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May 28, 2009 | Vol. 59, No. 13

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In This Issue
Dear PEI Member:

The U.S. EPA released its proposed rulemaking for the second stage of the renewable fuels standard (RFS2) on May 5. The proposed rulemaking lays out the agency's strategy for increasing the supply of renewable fuels as mandated by the Energy Independence and Security Act (EISA) of 2007, which requires the production of 36 billion gallons of renewable fuels by 2022.

The proposed rulemaking for RFS2 expands the scope of the program to all transportation fuels, which includes gasoline and diesel fuel intended for use in highway vehicles and engines, and nonroad locomotive and marine engines. Similar to RFS1, EPA is proposing that these provisions apply to refiners, blenders and importers of transportation fuel, and that the percentage standards apply to the total amount of gasoline they produce for each use.

Under EISA, the proposed rulemaking establishes four categories of renewable fuels with these gallonage requirements in 2022:

  • 16 billion gallons annually of cellulosic biofuels;
  • 21 billion gallons annually of advanced biofuels;
  • 1 billion gallons annually of biomass-based diesel; and
  • conventional biofuels are phased out by that time.

The proposed rule also includes substantial analysis for when EPA anticipates ethanol production to exceed the volume that can practically be blended into gasoline nationwide at the 10 percent volume level (E10), known as the "blend wall." The 10 percent per gallon by volume limit of gasoline is based on a Clean Air Act waiver granted in 1978. The analysis includes a discussion of distribution and equipment issues for E10, E85, and potential mid-level blends such as E15, and how distribution issues may be effected when the blend wall is reached.

The proposed regulation is 549 pages. Interspersed among those pages are nearly 20 pages of text that directly affect PEI members. The highlights and page numbers in the EPA proposal follow in case you want to turn directly to the "PEI stuff:"  

RFS2 Proposal

PEI Board Election Process Begins

Ethanol Notes


In This Issue

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  • A discussion about retail dispenser labeling for gasoline with greater than 10 percent ethanol (pp.172-3).
  • The proposal does not contain requirements that E85 refueling hardware be configured to prevent the introduction of E85 into non-flex-fuel vehicles (p.173).
  • One potential measure to prevent misfueling would be for cards to be issued to flex-fuel vehicle owners and for all E85 dispensers to be equipped with card readers that would allow E85 to be dispensed only to cardholders (p.173).
  • EPA requests comments on the challenges that will be faced by the fuel distribution system under the RFS2 standards and on what steps will be necessary to facilitate making the necessary accommodations in a timely fashion (p.228).
  • EPA introduces the concept of mid-level ethanol blends and potential equipment compatibility issues (pp.231-2). Waiver of mid-level ethanol blends are fully discussed (pp.253-61).
  • EPA estimates that an additional 24,250 E85 retail facilities would be needed to facilitate the consumption of the additional amount of ethanol that EPA projects would be used by 2022 to meet the RFS2 requirements. EPA estimates that the cost of installing E85 refueling equipment will average $122,000 per facility, which equates to $3 billion by 2022. This equates to "just 1.5 cents per gallon of E85 throughput" (pp.241-3).
  • Details of changes that would have to be made to fire codes, tank regulations, OSHA, and tank owner insurance contracts before mid-level blends of ethanol are introduced (pp.256-7).
  • Details EPA's efforts to determine compatibility of legacy equipment with mid-level ethanol blends, both for a complete and partial waiver of mid-level ethanol blends (pp.257-61). Seeks comments specifically related to "compatibility of the existing retail fuel storage/dispensing equipment with mid-level ethanol blends" (p.261).

A 60-day comment period will open when the Notice of Proposed Rulemaking is published in the Federal Register.

It is time to begin the process of electing members to the PEI Board of Directors. Under PEI's election procedure, the official representative or a duly appointed alternate must request to have his/her name included on the ballot. A form for that purpose was sent May 20 to the official representatives of PEI member companies from the odd-numbered districts of the distributor and manufacturer divisions and from the service & construction division. The form must be received in Tulsa by the close of business on Wednesday, June 10, for the name to appear on the ballot.

The U. S. Environmental Protection Agency (EPA) is extending the public comment period on the waiver application to increase the allowable ethanol content of gasoline to 15 percent (E15) which was submitted by Growth Energy and 54 ethanol manufacturers on March 6, 2009. The comment period is now extended to July 20, 2009. EPA makes it clear that this action does not extend the 270-day statutory deadline for the EPA Administrator to grant or deny the E15 waiver request, which ends on December 1, 2009. Comments can be emailed to
Sacramento-based Pacific Ethanol filed for Chapter 11 bankruptcy May 18. The announcement was the latest in a flurry of similar filings in the industry which has been hit by low prices and slack demand for energy. High corn prices relative to depressed gasoline prices, combined with a decline in demand for fuel mean that many of the young and highly-leveraged ethanol producers cannot survive the downturn. In response to the slew of ethanol plant bankruptcies, the Department of Agriculture announced earlier in the month that it will start to distribute grants and loan guarantees for the construction of commercial-scale biofuel refineries by making funds from a 2008 farm bill available within 30 days.
"There is incontrovertible evidence from numerous authoritative sources that ethanol blends exceeding 10 percent damage small non-road engines and pose risks to operator safety," claims the National Marine Manufacturers Association in comments filed with the Environmental Protection Agency.
"I think it's quite conceivable over the next decade of having biofuel penetration into the gasoline pool in both Europe and the United States reaching as much as 20%." BP Chief Executive Tony Haywood quoted in the May 14, 2009, Oil Daily.

Rick Long
has joined the PEI staff as general manager. A native of Memphis, Tennessee, Rick is an attorney, small business owner, strategist, writer and editor. He will supervise staff, serve as managing editor of The PEI Journal, and become involved with the legislative and regulatory aspects of the industry. Rick's email address is
Rick assumes the responsibilities of Connie Dooley, who will remain at PEI with scaled-back duties. Connie, in her new role, will oversee and coordinate PEI's annual convention. She can be reached, as before, at

The North Carolina Environmental Management Commission (EMC) has proposed changes to the state's underground storage tank secondary containment rules concerning interstitial monitoring of double-walled tanks. The proposed rule allows electronic liquid detector sensor monitoring as a permissible method of monitoring the interstitial space of a double-walled tank for releases. Additional language incorporates standards for operation, maintenance and testing of USTs if electronic liquid detecting sensors are used for leak detection monitoring. The proposed rule is available here. Written comments will be accepted through June 30, 2009.      

According to a position paper posted this month on the Petroleum Marketers Association of America (PMAA) website, the trade association says that the "credit card companies are abusing small business with their market power and Congressional small business leaders need to investigate." To that end, PMAA is requesting its members "call the House and/or Senate Small Business Committee leaders and ask that a hearing on PCI Compliance be scheduled in the very near future."

Containment Solutions, Inc.
, Conroe, Texas, has announced that Don Burger will be the company's new western regional manager. He can be reached at
Petroleum Solutions, Inc., McAllen, Texas, has added two people to its PSI sales team. Shellie Steele is a sales representative working out of the company's newest location serving the DFW Metroplex. She can be reached at (972) 314-2400 or Michael Merwarth has joined in the sales team in San Antonio and can be contacted at (210) 661-2489 or    

Dan Kushnir
, sales manager for Seraphin Test Measures, Rancocas, New Jersey, died May 19. He began his career at Seraphin in the shop working with sheet metal in 1973. He worked his way up to junior engineer, salesman and eventually sales manager. Dan is survived by his daughter and son-in-law, along with their four children.

is working on an agreement to sell its 800 retail stations in Australia for approximately $380 million, the Australian Financial Review reports.
Brazilian energy major Petrobras has completed the acquisition of ExxonMobil's stake in Esso Chile Petrolera and other associated Chilean companies relative to the fuel business in the retail, industrial and aviation markets. With the deal, Petrobras now owns a network of 8,315 points of sale in six South American countries.—Datamonitor, May 4, 2009.

Chemical dispensing system manufacturer
. Colder Products Company, 1001 Westgate Drive, St. Paul, Minnesota 55114, has applied for manufacturer division membership. Tom Braun is business unit manager for the firm, which was established in 1978. Colder Products manufactures dispensing systems that provide extraction of high-purity chemicals from drums and other bulk transfer containers, which are sold through distributors. Sponsored for PEI membership by David Crouse, OPW-FC, Hamilton, OH.
Dispenser manufacturer. TOPS, P. O. Box 57307, Salt Lake City, Utah 84157, has applied for manufacturer division membership. Fred W. Jones is president of the firm, which was established in 2005. TOPS manufactures dispensers, which are sold through distributors. Sponsored for PEI membership by Mark Babcock, AdamsFogg, Falmouth, ME.
Storage tank manufacturer. Hamilton Tanks, 2200 Refugee Road, Columbus, Ohio 43207, has applied for manufacturer division membership. Bret Carlyle is sales and marketing manager for the firm, which was established in 1906. Hamilton Tanks manufactures aboveground and underground storage tanks which are sold through PEI distributors. Sponsored for PEI membership by Chuck Storey, Storey&Son, Cincinnati, OH.
DEF storage and dispensing system manufacturer. Blue1USA, 3883 Rogers Bridge Road, Suite 205-A, Duluth, Georgia 30097, has applied for manufacturer division membership. Charles Culverhouse is sales and marketing manager for the firm, which was established in 2008. The company provides storage and dispensing systems for the commercial, retail and industrial markets. The equipment is sold through distributors. Sponsored for PEI membership by David Crouse, OPW-FC, Hamilton, OH.
Connecticut general contractor. Amor Pump Service LLC, 16 Cherry Hill Drive, Newington, Connecticut 06111, has applied for membership in PEI's service and construction division. Arthur J. Amor is the primary contact for the company, which was established in 2003. The firm is a general contractor and performs Stage II vapor recovery testing and line and leak testing. Sponsored for PEI membership by Thomas J. Dion, WildcoPtr, Bloomfield, CT.
Florida installation and service contractor. Ultimate Petroleum Incorporated, 14330 SW 151st Court, Miami, Florida 33195, has applied for service and construction division membership. Vince Calvo is president of the company, which was established in 1999. The firm installs and services POS equipment, dispensers and tank monitoring equipment. Sponsored for PEI membership by Mike Futral, Tronitec, Marietta, GA.
New Jersey installation and service contractor. Spark Contractors, 1307 14th Avenue, Dorothy, New Jersey 08317, has applied for service and construction division membership in PEI. Thomas Ruga is vice president for the firm, which was established in 1959. The company installs and services pumps and tanks. Nominated for PEI membership by Kenneth T. Hagman, Habhegger, Yeadon, PA.
Pennsylvania installation and service company. Richard T. Wimer Inc., 431 Springville Road, Quarryville, Pennsylvania 17566, has applied for service and construction division membership. Richard T. Wimer is president of the firm, which was established in 1989. The company installs, services and removes equipment. Sponsored for PEI membership by Fred Monroe, Monroe, Arlington, TX.


  • Horn GmbH & Co. KG, Flensburg, Germany (mfr)
  • Flowserve Pump Co., Memphis, TN (mfr)
  • Snyder Industries, Inc., Lincoln, NE (mfr)
  • Combustion & Fuel - Service & Improvement, Cajica, Colombia (S&C)
  • JHL Industrial Services, Centennial, CO (S&C)
  • Kandras Construction & Management Inc., Plantation, FL (S&C)
  • Mott-Smith Consulting Group, LLC, Tallahassee, FL (aff)
  • Kruse North America, Wilmington, DE (aff)


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Petroleum Equipment Institute
P. O. Box 2380
Tulsa, OK 74101-2380

The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Robert N. Renkes, Executive Vice President, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.