modern Welding Company, Inc.
• NPN Magazine
• Petroleum Parts Inc.
• PMP Corporation
• RDM Industrial Electronics, Inc.
• STICO Mutual Insurance Company
• Universal Valve Company, Inc.
• Veeder-Root
• Wayne: A GE Energy Business
• ZCL/Xerxes Corporation.

The PEI Priority Club is an exclusive category of membership within PEI. Club members commit additional resources to the organization to support ongoing programs and events. Benefits of Priority Club membership include recognition throughout the year at PEI conferences and in PEI publications, discounted advertising and sponsorship opportunities, and first choice booth selection at the PEI/NACS tradeshow. Priority Club members and their guests also attend the President's Priority Club dinner held during PEI's annual convention. For more information about PEI's Priority Club, contact Carletta Denison at cdenison@pei.org.

APPOINTMENTS AND RETIREMENTS
Davisware, West Dundee, Illinois, has hired Alan Bird as vice president of development for the company.
Fleming Reid Petroleum Equipment Ltd., Stony Plain, Alberta, has added Tammie Garcia as sales, marketing and technical support manager.
OPW Fueling Components, A Dover Company, Cincinnati, Ohio, announced that longtime OPW veteran Jim Walton, vice president, regulatory affairs, will retire at the end of the year. 

DEATHS
Frank Phillips Low died August 26 from injuries sustained in a motorcycle accident in Ft. Myers, Florida. He was president of Illowa Enterprises and Quint Cities Petroleum, both of Moline, Illinois, serving in partnership with his brother, Jim. Frank retired in 2009 and moved to Ft. Myers in 2010. Survivors include his wife, Jane, and three daughters.

ADMITTED TO PEI

• Rocky Mountain Rep Agency, Aurora, CO (aff)
• Central Petroleum Maintenance, Pleasanton, CA (S&C)
• Vertgreen Industries, Papeete, Tahiti, French Polynesia (S&C)

 

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Petroleum Equipment Institute
P. O. Box 2380
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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.