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Dear PEI Member:

A new Coordinating Research Council (CRC) study on corrosion in diesel underground storage tank (UST) systems provides some, but not all, of the answers for which the industry has been waiting.

Since 2007, owners, operators and contractors have reported accelerated corrosion-related component failures in diesel UST systems. Although inconclusive, two previous field studies theorized that water, microbial contamination, increased diesel sulfur content and the presence of ethanol were the likely causes.

The CRC study, Identification of Potential Parameters Causing Corrosion of Metallic Components in Diesel Fuel Underground Storage Tanks, is the most scientific investigation of the issue to date and was funded, in part, by PEI and other industry organizations. The research evaluated 11 variables for their direct or indirect “correlation” to diesel corrosion:

• Water
• Microbial contamination
• Sulfur concentration
• Biodiesel
• Ethanol
• Glycerin
• Cold-flow improvers
• Conductivity additives
• Corrosion inhibitors
• Lubricity additives
• Fiber-reinforced polymers

CRC Study on Diesel UST System Corrosion

PEI Names Jason Blake EVP

Biden, Automakers Set 2030 ZEV Goals

PEI Women Conference

PEI Joins Tax, Banking Sign-on Letters

E30, Anyone?

Respond to this Newsletter

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

The study concluded that of the 11 factors tested, “water was the only controlled variable that correlated unequivocally with corrosion.” Indeed, “the presence of free-water was essential to corrosion,” according to the CRC.

Findings on the other three variables identified by earlier studies — microbial contamination, sulfur concentration and ethanol — were inconclusive.

Microbial contamination. The CRC said an “unequivocal determination” of a link between microbial contamination and corrosion was thwarted by an “indigenous” (probably fuel-borne) microbial presence in its test samples. The report did, however, state that increased corrosion in the early stages of the 12-week test suggested that UST system microbes are more aggressive than microbes transported in fuel.

Sulfur content. Many experts have assumed the switch from low sulfur diesel (LSD) to ultra low sulfur diesel (ULSD) is a primary contributor to accelerated corrosion. The CRC study found no such correlation. In fact, the report notes, “By some of the statistical analyses, corrosion in ULSD microcosms was less than that in LSD ones.”

Ethanol. The study found “no consistently significant” correlation between ethanol and corrosion. Even more interesting, the report said, “Where ethanol correlated significantly with corrosion, the direction of that relationship varied depending on interactions with other controlled variables.” In other words, the presence of ethanol sometimes correlated with higher corrosion and other times with lower corrosion.

Given the many remaining questions, the CRC report recommends further study of the effect of microbial contamination, biodiesel, ethanol and water on diesel fuel system components.

For now, however, UST owners, operators and contractors should work to minimize the presence of free water in their systems. The most recent edition of RP900: Recommended Practices for the Inspection and Maintenance of UST Systems includes an appendix on Water Management in Storage Systems. The Fuels Institute’s Diesel Fuel Quality Council (PEI is an advisory member) also published a helpful report, Diesel Storage Tanks: Industry Practices to Minimize Degradation and Improve Fuel Quality earlier this year.

PEI NAMES JASON BLAKE EVP
The PEI board of directors unanimously approved Jason Blake as the association’s next executive vice president, effective Oct. 18.

Blake brings 12 years of association management experience, most recently as executive vice president and chief operating officer for the Associated Equipment Distributors Foundation and chief financial officer for Associated Equipment Distributors. He formerly served as executive vice president and chief financial officer of the Technology and Manufacturing Association. Current PEI Executive Vice President and General Counsel Rick Long will remain as general counsel and assist with the transition until his previously announced Dec. 31 retirement. Read the press release.

BIDEN, AUTOMAKERS SET 2030 ZEV SALES GOALS
President Biden signed an Aug. 5 executive order “setting a goal that 50% of all new passenger cars and light trucks sold in 2030 be zero-emission vehicles (ZEVs).” The nonbinding order encompasses battery electric, plug-in hybrid electric and hydrogen fuel cell vehicles.

On the same day, automakers Ford, GM and Stellantis issued a joint statement affirming their “shared aspiration” to achieve 40%-50% ZEV sales by 2030. The automakers noted the goal could be achieved only with purchase incentives, a comprehensive charging network, R&D investments, and incentives to expand electric vehicle (EV) manufacturing and supply chains.

PEI WOMEN CONFERENCE, SPONSORS
The 2021 PEI Women Conference will be held Aug. 30 through Sept. 1 at the Guest House at Graceland in Memphis, Tennessee. The conference program includes sessions on “powered productivity” (technology), leadership and a PEI Women panel discussion. Registration is $595 for PEI Women members and $695 for non-PEI Women members.

PEI thanks our conference sponsors for their support:

• Graffco (event sponsor)
• S. Bravo (evening reception)
• RDM Industrial Electronics Inc. (welcome station)
• United Rentals Trench Safety (key card)

Learn more and register here.

PEI JOINS TAX, BANKING SIGN-ON LETTERS
PEI recently joined other trade associations in opposing three legislative and regulatory proposals that affect our members.

• Estates and capital gains. U.S. tax law has long deferred capital gain taxes when a decedent’s assets transfer to an heir. The law also increases the heirs’ tax basis to the assets’ fair market value at the time of death. President Biden has proposed immediately taxing large bequests to heirs and calculating capital gains on the decedent’s basis, not the assets’ fair market value. PEI and our association allies believe these moves would be devastating for many family businesses. Read the letter.
• Pass-through business taxes. Section 199A of the federal tax code grants “pass-through” businesses (e.g., subchapter S corporations and limited liability companies) a 20% tax deduction for certain qualified business income. Sen. Ron Wyden (D-Oregon), chair of the Senate Finance Committee, has introduced legislation to reduce or eliminate this deduction. PEI and our allies believe the legislation would harm small- and medium-sized businesses, kill jobs and slow economic growth. Read the letter.
• Confidential banking information. The Treasury Department has proposed that financial institutions report to the IRS all account holders’ transactions above $600. Trade associations such as PEI believe the proposal would invade taxpayer privacy, subject personal data to unnecessary risks and unnecessarily complicate already burdensome banking and tax regulations. Read the letter.

E30, ANYONE?
A University of Nebraska-Lincoln study found non-flex-fuel vehicles suffer modest performance declines when fueled with E30. Findings include:

• E30 is an average 0.64 mpg less fuel efficient than E15.
• A 2.5% price break on E30 would offset the fuel efficiency losses.
• Switching 10% of the U.S. on-road fleet to E30 would reduce CO₂ emissions by 34 megatons annually.

BRIEFLY NOTED
“GM issued a second recall of the 2017-2019 Chevrolet Bolt EV due to a manufacturing defect that has caused some batteries to erupt in flames while charging, GM announced Friday. The recalls cover more than 68,000 Bolt EVs globally, and 50,925 in the U.S. Owners who had their Bolt EV repaired under the previous recall are advised to get it fixed again.” — Green Car Reports, July 23

“Minnesota has officially become the first Midwestern state to adopt California's stricter emissions standards, as well as a zero-emission vehicle (ZEV) mandate requiring the highest-volume automakers to sell electric cars. … Minnesota becomes the 15th Clean Cars state, following California’s emissions rules and creating yet another market for ‘compliance cars,’ those electric cars sold only to satisfy California-style ZEV mandates. … Adding Minnesota to the list of California ZEV states will complicate logistics for automakers, who previously had to focus only on coastal clusters of states that adopted the rules.” — Green Car Reports, July 28

“Americans have been keeping their vehicles longer, leading to an increase in the average age of light-duty vehicles on the road. From 2002 to 2020, the average age of light-duty vehicles increased by two and a half years, reaching a new high of 12.1 years.” — DOE Vehicle Technologies Office, Aug. 9 

“In a white paper issued this month, Seattle-based Coltura argues that 10% of drivers consume 32% of gasoline used in the United States … . The group says it makes sense to provide these gasoline ‘superusers’ with high incentive payments to switch to electric vehicles (EVs) instead of taking a blanket approach that awards the same level of incentive no matter how frequently a driver uses their vehicle.” — Oil Express Alert, July 27

PEI MEMBER NEWS
Emco Wheaton Retail named Matthew Granger director of engineering and IT.  Granger will spearhead new product development, provide engineering support and manage the quality control and IT departments.

Leighton O’Brien appointed Joy Milam as director of U.S. sales for the company’s wetstock SaaS business. Milam brings two decades of experience in the fuel and fleet industries, most recently as vice president, relationship management at Voyager Fleet Systems.

RDM Industrial Electronics Inc. opened a fifth branch in Irving, Texas. The full-service location will provide a parts counter and offer one-day UPS ground shipping for most of Texas, all of Oklahoma, southern Kansas, southeastern Arkansas and northern Louisiana.

SPATCO Energy Solutions acquired The Southern Co. of North Little Rock and Adams Tank & Lift. The combined companies will have more than 600 employees (including 350 technicians) and 23 offices across 10 southeastern states. Southern Co. of North Little Rock CEO Michael Shelby and Adams Tank & Lift President Andy Adams will join SPATCO’s leadership team.

Ken Urban retired after selling his company, Colorado Petroleum Rebuilders (CPR), to RDM Industrial Electronics. Urban began his petroleum equipment industry career with ESCO in 1984. He and his wife, Bethe Clark-Urban, opened CPR in 1994.

MEMBERSHIP APPLICATIONS
Maryland environmental and engineering company. Adams Environmental Engineering Group LLC, 218 Oak Lane SW, Glen Burnie, MD 21061, applied for service and construction division membership. Carianne Adams Finch is owner and principal environmental engineer for the firm, which was established in 2018. Adams Environmental Engineering Group LLC provides environmental and engineering services, including consulting, design, remediation/recovery and AST/UST contracting, Phase I/II ESAs, environmental sampling, soil/groundwater and air investigations, AST/UST removal, installation, testing and inspection. Sponsored for PEI membership by William S. Alexander, Petroleum Management Inc., Baltimore, Maryland.  www.adamsenvironmentaleng.net

Florida manufacturer. Petrobox Fuel Solutions LLC, 2571 Aragon Blvd, #219, Sunrise, FL 33322, re-applied for manufacturer division membership. German Pablo Gentile is CEO of the firm, which was established in 1993. Petrobox Fuel Solutions LLC manufactures fuel management systems and forecourt controllers, which are sold primarily through distributors. Sponsored for PEI membership by Jesus Ildemarco Cogley Quintero, Petrocsa, Código, Panama. www.petroboxinc.com

ADMITTED TO PEI

• Jeffrey Lowery, Love’s Travel Stops and Country Stores, Oklahoma City, Oklahoma (operations and engineering)
• Folsom Industrial, Salt Lake City, Utah (distributor)
• Insatesa, San Pedro Sula, Honduras (distributor)
• Romac Services Inc., Salt Lake City, Utah (service and construction)
• Equipos Y Accesorios, Managua, Nicaragua (distributor)

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.