June 20, 2001

Dear PEI Member:

The United States Environmental Protection Agency (EPA) has clarified several issues relating to Stage II vapor control equipment. The Agency offered its explanation in a letter to the Northeast States for Coordinated Air Use Management (NESCAUM), a coalition of state air agencies that posed questions to EPA earlier this year on behalf of its members in the Northeast. While EPA’s response was written specifically to NESCAUM and its members, EPA officials indicated their response was applicable to other states as well. If you supply, install or service vapor recovery equipment in the 27 or so states where vapor recovery is required under the Clean Air Act, EPA’s explanation is important to you and your customers.

All states, except Missouri, have required that station owners use Stage II vapor recovery equipment certified by the California Air Resources Board (CARB). To meet its air quality needs and to satisfy a court order, CARB recently adopted significant modifications to its gasoline vapor recovery program, known as Enhanced Vapor Recovery (EVR). As a result of this change in California law, Stage II systems certified under the previous (April 1996) certification procedures will eventually be decertified and phased-out over time. Furthermore, upon adoption of the new certification procedures, CARB does not plan to provide in-use compliance support activities for systems certified under the previous procedures. NESCAUM wrote EPA in February, asserting that states should have the option of maintaining their existing Stage II programs, and asked EPA to allow them to do that.

EPA agreed that the Northeast states should "have the discretion to continue to allow use of their current Stage II systems certified under California Air Resources Board (CARB) certification procedures effective on or before March 31, 2001 which are approved in their current State Implementation Plans (SIPs), provided these controls otherwise satisfy EPA’s technical and enforcement guidance for Stage II SIPs." In other words, states will have the option of using the existing Stage II equipment, the Enhanced Vapor Recovery equipment, or a combination of the two. Factors states should consider when making the decision, according to EPA, could be the "size of a facility, availability of equipment certification information, the level of inspector knowledge and training, and the air quality status of the area." This guidance would apply to retrofitting existing stations and new stations built after the EVR regulations go into effect.

EPA also recognized that the effectiveness of Stage II controls will ultimately be supplanted in later years when complete implementation of EPA’s on-board control requirements takes effect. With this in mind, EPA concluded: "Thus, we believe that it would not be appropriate, nor an efficient use of resources, to direct you to make, at this late date, major changes to your Stage II requirements in ozone SIPs to reflect potential future changes to CARB’s test and certification programs, where existing SIPs meet the Stage II enforcement and technical guidance EPA previously issued and upon which states relied."

EPA’s action seems to put the decision about what vapor recovery systems will be used back in the hands of the states. The first indication about which option the states may follow came from NESCAUM at a meeting attended by PEI earlier this month in New Hampshire. It was there that NESCAUM directors explained their proposal to change their states’ (CT, ME, MA, NH, NJ, NY, RI, VT) Stage I/II programs. These changes include:

• Require the installation of swivel adapters on fill pipes.
• Improve the spill containment boxes. At stations where this will require groundbreaking, stations will be allowed to wait until other digging activities occur.
• Require pressure/vacuum caps at all gas stations.
• Address ORVR compatibility for all vacuum assist Stage II systems. Adoption of ORVR compatibility components could be adopted by requiring the installation of retrofit kits developed as a result of California’s EVR program.

• The dripless nozzle would not be mandated. If such nozzles were developed however, NESCAUM directors believe "widespread use of this equipment should become standard practice."

Acceptable vapor recovery systems under the NESCAUM strategy would include either existing CARB certifiable systems or new EVR systems. The cost would run from $3,000 to $7,000 per station with implementation to occur between 2003 and 2005.

We aren’t certain at this time if air quality control administrators in the other states will choose to maintain their existing Stage I/II programs, implement portions of California’s EVR program, or adopt the entire California EVR program. Our sense is that they will pick and choose aspects of the California EVR program to incorporate into their regulations, but stop short of adopting California EVR in toto. PEI is in the process of conducting a state-by-state survey to determine what aspects of each state’s vapor recovery program will change. That information will be announced in a future newsletter and made available on PEI’s website after it is collected and compiled this summer.

California. The State Water Resources Control Board (SWRCB) regulates the design, certification and testing of field-installed cathodic protection systems. In addition, state regulations require cathodic protection systems be installed by a contractor licensed by the Contractors State Licensing Board. The SWRCB has issued a letter that describes who qualifies to do this work. Fax PEI for "LG 145-2: Clarification of Corrosion Specialist and Cathodic Protection Specialist."

New York. The Empire State Petroleum Association (ESPA) will support a retail divorcement bill pending in the state legislature. Michael Truzno, CEO of ESPA, says the mega-mergers have changed the landscape in New York and that independent marketers and dealers are at risk.

Pennsylvania. EPA has approved revisions to the commonwealth’s State Implementation Plan which were submitted by the Pennsylvania Department of Environmental Protection March 6, 2000. These revisions modify and clarify the existing regulatory requirements for the control of volatile organic compounds (VOCs) from gasoline dispensing facilities in the Pittsburgh-Beaver Valley ozone nonattainment area. One revision provides that Stage II vapor recovery systems will not be required if the onboard canister refueling emissions control program is fully implemented by 2010. Fax your request to PEI for a copy of "66 FR 27875-6."

Petroleum Partners, Inc. (PPI), Cleveland, Ohio, has acquired the assets of Ten Hoeve Bros. from RNG Group, headquartered in Toronto, Ontario.

PPI’s press release explains that PPI was "recently formed for the purpose of creating, through a series of carefully planned acquisitions, an enterprise capable of providing a broad array of management services to the downstream petroleum industry." John R. Miller, PPI’s president and chief executive officer, said that PPI is "currently in discussions to acquire other companies whose operations will complement those of Ten Hoeve."

SPX Corporation acquired United Dominion Industries, parent company of Red Jacket/Marley Pump, effective May 24. SPX Corporation, headquartered in Muskegon, Michigan, is a global provider of technical products and systems, industrial products and services, flow technology and service solutions.

Gores Technology Group, a Los Angeles, California-based privately held international acquisition and management company, announced May 10 that it has signed a definitive agreement to acquire VeriFone from Hewlett-Packard Company for an undisclosed amount of cash.

Convenience USA, a leading consolidator of convenience stores in the Southeastern region of the United States, filed for Chapter 11 bankruptcy protection May 21. The company owns and operates 251 stores under the names Holiday Market, Kwik Shop, Nugget Store, McCracken Express, Tee Pee, Winoco, Gant and Sun Mart in Alabama, Florida, Georgia and North Carolina. Gasoline is offered at 250 of its 251 locations.

"BP says it will invest $100 million over the next three years to open ground-up and re-imaged C-stores matching its new Connect design in the greater Atlanta market."--Oil Express, May 28, 2001.

United Refining has acquired 68 convenience stores in New York, Pennsylvania and Ohio from Country Fair, Erie, Pennsylvania. United Refining currently operates a 65,000 barrel per day refinery and owns 350 KwikFill gasoline stations in New York, Pennsylvania and Ohio.

Sunoco, Inc., Philadelphia, Pennsylvania, has agreed to purchase 65 Coastal Mart direct retail sites and assume supply contracts with 24 Coastal distributors that supply an additional 163 sites in the Southeast. Most of the stations are located in Florida with the largest concentration of the remaining sites in Virginia and Tennessee.

Chiles Oil Inc., Pulaski, Tennessee, has been sold to BSR Petroleum Distributors, also headquartered in Tennessee.

The Occupational Safety and Health Administration (OSHA) plans to issue proposed rules next year regarding confined spaces in the construction industry, according to the department’s semiannual regulatory agenda published May 14.

According to a recently released report from the Department of Transportation (DOT), new cars purchased in the model year 2001 have an average fuel economy of about 24.5 miles per gallon (mpg), the poorest gas mileage since 1980. The drop reflects an increase in sales of light trucks, including vans, pickup trucks, and sport utility vehicles, which account for almost half of the nation’s total vehicle sales.

Marand Sales & Service, Houston, Texas, has appointed Luke Clements sales manager responsible for sales of petroleum marketing equipment in Houston and southeast Texas.

DurEquip, Inc., Minneapolis, Minnesota, has appointed Brad Minor as a regional salesman responsible for the territory encompassing the states of Arkansas, Hawaii, Indiana, Maine, Mississippi, New Hampshire, New York, Ohio, Texas and Wisconsin.

Mike Long & Associates, Inc., Mooresville, North Carolina, has appointed Doug Hatfield to the position of territory manager. He will cover Georgia and Tennessee for the company.

Syn-Tech Systems, Inc., Tallahassee, Florida, has appointed Wade Crabel as Atlantic regional manager. He will be responsible for FUELMASTER Fuel Management Systems sales in New Jersey, Maryland, Virginia, North Carolina, South Carolina and eastern Pennsylvania. Phone: (919) 833-3881. Fax: (919) 838-0597. The company has promoted Andy Olive from southeastern regional manager to national manager of commercial sales. Telephone: (800) 888-9136 ext.346. Fax: (850) 668-5050.

Guardian Fueling Technologies, Jacksonville, Florida, has announced that John Capobianco has recently joined the firm as branch manager of the company’s Hialeah (Miami) operation. Tom Bendle is president/CEO of Guardian; Joey Batchelor is vice president of operations.

Don Cook, vice president and co-owner of PIPECO, INC., Bettendorf Iowa, retired May 1. He co-founded PIPECO in 1995 after working for Seneca Companies, Petroleum Equipment & Service Inc., and Marathon Oil. He plans to remain in Pleasant Valley, Iowa.

New York distributor. Lancaster Tanks and Steel Products, 11 Saint Joseph Street, Lancaster, New York 14086, has applied for distributor division membership. Mark Stutzman is sales manager for the firm, which was established in 1945. Lancaster Tanks and Steel Products represents APT, Catlow, Cim-Tek, EBW, FEPetro, Gasboy, Krueger, Moormann, Morrison, Nordic, Pneumrcatr, Reelcraft and Riverside. The company also manufactures steel tanks. Nominated for PEI membership by Joseph B. Huber, GnrlEqpNY, Amherst, NY; J. L. Hansen, HansenAscs, Schenectady, NY; and Lenny Cutugno, TenHoeve, Carlstadt, NJ.

Texas installation and service company. R & R Petro Services, Inc., 5729 Leopard #3, Corpus Christi, Texas 78408, has applied for affiliate division membership. Robert B. Howe is vice president of the firm, which was established in 1998. R & R Petro Services installs and removes underground and aboveground storage systems and services corrosion protection systems. Nominated for PEI membership by Gib Hafernick, Kroschel, San Antonio, TX; Richard Weaver, PetroqpTX, Houston, TX; and Dean Cheramie, VeederR, Simsbury, CT.

Admitted Mid Iowa Petroleum Services, Inc., Marshalltown, IA (dis)
to PEI   U-Nova Industries, West Berlin, NJ (mfr)