Tulsaletter
March 28, 2013 | Vol. 63, No. 06

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Dear PEI Member:

Last week I received a telephone call from the trade press asking questions about E15 compatible equipment. She had been told by trade associations representing the petroleum marketing industry that there were serious equipment compatibility problems with gasoline blends above 10 percent ethanol (E10). It had been explained to her that "practically no petroleum marketer" has equipment compatible with E15. She wanted to confirm what she had been told.

I quickly replied that I didn't have those facts and figures on hand and that I assumed nobody knew for sure how many stations in the United States had E15-compatible equipment on the island and in the ground. Still, based on anecdotal information I had gathered over the past year, I concluded that the trade association executives were right: There are not too many stations currently set up to handle E15.

As soon as those words were out of my mouth, I posited that the stations being built today were outfitted with tanks, piping, valves, dispensers and hanging hardware that IS compatible with E15. She matter-of-factly remarked, "Yeah, that makes sense with all that's going on." And we moved on to talk about other ethanol-related matters.

Our conversation got me wondering if I was correct in assuming that all new stations―or rehabbed older ones―were E15 ready. So I surveyed 20 PEI members and asked them this one question: "Looking back at the last 10 gasoline refueling locations you installed―retail or commercial―how many were outfitted with 100% E15-compatible equipment."

The results of the little unscientific survey surprised me. Our 20 members responded that less than half (42 percent) of their last 10 installations were 100 percent E15-compatible. It's surprising because every piece of equipment manufactured today can be made E15-compatible and most equipment arrives from the factory E15-compatible as standard issue.

So why aren't the gasoline marketers and commercial users installing E15 compatible equipment? The top five explanations offered by our members: Denial. Cost. Short-sightedness. Anti-ethanol. Uninformed. So I'm glad I asked. I was wrong. Wasn't the first time; won't be the last.

HOUSE ENERGY COMMITTEE BEGINS REVIEW OF RFS
Launching a bipartisan review of the Renewable Fuel Standard (RFS), the House Energy and Commerce Committee last week released its first in a series of white papers that will examine a number of issues emerging with the current RFS system and solicit input from interested stakeholders.

E15 Equipment Compatibility in New Installations

House Committee Launches RFS Review

PEI Scholarship Application Deadline March 29

PEI Convention Housing and Registration Information Available April 1

PEI and Industry News »

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"It has been more than five years since the RFS was last revised, and we now have a wealth of actual implementation experience with it," the white paper explains. "In some respects, the RFS has unfolded as expected, but in others it has not. Some implementation challenges have emerged that received little if any consideration prior to passage of the Energy Independence and Security Act of 2007. Furthermore, the overall energy landscape has changed since 2007. It is time to undertake an assessment of the RFS."

The committee compiled a list of stakeholder questions in the first white paper, and aims to address each concern with higher ethanol blends in the new report. The committee is requesting interested stakeholders to send responses to these questions by April 5, 2013.

COALITION SEEKS SUPREME COURT REVIEW OF E15 CASE
An engine products coalition is asking the Supreme Court to reconsider a D.C. Circuit Court of Appeals decision that none of the parties had standing in a case challenging the EPA's decision to grant partial waivers approving the sale of E15 for some passenger cars and light trucks, but not older vehicles or for motorcycles, boats and off-road engines. The petition asks the Supreme Court to accept the case for review. If the Supreme Court does so, the parties will then ask the Court to reverse the appeal's court ruling that they have no right to challenge the EPA's partial waiver decisions. Last month, The American Petroleum Institute along with eight other associations filed a similar request to the Supreme Court to review the case.

PENDING LEGISLATION
Illinois. The Illinois House of Representatives has reintroduced legislation allowing the state to provide information to gasoline stations encouraging the stations to offer E15 as an option for customers. The bill also allows state agencies to provide information to stations on any financial assistance that may be available to subsidize the cost of providing E15 blended fuel to consumers.
Domestic Fuels Protection Act of 2013. Rep. John Shimkus (R-Illinois) reintroduced legislation that would provide protection for retailers offering E15 and other fuel blends. The bill (H.R. 1214) would provide misfueling protection for retailers who follow labeling for E15 and other transportation fuels that were authorized after January 1, 2010, by the EPA administrator. The bill also would give the EPA administrator the authority to issue guidelines to determine whether new and existing underground storage tanks and dispensing equipment are compatible with EPA-approved fuels.
New York and New Jersey. "Plans that would have certain motor fuel stations in New Jersey and New York add generators for emergency backup power are poised to advance now that bills in the states' legislatures have passed key hurdles."―Oil Express Alert, March 27, 2013.

PEI PEOPLE
Ed St. Amour will retire from Petroleum Marketing Equipment (PME), West Sacramento, California, on March 29. A 51-year veteran of the petroleum equipment industry, he began working at PME in 2002, after a long and distinguished career with Tokheim Corporation. Cell: 916-240-1991. Email: estamour@surewest.net.
Petroleum Solutions, Inc. (PSI), San Antonio, Texas, has promoted Alex Perez to manager of marketing and communications. In her new role, Ms. Perez will lead PSI's marketing efforts working with each regional manager, account manager and sales representative.
Cree Inc., Racine, Wisconsin, has named Scott Rampton as western regional manager of its Cree Petroleum Lighting team. A 30-year veteran of the petroleum equipment industry, Rampton will lead the sales efforts of Cree agents and distributors west of the Rocky Mountains to better serve their end user customers.

DEADLINE FOR CHARLES D. KEMP SCHOLARSHIPS IS MARCH 31

Each year the non-profit PEI Foundation awards Charles D. Kemp scholarships to deserving dependents of full-time employees of PEI member companies. Scholarship recipients are selected based on academic achievement, leadership, character, financial need and the applicant's intent to contribute to the future of the petroleum and energy handling industry. Eligible applicants must have a pre-declared major of business, engineering, distribution studies or similar degree program. The scholarships are $1,000 each and awarded to multiple deserving individuals each year.

Visit www.pei.org/foundation to download the complete scholarship guidelines and application. Deadline for completed applications is March 31.

PEI CONVENTION AT THE NACS SHOW 2013
Registration and housing for the 2013 PEI Convention at the NACS Show will open April 1. The event will be held October 12-15 in Atlanta at the Georgia World Congress Center. The PEI headquarters hotel, the Westin Peachtree Plaza, will host multiple PEI events including the Young Executives Discussion Groups and Reception; the 10-Group Breakfast, General Session and Breakouts; and the PEI After-Hours Lounge. PEI also has room blocks at the Hilton Garden Inn Downtown, the Hyatt Regency Atlanta and the Marriott Atlanta Marquis.

The PEI Board of Directors will meet next month to review convention sessions proposed by the PEI Education and Convention Committee. Click to view a tentative schedule of events. More information to come as sessions and speakers are confirmed.

As of today, there are 156 PEI members exhibiting in 524 booths in the Fuel Equipment & Services area at the 2013 NACS Show. Only 59 booths remain available for purchase. Contact Bob Young to discuss exhibit opportunities at byoung@pei.org or 918-236-3966.

Early convention registrants receive significant discounts. Full Early-Bird registration is $295 for members and $495 for non-members. This includes admission to education sessions, all three days of the trade show, the PEI Industry Reception and the NACS Welcome Reception. Companies that register five or more employees are eligible for group discounts.

Be ready to register and make your hotel reservations on Monday, April 1, to enjoy the greatest savings and selection of hotel options.

BRIEFLY NOTED
Jump Oil Co. Inc., Jefferson City, Missouri, is offering to sell its chain of 47 gasoline stations and convenience stores and other assets in Missouri in accordance with the company's Chapter 11 case in the U.S. Bankruptcy Court for the Eastern District of Missouri.
The West Virginia Department of Transportation has settled allegations that it violated federal regulations for underground storage tanks. The Environmental Protection Agency says the state agency agreed to pay a $30,000 penalty and make statewide improvements to its tank monitoring procedures. The alleged violations occurred at 10 facilities operated by the Division of Highways.

U.S. OIL DEMAND REMAINS WEAK
Total U.S. petroleum deliveries in February 2013 were 4.1 percent below that of February 2012―marking the lowest level of demand for the month since 1983, the American Petroleum Institute reported March 21 in its latest Monthly Statistical Report. Averaging just under 18.0 million barrels per day in February, API reported total domestic petroleum deliveries declined 2.9 percent year-to-date.

DEATHS
John Leroy Sears, founder of United Petroleum Equipment, Inc., Battle Creek, Michigan, died March 1 after a short battle with cancer. He was 64. A master electrician, he started his own electrical contracting business, J & L Electric, in 1972. He branched out into the petroleum industry by founding United in 1985. John is survived by his wife of 44 years, Linda; a son, Greg, who serves as United Petroleum Equipment's president; and three grandchildren.

MEMBERSHIP APPLICATIONS
Georgia construction group. Blackwater Construction Group, LLC, 2200 Satellite Boulevard, Suite 805, Duluth, Georgia 30097, has applied for service and construction division membership. Imran Niazi is president of the firm, which was established in 2008. The company is a general contracting and construction management firm. Sponsored for PEI membership by Scott Jones, JonesFrank, Raleigh, NC.

ADMITTED TO PEI

Schwob Energy Services, Commercial & Industrial Fueling Division, North Kansas City, MO (dis)
INDESCO - Industrial Equipment & Supplies Co., Georgetown, Guyana (dis)
Zhengzhou Windbell Electric Co., Ltd., Zhengzhou City, Henan, China (mfr)
Oleofil Filtros Industria E Comercio De Equipamentos Industriais Ltda., Rolandia, Parana, Brazil (mfr)
Kevin Henderson Consulting LLC, Brandon, MS (aff)
VNG.co, Bala Cynwyd, PA (S&C)
JS Solutions(S) Pte. Ltd., Singapore (S&C)
MH Technical Industries, Khartoum, Sudan (S&C)

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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.