August 16, 2018 | Vol. 68, No. 16

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Dear PEI Member:

The U.S. Environmental Protection Agency (EPA) has provided new guidance on insurance policies for underground storage tank (UST) systems. The new information will be of interest to tank owners, operators, distributors, contractors and all others involved in repair, replacement or mitigation activities performed in response to a release.

In most states, insurance plays a primary role in helping tank owners and operators meet the financial responsibility requirements in 40 CFR 280. These policies typically list various conditions under which the insurer will or will not pay a claim for cleanup or third-party damage resulting from a release. The Aug. 3 EPA memorandum addresses two situations that have raised questions in the UST community.

Voluntary Exclusions. Tank replacements may be undertaken for many reasons. For example, an owner may replace a small tank with a larger one to increase a fueling facility’s storage capacity. Or an old, but apparently still sound, tank may be replaced as part of an overall facility upgrade. These types of replacements are known as “voluntary tank removals.” Similarly, site investigations unrelated to a known environmental issue are called “voluntary tank site investigations.” For example, the purchaser of a fueling facility may require a precautionary environmental investigation as a condition of sale.

What happens if evidence of a release is discovered during one of these voluntary activities? If the owner had no prior knowledge of the release, some tank insurance policies exclude coverage for any resulting cleanup costs or third-party damages. The EPA’s memorandum makes clear that policies containing such exclusions are insufficient for owners to meet their financial responsibility requirements under 40 CFR 280: “If a tank removal or tank site investigation reveals contamination for an UST release, the UST insurance policy must not exclude insurance coverage for the cleanup of the release or any third-party damages that may result.”

Self-Insured Retentions. Tank insurance policies also sometimes include a dollar amount the owner must pay before insurance coverage kicks in. These “self-insured retention” policies require that the owner directly pay all cleanup, third-party losses, legal fees and other expenses until the self-insured limit is reached. Only then will the insurer begin to pay. This is different than a typical deductible-based policy in which the insurer will immediately begin paying the first dollar of allowed claims and then collect the insured’s deductible payment after the fact.

Tank Insurance Guidance

Operation Gratitude

New Fuel Economy Standards Proposed

RP300 Comment Period Closes Soon

Respond to this Newsletter

by e-mail to the editor, Rick Long at rlong@pei.org

or join the discussion in the Petroleum Equipment Forum

The EPA’s memorandum states that an insurance policy with self-insured retention applying only to claims made before the policy takes effect is sufficient to meet the financial responsibility requirements of 40 CFR 280. If the self-insured amount applies to claims made after the policy’s inception, the policy will not satisfy the owner’s financial responsibility obligations. In such a case, the owner must use another mechanism to prove financial responsibility for the amount of the self-insurance.

For more information on UST insurance, the EPA memorandum recommends that stakeholders consult the Association of State and Territorial Solid Waste Management Officials (ASTSWMO) Guide to Tank Insurance.

OPERATION GRATITUDE NEEDS YOUR HELP
PEI members will have a chance to give back at this year’s PEI Convention through the association’s partnership with Operation Gratitude, a non-profit that sends care packages and personal letters of appreciation to soldiers, sailors, airmen, marines and coast guardsmen deployed in harm’s way. Since its inception in 2003, Operation Gratitude has sent an average of more than 250,000 care packages per year to our nation’s heroes.

You can participate in this important effort in two ways:

First, make a tax-deductible contribution to the PEI Foundation. Every dollar you give will be used to purchase the gift items for the care packages PEI members will assemble in Las Vegas. The more you give, the more military heroes PEI will be able to assist.

Then, join your fellow PEI members in the PEI 1-on-1 area at the Convention to help assemble the kits and/or write a letter of thanks to a service person. Kit assembly times are:

Sunday, Oct. 7, 1:30 p.m. to 3:00 p.m. (PEI Women session)
Monday, Oct. 8, Noon to 4:00 p.m.
Tuesday, Oct. 9, Noon to 3:00 p.m.

We hope you will join us in giving back to those who have given so much.

NEW FUEL ECONOMY STANDARDS PROPOSED
The EPA and National Highway Transportation Safety Administration (NHTSA) announced Aug. 2 a 60-day comment period on a proposed rulemaking to adjust greenhouse gas emission targets and fuel economy standards put in place during the Obama administration.

The proposal would freeze fuel economy standards for model year 2021 through 2026 light-duty vehicles at approximately 37 mpg, the level set for the 2020 model year. Current regulations gradually increase the target to 54.5 mpg by 2026.

In announcing the proposal, EPA Acting Administrator Andrew Wheeler said, “Our proposal aims to strike the right regulatory balance based on the most recent information and create a 50-state solution that will enable more Americans to afford newer, safer vehicles that pollute less. More realistic standards can save lives while continuing to improve the environment. We value the public’s input as we engage in this process in an open, transparent manner.”

California, 18 other states and the District of Columbia immediately announced they would sue to halt the rollback.

Additional details and instructions for submitting comments are on the EPA website.

RP300 COMMENT PERIOD ENDS AUG. 20
The 30-day public comment period on PEI/RP300: Recommended Practices for Installation and Testing of Vapor Recovery Systems at Vehicle Fueling Sites closes next Monday, Aug. 20. The 54-page document was last revised and reorganized in 2009, a process that included the addition of a new chapter on decommissioning Stage II vapor recovery piping. The 2009 edition was affirmed with no changes in 2014. (See July 20, 2018 TL.)

Although the PEI Vapor Recovery Installation Committee is particularly interested in comments on decommissioning procedures, stakeholders are invited to comment on any section in the document.

To submit your suggestions for improving RP300, visit www.pei.org/rp300 and click the “Comment Now” button.

GM AND SHELL ACTIVATE IN-DASH PAYMENT
General Motors and Shell announced Aug. 16 that Shell-branded stations nationwide are now accepting payments from the in-dash GM Marketplace system available on certain Chevrolet, Buick, GMC and Cadillac vehicles. The release notes the new capability allows consumers to purchase fuel without swiping a credit card, going inside the store or using a cellphone.

"Customers using this payment option will simply make a few selections on the vehicle's touchscreen and a three-digit code will be generated that allows the user to activate a specific pump and start fueling," according to the joint release. "The amount due is then automatically charged to the customer's payment method of choice, be that credit or debit or directly to their checking account."

The nationwide rollout follows a successful pilot in select markets earlier in 2018.

FROM THE STATES
Colorado is offering incentives to encourage UST owners and operators to perform the initial testing of spill bucket and containment sumps by Dec. 31, 2018—two years before the Colorado regulatory deadline. Under the incentive program, Colorado’s Petroleum Storage Tank Fund will waive the usual $10,000 deductible for operators that discover a confirmed release during spill bucket or containment sump testing or replacement undertaken by Dec. 31. The incentive program also will apply retroactively to work completed in 2017 and 2018. Complete terms and application instructions can be found here.
Maine’s Department of Environmental Protection will hold a public hearing Aug. 21 on proposed amendments to the state’s UST regulations. Comments on the proposed amendments will be accepted through Aug. 31. More details on the proposal, the hearing and public comments may be found here.

NIKOLA PLANS 700 HYDROGEN FUELING STATIONS
Nikola Motor Co. plans to open more than 700 hydrogen fueling stations across the U.S. by 2028. The company previously announced it would have 14 stations operating by 2021. Earlier this year, Anheuser-Busch placed an order for 800 Nikola hydrogen-electric semitrucks as part of an effort to convert its entire long-haul fleet to renewable power by 2025. (See May 31, 2018 TL.)

Nikola says its zero-emission semis will be able to travel between 500 and 1,200 miles and be refueled in 20 minutes. To date, the company reports nearly $11 billion in pre-orders and more than $100 million in investor funding commitments.

PEI MEMBER NEWS
Matrix Capital Markets Group Inc. announced the sale of Champlain Oil Co. Inc. and Coco Mart Inc. to Global Partners LP. The acquired assets include 37 company-operated Jiffy Mart convenience stores with gas and 24 other fuel sites, primarily in Vermont and New Hampshire.
SignResource LLC and Royston LLC have come together under a new holding company, SRR Holdings Inc. Sign Resource and Royston will remain independently operated businesses under SRR Holdings.

BRIEFLY NOTED
“There are two trillion-dollar markets that are great new business opportunities for Amazon, according to D.A. Davidson. ... ‘Based on our estimates, Amazon is currently pursuing 8 of 10 market opportunities that exceed $1T, globally. We see an opportunity for it to exploit the remaining two—gas (stations) and travel,’ analyst Tom Forte said in a note to clients Tuesday.”—CNBC, Aug. 7, 2018
“In its first full month of availability in Canada in June, the Tesla Model 3 racked up 2,329 sales … . Ontario canceled its plug-in electric vehicle rebate program on July 11. … In July, estimates put nationwide Model 3 sales as low as 350 cars.”—Green Car Reports, Aug. 6, 2018
“The Federal Trade Commission has alerted consumers to be wary of skimming fraud as they gas up during the summer travel season. That means some motorists may be inspecting the pump and card reader before filling up and looking to see if dispensers are protected with security seals.”—Oil Express Alert, Aug. 8. 2018

MEMBERSHIP APPLICATIONS
Philippines distributor. Neo Bros Ventures Corp., 1261 Cardona St., Poblacion, Makati City, Metro Manila, Philippines, has applied for Distributor Division membership. Carter G. Yu is president of the firm, which was established in 2016. Neo Bros Ventures distributes fuel dispensers, nozzles, and fuel cleaning and polishing services. Sponsored for PEI membership by Ron Lenz, Fueltec Systems LLC, Royal Palm Beach, Florida.
www.neobros.com.ph

Wisconsin manufacturer. Baker Manufacturing Co. LLC, 133 Enterprise St., Evansville, WI 53536, has applied for Affiliate Division membership. Debbie Schilling is sales manager for the company, which was established in 1873. The company manufactures internal and external gear pumps and positive displacement pumps for the OEM and process market. Sponsored for PEI membership by Christian Smith, AXI International, Fort Myers, Florida.
www.haightpump.com

Chilean engineering firm. Innovatec-IC-SpA, Rosita Renard, 1200 V-Nunoa, Santiago, Región Metropolitana de Santiago, Chile 7790317, has applied for Affiliate Division membership. Cesar Munoz Vega is CEO of the company, which was established in 2017. Innovatec-IC-SpA specializes in the design of fueling stations. Sponsored for PEI membership by Ximena Partos, Pesamatic S. A., Recoleta, Chile.
www.innovatec-ic.cl

Louisiana environmental consultant. PPM Consultants, 1600 Lamy Lane, Monroe, LA 71201, has applied for Affiliate Division membership. Gretchen Duff is marketing coordinator for the company, which was established in 1994. PPM Consultants is an environmental and engineering consulting firm that provides services to industrial, commercial and governmental clients. Sponsored for PEI membership by Mike Perry, Perry and Sons LLC, Monroe, Louisiana.
www.ppmco.com

Texas service contractor. Automated Fuel Technologies LLC, 520 Tower St., Suite B, Garland, TX 75040, has applied for Service and Construction Division membership. Jerry Gray is general manager for the company, which was established in 2013. Automated Fuel Technologies is a commercial and industrial fuel system installation and service contractor that provides turnkey services, including general maintenance and repair. Sponsored for PEI membership by Chris Monroe, Monroe & Monroe Insurance, Arlington, Texas.
www.autofueltech.com

Colorado construction contractor. Patriot Petroleum Solutions, 3309 Yule Trail Drive, Fort Collins, CO 80524, has applied for Service and Construction Division membership. Joshua Skov is the owner of the company, which was established in 2017. Patriot Petroleum Solutions offers construction contracting services, with a focus on petroleum service facility construction, remodeling and EPA compliance. Sponsored for PEI membership by Rick Long, RDM Industrial Electronics Inc., Nebo, North Carolina.

ADMITTED TO PEI

PetroBox, Santa Cruz de la Sierra, Bolivia (manf)

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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.