April 22, 2021 | Vol. 71, No. 8

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Dear PEI Member:

The long-awaited EMV forecourt deadline is finally here. Effective April 17, U.S. fuel marketers that have not upgraded their dispensers to accept chip card payments are liable for fraudulent transactions on those dispensers.

Survey Says. This week, PEI surveyed our distributor and contractor members to gauge the current state of forecourt upgrades. Our last such survey was conducted six months ago (Oct. 2020).

More than 10% of eligible PEI members participated in this week’s survey. Cumulatively, these members manage EMV upgrades for between 27,500 and 43,000 retail fueling sites. Results show:

Site completions are slowly increasing. Some 56.2% of all retail fueling sites have completed their EMV forecourt upgrades, according to our survey. That’s up from 49.5% in October.
Many sites haven’t yet placed their orders. Another 29.3% of the sites have not yet requested forecourt upgrades. That’s a big number, but down substantially from 43.3% six months ago.
Lead times are increasing. Today’s average lead times are 11 weeks (with new dispensers) and 8 weeks (without dispensers). Last October, lead times averaged 8 weeks (with new dispensers) and 7 weeks (without dispensers).
Procrastination is the cause. Some analysts blame today’s EMV upgrade backlog on the shortage of qualified service technicians. PEI members disagree. As in October, 72% said the real cause is customers’ procrastination in placing orders.
Many sites will not upgrade. Survey participants estimated 10.3% of retail fueling sites never will upgrade. That’s down slightly from a 12.8% estimate in October.

EMV Deadline Arrives

Washington to Ban Gas Vehicles

C-Store Fuel Sales Fall

PEI Young Executives Conference

E15 News

EV Updates

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

Card Companies and Majors. Although credit card companies resisted last-minute pressure to delay the liability shift (April 6 TulsaLetter), they still could defer enforcement on a case-by-case basis for marketers that demonstrate a good-faith effort to upgrade.

Visa also announced it will automatically enroll non-upgraded fuel marketers in its Visa Transaction Advisor (VTA) program. VTA provides a heightened level of fraud protection, according to VISA:

Each time a credit or debit card is inserted at the pump, Visa analyzes more than 500 pieces of data about the cardholder's account and global fraud trends. Within milliseconds, the tool determines the risk of the transaction and provides a risk score that helps merchants identify transactions with a higher risk of fraud (so they can request additional authentication before gas is pumped). Research shows that when prompted to go inside a store to complete a transaction, most criminals will drive away instead. In other words, Visa Transaction Advisor stops criminals before they can even pick up the pump.

VTA is free to participating marketers the first year.

Major gasoline brands are using carrots and sticks to move marketers toward forecourt upgrades. For example:

Shell will charge sites that have not upgraded a $250 monthly fee beginning May 1. The fee jumps to $500 per month July 1. (Feb. 18 TulsaLetter)
ExxonMobil, on the other hand, has extended to June 30 retailer technology incentives scheduled to expire this month. (March 18 TulsaLetter) The company also announced that forecourt EMV upgrades, at least initially, will be mandatory only for its branded stations in California, Florida, New Jersey, New York and Texas.

What’s Next. Back in 2015 (the original forecourt liability shift deadline), consumers who wanted to buy fuel without cash had only one widely available option: a credit card.

In the years since, new cashless payment technologies have emerged. Contactless credit cards. App-based mobile wallets. In-vehicle payment systems. C-store loyalty card programs. And a completely frictionless Amazon-like “just drive away” experience probably isn’t far off. Each advancement will invite new types of fraud.

Today, EMV technology is the most important tool to protect against fraudulent fuel purchases.

Tomorrow, fuel marketers will be fighting a different battle.

WASHINGTON: 2030 BAN ON NEW GAS VEHICLES
Washington state legislators voted to ban sales of new gasoline vehicles, beginning with the 2030 model year. The bill exempts emergency vehicles and trucks weighing more than 10,000 pounds.

The ban, which awaits Gov. Jay Inslee’s signature, is conditioned on enactment of a vehicle miles traveled tax covering at least 75% of all vehicles registered in the state.

C-STORE FUEL SALES FALL
U.S. convenience store fuel sales declined 26.1% to $292.6 billion in 2020, according to NACS State of the Industry data.

Falling retail prices and lower volumes both contributed to the decline:

Average fuel prices dropped 16.2%, from $2.59 in 2019 to $2.17 in 2020.
Monthly fuel sales dipped 12.4% to 161,807 gallons per store.

PEI YE ‘WINTER’ CONFERENCE REGISTRATION OPENS
PEI returns to in-person events June 26-29 with the 2021 PEI Young Executives “Winter” Conference, at the Ocean Reef Club in Key Largo, Florida. Registration is now open. Reserve your spot today. Seats are limited.

E15 NEWS
“A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit at April 13 oral argument doubted the legality of the Trump EPA’s waiver allowing year-round sales of previously restricted 15-percent ethanol fuel (E15), faulting the agency’s revised interpretation of its Clean Air Act authority to justify the decision. ... And they also expressed doubts over arguments by biofuels groups contending that the Trump administration should have gone further with its May 2019 waiver and approved blends above E15 for sale year-round, rather than preventing their sales during the summertime because of concerns about air quality impacts. If the judges ultimately rule against EPA — and the Biden administration is defending the Trump-era decision — it would be a major setback for biofuels advocates … .” — Inside EPA, April 13

“The Indiana House and Senate have each passed a bill that aims to implement additional labeling requirements for fuel pumps that sell E15. Representatives of the ethanol industry are urging Indiana Gov. Eric Holcomb to veto the bill. ... SB 303 would require fuel dispensers that offer E15 to display the statement ‘Attention: E15. Check owner’s manual for compatibility and warranty requirements’ next to the fuel grade selection button, as part of, or in addition to, the label currently required by the U.S. EPA. The bill also includes provisions related to underground storage tanks and establishes new maximum vapor pressure limits for gasoline and gasoline-ethanol blends.” — Ethanol Producer Magazine, April 6

EV UPDATES
“Electric vehicle users would pay a charging-station tax and an annual registration fee in Oklahoma under a bill state lawmakers approved Thursday and will send to Republican Gov. Kevin Stitt’s desk. The 3-cent-per-kilowatt-hour station tax would start in 2024, though users wouldn’t pay for juicing vehicles at home. State residents would get a tax credit up to the amount of their vehicle registration fee, which would be $110 annually for most vehicles, dependent on vehicle weight, according to a bill summary. ... The tax and fee will generate about $750,000 in the first year, said Rep. Kyle Hilbert (R), the bill’s author.” — Bloomberg Law, April 15

“Shell plans to install 5,000 rapid electric vehicle chargers in Britain by 2025 in a bid [to] confirm a market-leading position in the transition to clean energy. Shell is also proposing an investment in on-street public charging points, building on its relationship with Ubitricity which it acquired in February. The plans form part of Shell’s low-carbon strategy unveiled in February which will see more than 30,000 Shell Recharge charge points by 2025.” ERPEC News, April 15

“CarGurus surveyed 1,097 U.S. automobile owners to gauge their views on EVs. Over half of the respondents (52%) say they expect to own an EV in the next 10 years; a figure that’s risen 34% since 2018. …But the survey revealed demand won’t translate into sales unless certain conditions exist. The top ranked condition centered on charging stations, with 65% of respondents saying they will consider an EV ‘if charging stations are available in my area.’ ... Other conditions respondents say will encourage EV adoption include ease in finding replacement parts and batteries (62%); if long-term fuel and maintenance savings outweigh the higher asking prices (56%); available tax incentives and rebates (56%); extended warranties (53%); good expected retail value (51%); cleaner battery production (48%); and ‘if electric vehicles become more mainstream.’ (46%).” — Auto Dealer Today, April 16

“The number of electrified vehicles sold in the United States during the first quarter of the year jumped by more than 80% compared to the same time in 2020, with the sale of hybrid vehicles more than doubling, according to analysis from Cox Automotive and Kelley Blue Book. ... Overall, there were 303,753 electrified vehicles sold in the U.S. during the quarter, with overall vehicle sales totaling 3,907,738. That's compared to 167,966 electrified vehicles and 3,509,299 overall vehicles sold in the first three months of 2020.” — Oil Express Alert, April 19

“Nearly 50 light-duty plug-in electric vehicle models were available in model year (MY) 2020, up from 42 in MY 2019. Plug-in electric vehicles include all-electric vehicles and plug-in hybrid electric vehicles. Over the past decade, the number of plug-in electric models available has increased from 4 in MY 2011 to 48 in MY 2020.” — DOE Vehicle Technologies Office, April 19

PEI MEMBER NEWS
Blue1 Energy Equipment added Oregon, Washington, Hawaii and Alaska to the territory covered by Wilson/Rogers & Associates. The firm also represents Blue1 in California, Arizona and Nevada.

Dover acquired Huntsville, Alabama-based AvaLAN Wireless Systems Inc., a provider of secure wireless and wired ethernet solutions, managed routers, software-as-a-service (SaaS) and cloud-based services. AvaLAN will be part of the Dover Fueling Solutions operating unit.

Fatboy Electric achieved the Diamond level in Associated Builders and Contractor’s STEP Safety Management System for the third consecutive year. Diamond is the highest level of recognition in the program, which measures 25 key safety processes and policies.

Franklin Fueling Systems acquired the product line assets of electric control product manufacturer Power Integrity Services, a move that will expand Franklin's Total System Solution.

Leighton O’Brien named Clay Moore senior director of product for its SaaS division. Moore has more than 30 years’ experience in software development, including 13 years in the downstream petroleum industry.

Tuthill appointed John Huff national sales manager for its Fort Wayne distribution sales team. Huff has more than 25 years of experience in industrial products sales.

Vapor Systems Technologies Inc. (VST) appointed R-J Sales & Associates Inc. as its manufacturer representative in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee.

Wildco PES recently opened a branch office in Norcross, Georgia. Key personnel include: Dave Brown, operations manager; Frank Carson, service director; and Mike Lynch, regional sales representative.

MEMBERSHIP APPLICATIONS
Mexican manufacturer representative. Grupo Volgas, Calle Nuevo León 963 Plan Ayala, Tuxtla Gutiérrez, Mexico 29020 applied for affiliate division membership. José Luis Mijangos Guzmán is director for the company, which was established in 2007. Grupo Volgas is a manufacturer representative for the petroleum equipment industry. Sponsored for PEI membership by Pablo C. Gualdi, ATIO Group, Mexico City, Mexico. www.volgas.com.mx

Montana service company. Advanced Environmental Technology, P.O. Box 1630, Missoula, MT 59806, applied for service and construction division membership. Keith Broere is the owner and director of operations for the firm, which was established in 1992. Advanced Environmental Technology supports fuel tank installations and removals with field analytical and tank cleaning services. Sponsored for PEI membership by Jozef Crumley, Keneco Petroleum Equipment, Great Falls, Montana.

Colorado advisory firm. Capstone Headwaters, 1225 17th St., Denver, CO 80202, applied for affiliate division membership. Ted Kinsman is managing director for the company, which was established in 2001. Capstone Headwaters advises and consults petroleum equipment industry clients seeking capital for growth and liquidity. Sponsored for PEI membership by Bobby Stenstrom, Stenstrom Petroleum Service Group, Rockford, Illinois. www.capstoneheadwaters.com

Massachusetts manufacturer. Hydro Quip Inc., 108 Pond St., Seekonk, MA 02771, applied for manufacturer division membership. Louis Silvio is president of the firm, which was established in 1996. Hydro Quip Inc. designs and manufactures custom environmental water treatment equipment, which is sold primarily through distributors. Sponsored for PEI membership by Jeannette Csiky, Stanwade Metal Products Inc., Hartford, Ohio. www.hydroquipinc.com

ADMITTED TO PEI

Lisa Childers, Quarles Inc., Fredericksburg, Virginia (operations and engineering)
Terra Vitae Environmental Solutions LLC, Trafalger, Indiana (affiliate)

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The TulsaLetter 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.