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Dear PEI Member:
“It won’t be easy. But now is the time to start the VMT [vehicle miles traveled tax] discussion.”
So said a Feb. 5 TulsaLetter article on the Biden administration’s funding options for the nation’s rapidly deteriorating highways.
U.S. Transportation Secretary Pete Buttigieg seemed to quash the idea when he said March 29 that a mileage tax “is not part of the conversation.” In case there was any doubt, Buttigieg added, “I just want to make sure that’s really clear.”
Nevertheless, the White House-backed, bipartisan $1.2 trillion infrastructure bill passed Aug. 10 by the U.S. Senate includes a five-year $125 million VMT pilot program. Some $50 million of the total would go toward a national VMT test, with the remaining $75 million disbursed through grants for state, local and regional programs.
The legislation further directs the Transportation Department to conduct public education and outreach to raise awareness of the need for alternative transportation revenue mechanisms. It creates an interest group-heavy advisory board to oversee the program. And it directs the Treasury and Transportation departments to make recommendations within three years for the structure, scope and methodology of any national VMT program.
Why did the administration change course so quickly? Because it’s clearer than ever that the federal motor fuel tax (18.4 cents per gallon for gasoline and 24.4 cents for diesel) can’t be counted on to pay for the nation’s transportation infrastructure.
Motor fuel taxes are not adjusted for inflation and haven’t been increased since 1993. Tax receipts haven’t fully funded the nation’s Highway Trust Fund since 2008. And things are only going to get worse. The American Society of Civil Engineers estimates a $2.6 trillion highway infrastructure gap over the next 10 years.
Three realities show why the funding gap will continue to grow.
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National VMT Test Moves Forward
PEI Convention Registration, Requests, Updates
FTC Tightens C-Store Merger Oversight
EPA Wildfire Guide
Diesel Fuel Contamination Resource
Respond to this Newsletter
by e-mail to the editor, Rick Long at rlong@pei.org
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- Vehicle fuel efficiency is rising. Five years ago, only three light-duty, gasoline-powered vehicles achieved a U.S. Environmental Protection Agency (EPA) rating of 50 mpg or more. For the 2020 model year, 11 vehicles hit the 50 mpg mark. Federal Corporate Average Fuel Economy (CAFE) standards will continue to push vehicle efficiency higher.
- Miles traveled are decreasing. The COVID-19 pandemic caused a dramatic drop in U.S. vehicle miles traveled. At the lowest point (April 2020), vehicle miles traveled fell 40% from the previous year. Road use has picked up since then, but monthly mileage remains roughly 10% below previous levels.
- Electric vehicle sales are increasing. Battery-powered electric vehicle (EV) sales rose nearly 3% in 2020. That may not seem like much, but gasoline-powered vehicle sales fell 20% during the same period. Although EVs are still a tiny 1.7% of all light-duty vehicle sales, President Biden wants half of all new cars to be electric by 2030, and the White House is doing what it can to reach that goal. Those EVs won’t contribute anything to a liquid fuel tax-funded Highway Trust Fund.
Baby Steps
As federal budgets go, $125 million isn’t much money, and a pilot program is a far cry from a nationwide VMT rollout. But the state, local and regional experiments funded by the Senate plan could spawn creative approaches to the biggest mileage-based tax issues:
- Equity. Not all miles are created equal. Should road-damaging, heavy-duty vehicles pay a higher VMT tax than lightweight, light-duty vehicles? Should there be VMT surcharges during high-traffic times or on congested roadways? And what about lower-income rural drivers who drive lots of miles? Is it fair to make them pay more than higher-income urbanites who drive less?
- Tax collection and administration. A VMT tax would be more complicated than today’s pay-at-the-pump motor fuel taxes. How would mileage-based taxes be calculated and collected?
- On-board vehicle devices that track and transmit mileage to some federal agency?
- Monthly, quarterly or annual odometer readings submitted by vehicle owners?
- Would EPA average fuel economy estimates affect each vehicle’s tax rate?
- Privacy. Less than 1 in 4 U.S. taxpayers trust Washington to do the right thing at least “most of the time,” according to a May 17 Pew Research Center study. The millions of taxpayers who don’t trust government bureaucrats likely will resist handing over data on where, when and how much they drive.
- EV owner resistance. EV owners have grown accustomed to “free” or almost-free charging, without any responsibility for road-use taxes. How can they be convinced to pay their share of highway maintenance costs?
As the debates in Washington continue, my guess is that some sort of VMT pilot will be signed into law. And, once in place, new federal programs tend to grow more often than they disappear. So, the U.S. might soon have a new — or additional — funding mechanism for the Highway Trust Fund.
PEI CONVENTION REGISTRATION, REQUESTS, UPDATES
Just 26 days remain until the biggest industry event of the year, the 2021 PEI Convention at the NACS Show (Oct. 5-8 in Chicago). Here’s the latest:
- Advance registration discounts. There’s still time to save $150 on your convention registration. After Sept. 24, the $445 registration rate increases to $595.
- Business conditions survey. Official representatives for PEI member companies in the Distributor, Service & Construction and Manufacturer divisions will receive a short survey on business conditions tomorrow, Sept. 9. PEI Executive Vice President Rick Long will share survey findings during his final State of the Industry address at the Oct. 7 membership meeting. PEI encourages all eligible members to participate in this confidential survey.
- Find Red volunteers. Through the “Find Red” program, PEI volunteers greet attendees, provide general information and direct traffic inside the convention center. Each volunteer earns two PEI Priority Points for his or her member company. Sign up by Sept. 10, and your company’s participation will be recognized in convention signage. Learn more about Find Red here. Select when and where you would like to volunteer here.
- New education session. Registered PEI attendees can participate in all PEI and NACS education sessions. Just announced on the NACS side: “How to Maximize Fuel Equipment Uptime,” at 1:15 p.m., Oct. 5. Scott Boorse, PEI’s director of technical programs and industry affairs, will join panelists from the American Petroleum Institute, Pilot Travel Centers and the Fuels Institute to discuss the primary UST system threats and how to minimize fuel contamination risks. Learn more.
FTC TIGHTENS C-STORE MERGER OVERSIGHT
The Federal Trade Commission (FTC) will strengthen its scrutiny of convenience store mergers and acquisitions. An Aug. 25 FTC letter to the White House National Economic Council outlined steps the agency will take to uncover anti-competitive and anti-consumer practices, including:
- Requiring prior approval of proposed deals.
- Developing “additional legal theories” for challenging major players that are acquiring family-run businesses.
- Studying whether current FTC divestiture policies are indirectly “encouraging further consolidation or enabling dominant firms to exercise market power.”
- Reviewing franchise agreements to make sure franchisees are not being forced to overprice gasoline.
EPA RELEASES WILDFIRE GUIDE
The U.S. Environmental Protection Agency (EPA) today released Wildfire Guide: Preparation And Recovery For Underground And Aboveground Storage Tank Systems. EPA developed the free, 29-page guide in collaboration with a working group of wildfire prevention and recovery experts. Contents include readiness and recovery suggestions, case studies of UST systems damaged by wildfires, financial assistance options for owners and operators, and more.
DIESEL FUEL CONTAMINATION RESOURCE
The Fuels Institute’s Diesel Fuel Quality Council (DFQC) recently published a free report on protecting diesel fuel during loading and unloading. Diesel Fuel Loading and Delivery: Industry Practices to Minimize Degradation and Improve Fuel Quality will help fuel transporters, retailers, commercial storage facilities, and contractors reduce fuel contamination and guard against costly equipment failures.
PEI is an active member of the Diesel Fuel Quality Council and helped develop the document.
BRIEFLY NOTED
“Hyundai Motor Group is backing hydrogen as a top energy solution for sustainability. With its new fuel cell system … the South Korean automaker said it will provide hydrogen fuel cell versions for all its commercial vehicles by 2028. … Saehoon Kim, executive vice president and head of the fuel cell center at Hyundai Motor Group, said Hyundai’s goal is to also achieve cost competitiveness comparable to that of EV batteries by 2030. … Hyundai boasts a fuel-cell SUV, the NEXO, with plans to introduce the next model in 2023, alongside a hydrogen-powered multi-purpose vehicle model.” — Techcrunch, Sept. 7
“The world officially said goodbye to leaded petrol in July, when service stations in Algeria stopped offering it to drivers. Vehicles have been running on leaded fuel since 1922, when the compound tetraethyllead was added to gasoline to boost engine performance. By the 1970s, almost all petrol produced worldwide contained lead … . … Most high-income nations had prohibited leaded petrol use by the 1980s, but almost all low and middle-income countries were still using it as late as 2002. ”— UN News, Aug. 30
“Shell and Ubitricity earlier this week announced plans to install 50,000 on-street EV charging stations in the United Kingdom by the end of 2025, greatly improving access to charging for drivers in urban areas. Shell-owned Ubitricity has designed charging hardware that can fit into streetlight posts, providing charging access to street-parked cars without taking up an additional space. Metering is built into the lamp posts, and Ubitricity can bill users via an app. … More than 60% of households in English cities and urban areas don't have access to off-street parking, Shell said, making home charging virtually impossible.” — Green Car Reports, Sept. 7
“Valero will invest $40 million over the next five years to launch and support mobile payment, with the ValeroPay+ app's rollout scheduled Sept. 1, the major told branded wholesalers in a presentation. … In addition to ValuePay, the ValeroPay+ app also will accept PayPal, Venmo, Apple Pay, Google Pay, card on file (in which customers load various credit cards onto the app), and the Valero proprietary credit card.” — Oil Express Alert, Aug. 25
“The California Air Resources Board (CARB) and the California Energy Commission (CEC) are paying most of the $27 million cost of the Joint Electric Truck Scaling Initiative (JETSI). …[It] the largest commercial deployment of battery-electric trucks to date. The money for 100 electric trucks — 80 Freightliner eCascadias and 20 Volvo VNR Electrics — comes from CARB’s California Climate Investments Initiative and the CEC’s Clean Transportation Program.” — Yahoo Finance, Aug. 31
DEATHS
Grenville “Grenny” Sutcliffe II, 43, died Sept. 7 as the result of an ATV accident hear his home in Villa Ridge, Missouri. He was vice president of sales for Husky Corp. and the son of Husky President Grenville Sutcliffe and Mrs. Dianne Sutcliffe. Grenny joined Husky in 2004, working in the company’s sales organizations for the northeast U.S. and Canada. He subsequently became western regional sales manager and eastern regional sales manager before being promoted to vice president of sales in December 2017. Information about services will be announced by Husky when available.
—Editor’s Note: The Sutcliffes have been an important part of PEI for decades, and many of our current staff members knew Grenny personally. We grieve this untimely loss and offer our heartfelt sympathies and prayers to the family and all our friends at Husky.
Paul Lamoureux, 92, died Aug. 30 in Greensboro, North Carolina. Lamourex worked for Gilbarco from 1965 to 1995, including many years as the company’s advertising and public relations manager. Survivors include daughter Susan E. Lamoureux; grandchildren Travis R. Hansen and Chelsea R. Hansen; and brother Dennis E. Lamoureux (Nancy).
Richard “Dick” Owens, 75, died Aug. 4. Owens cofounded ESCO Services/Manufacturing with Tom Katich in 1979. The company initially focused on the auto industry, but transitioned into the petroleum industry shortly after its launch.
PEI MEMBER NEWS
Freedom Electronics named Rebecca Keith marketing manager. Keith has a 23-year marketing career, most recently as marketing director at Atlanta-based Maytronics.
Leighton O’Brien appointed Morgan Hurwitz to the company’s board of directors. Hurwitz brings more than 25 years’ experience in building global teams and technology solutions in various industries. Past positions include chief information officer for Linfox, a Melbourne, Australia-based logistics company.
MEMBERSHIP APPLICATIONS
Pennsylvania manufacturer. Petropro, 290 Bilmar Drive, Pittsburgh, PA 15205, applied for manufacturer division membership. Melanie Widmann handles marketing for the company, which was established in 2017. Petropro manufactures covers to reduce water infiltration into sumps. The products are sold primarily through distributors. Sponsored for PEI membership by Shelly Dutkiewicz, Petrosoft Inc., Pittsburgh, Pennsylvania. www.petroproinc.com
Costa Rica distributor. Repgas Costa Rica, San Jose, Guayabo, Mora San José 10702, Costa Rica, applied for distributor division membership. Miguel Loria Mora is general director of the company, which was established in February 2020. Repgas Costa Rica is a distributor of worldwide petroleum equipment brands. Sponsored for PEI membership by Kelly Mulligan, Morrison Bros. Co., Dubuque, Iowa.
Florida service provider. JL Industrial Coatings LLC, 3500 Crystal St., Gotha, FL 34734, applied for service and construction division membership. Justin Layton owns the company, which was established in 2020. JL Industrial Coatings provides industrial coatings for fuel containment systems and fuel storage tanks. Sponsored for PEI membership by Kimberly Wood Savoy, Don Wood Inc., Orlando, Florida. www.jl-industrialcoatings.com
ADMITTED TO PEI
- Lee Bridgeford, JLL, Winterset, Iowa (operations and engineering)
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