December 15, 2017 | Vol. 67, No. 24

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Dear PEI Member:

Under the Renewable Fuel Standard (RFS) program, created by the Energy Policy Act of 2005, the U.S. Environmental Protection Agency (EPA) must set renewable volume obligations (RVOs) each year. On Nov. 30, the EPA released its final 2018 RVOs for all renewable fuels, as well as the 2019 standards for biomass-based diesel.

Before issuing the final rule, the EPA reviewed more than 235,000 comments on proposed 2018-2019 volume requirements it had published in July. Some commenters requested higher renewable fuel volumes, some requested lower volumes and some sought wholesale changes to the RFS itself. The final volume requirements reflect modest changes to the initial EPA proposals.

Cumulatively, the 2018 RVOs result in a renewable fuel-to-gasoline ratio of 10.67 percent. The American Petroleum Institute (API) had urged the EPA to keep the ratio at or under 9.7 percent to allow the greater sale of pure gasoline (E0).

2018 RFS Volume Requirements

EV Tax Credit Survives

YE Conference Early Bird Rates Expire Soon

PEI Foundation Scholarship Applications

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The biodiesel industry expressed disappointment with the final RVO numbers, particularly the EPA’s failure to increase the 2019 biodiesel volume above the 2.1 billion gallons set for 2018. The National Biodiesel Board had pushed for increasing the 2019 biodiesel volume to 2.5 billion gallons.

Ethanol advocates such as the Renewable Fuels Association (RFA) are generally heartened by the 2018 RVOs. RFA President and CEO Bob Dinneen said, “Maintaining the 15 billion-gallon conventional biofuel requirement will accelerate investments in the infrastructure necessary to distribute mid-level ethanol blends like E15 and E30, and flex fuels like E85.”

For PEI distributors, the question is how great that acceleration will be. Our guess is that individual fuel marketers will make their fuel offering decisions mostly on other factors, including the competitive environment in their local market, the availability of infrastructure grants and whether E15 equipment upgrades can be combined with other capital investments.

MEXICO MARKET DEVELOPMENTS
On Jan. 1, 2016, Mexico ended Pemex’s 75-year monopoly of the Mexican retail fueling market. Two years later, the effects of that reform continue to build. BP recently opened its 100th Mexican retail location, and at about the same time, Shell and ExxonMobil entered the market with their first retail facilities.

To reduce the risk of fuel shortages and market disruptions, Mexico’s energy ministry also announced a new motor fuel strategic reserve policy. Beginning in 2020, suppliers that sell fuel to retailers must maintain an inventory of at least five days’ average sales. In 2025, the inventory reserve requirements increase to 10 to 13 days of inventory, depending on volume.

ELECTRIC VEHICLE TAX CREDIT SURVIVES
As previously reported in the TulsaLetter, the tax reform bills passed by the U.S. Senate and House of Representatives took different stances on the $7,500 electric vehicle (EV) tax credit currently offered to EV purchasers. (See Nov. 14, 2017 TL.) The House bill eliminated the credit, and the Senate bill preserved it.

The final tax reform package announced Dec. 13 by the joint House-Senate conference committee charged with reconciling the two bills sided with the Senate. So, the EV credit will continue if, as Republicans predict, that bill is passed and signed into law next week.

EARLY BIRD RATES FOR 2018 YE CONFERENCE END TODAY
Early bird registration for the 2018 PEI Young Executives Winter Conference closes today. The conference, Feb. 7-9, 2018, at the Hermitage in Nashville, Tennessee, is open to PEI member company employees aged 21-45.

The conference keynote speaker is Garrison Wynn, author of The Real Truth About Success: What the Top 1% Do Differently, Why They Won't Tell You, and How You Can Do It Anyway! A panel of five industry experts also will discuss “What I Would Tell My Younger Self.”

Early bird registration saves $100 off the regular conference fee ($595 for Young Executive members; $695 for non-members). To learn more and register, click here.

CHARLES D. KEMP SCHOLARSHIP APPLICATIONS AVAILABLE
The PEI Foundation awards $1,000 Charles D. Kemp Scholarships annually to deserving dependents of PEI member company employees.

Scholarship applications for the 2018-2019 academic year are now being accepted. To be eligible, an applicant must be a dependent of a full-time employee of a member company in PEI’s manufacturer, distributor, service and construction, or affiliate divisions. The applicant also must plan to enroll as a full-time freshman for the 2018-2019 academic year at an accredited four-year college or university. Recipients are selected based on academic achievement, leadership, character, need, and the applicant’s intent to contribute to the future of the fuel and fluid handling equipment industry.

For more information and to download the scholarship guidelines and application form, visit www.pei.org/foundation. The deadline for submitting applications is March 31, 2018.

APPOINTMENTS AND TRANSITIONS
Caliber Professional Sales Services added Lesley Bolcato to its sales team. Bolcato will be responsible for sales in Austin, San Antonio and nearby areas of Texas.
D&H United Fueling Solutions announced three appointments: Gary Baker, Houston branch manager; Cliff Mudd, Houston service manager; and Amy White, Houston office coordinator.
Husky Corp. named Grenny Sutcliffe vice president of sales. Sutcliffe will oversee Husky’s sales team and distributor network globally for all company brands, including its complete line of fuel nozzles and related equipment.
Carletta Denison retired as membership director of the Petroleum Equipment Institute (PEI) after nearly 42 years of service to the association and the industry. The entire PEI staff thanks Carletta for her always sunny disposition and her tireless devotion to our members. You may send your own good wishes and thanks to Carletta at ckldenison@gmail.com. Teresa Farmer, who has been with the PEI staff for six years, has been promoted to manager of membership services. For any membership questions or needs, you may reach Teresa at 918-236-3969 or tfarmer@pei.org.

PEI MEMBER NEWS
Dover Fueling Solutions opened a 90,000 square-foot manufacturing facility in Navi Mumbai, India. The facility has the capacity to produce 20,000 fuel dispensers per year.
Petroleum Solutions Inc. (PSI) announced an agreement with ChargePoint, the world’s leading electric vehicle (EV) charging network, under which PSI will introduce EV charging to retail, private and municipal fueling facilities. The company’s electrical services, lighting solutions, fuel generator services and EV charging stations will be offered under the “PSI Energy Solutions” banner.
Tanknology Inc. signed a new international licensee in Honduras. Based in San Pedro Sula, SERTESA (Servicios Técnicos S.A.) will provide underground storage tank (UST) and line tightness testing using Tanknology’s proprietary technologies.

DEATHS
Robert Chmarney, former president and vice president of Corey Construction Co. (Corey, Inc.) died Nov. 2. Chmarney was a licensed Pennsylvania tank installer and master electrician. Survivors include his wife, Marie; stepson, William Douglass; two grandsons, Bailey and Tyler; sister, Audrey Waxmonsky; brother, David and his wife, Chris; nieces, Jeanette, Krista and Nicole; and nephews, Joseph and Michael.

BRIEFLY NOTED
“The Atlanta City Council recently passed ordinance 17-0-1654, which will require all new residential homes and public parking facilities to accommodate electric vehicles. The ordinance requires 20 percent of the spaces in all new commercial and multifamily parking structures be EV ready. It also requires that all new development of residential homes be equipped with the infrastructure needed to install EV charging stations, such as conduit, wiring and electrical capacity.”—Atlanta Journal Constitution, Nov. 30, 2017
“The Bureau of Labor Statistics reported that manufacturers added 31,000 workers in November, extending the gain of 23,000 in October. More importantly, the sector has added an average of 15,545 employees on net per month so far in 2017 — quite a turnaround from the loss of 16,000 workers in 2016 as a whole.”—Monday Economic Forecast, Dec. 11, 2017
“Motorists will fork over more than $75 billion in gasoline taxes this year, an all-time record high, as governments continue to claim shortages of road funding. Weight national average tax: 54 cents gal.”—Lundberg Letter, Nov. 15, 2017

MEMBERSHIP APPLICATIONS
Peru software provider. Open Comb Systems E.I.R.L., Calle Las Dalias 1414 Pi. 2, Urb. AVEP, Lima 15083, Peru, has applied for affiliate division membership. Alvaro Aguayo is operations manager for the firm, which was established in 2007. The company develops point-of-sale and forecourt software and an electronic billing system. Sponsored for PEI membership by Keith Moye, OPW-FC, West Chester, Ohio.
www.ocs.pe
Egypt import and export company. Egyptian Company for Import & Export, 7 Ali Hassan St., Maamal El Alban, Cairo 7, Egypt, has applied for affiliate division membership. Maged Ghattas is the general manager of the firm, which was established in 2005. The company specializes in importing petroleum devices and equipment for fueling stations. Sponsored for PEI membership by Marcelo Caio Z. Fernandez, Zeppini, Sao Paulo, Brazil.
www.egyptionco.com
California service and environmental company. California Hazardous Services, Inc., 1431 E. Saint Andrew Place, Santa Ana, CA 92705, has applied for service and construction division membership. Belinda Bain is president of the firm, which was established in 1978. The company specializes in fuel system compliance, testing, maintenance, repairs and fuel filtering/tank cleaning. Sponsored for PEI membership by B. A. Scowley, ShldsHarpr, Pleasanton, California.
www.calhaz.com
Mexico installation company. Electromecanica Hernandez S De RL De CV, Calle Parque Nacional Copala 114, Parques del Sur, 37536, Mexico, has applied for service and construction division membership. Ruben Hernandez Gonzalez is the sales manager of the firm, which was established in 2015. Electronmecanica Hernandez is an installation company. Sponsored for PEI membership by David Fiala, FMGLLC, Maitland, Florida.
Florida installation company. Petro Flow, Inc., P.O. Box 8010, Southport, FL 32409, has applied for service and construction division membership. Dwain Sapp is president of the firm, which was established in 2006. The company offers installation and servicing of gas station equipment, tanks and point-of-sale equipment. Sponsored for PEI membership by Kevin R. McKinney, McKinney, Mobile, Alabama.
www.petroflowinc.com

ADMITTED TO PEI

Chia-Ma Car Wash Systems, Taibao City, Chaiyi County, Taiwan (aff)
Alaniz Associates Corp., Covina, California (S&C)
Service Bay Solutions, Knoxville, Tennessee (S&C)

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The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Richard C. Long, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.