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July 29, 2009 | Vol. 59, No. 17

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In This Issue
Dear PEI Member:

May and June brought some positive news to distributors in the petroleum equipment industry.

Members in California and Florida are still staying busy with EVR and UST upgrades, respectively. The hectic pace we saw in California earlier this year has slowed appreciably, but members expect a spike in September and another at the end of the year. Florida's UST replacement program will stay strong through the end of the year. Oil Express (July 27, 2009) reports that up to 1,500 gas stations in Florida won't meet the upcoming December 31, 2009, tank deadline and will have to close by January.

Distributors in the rest of the country, for the most part, expect total sales volumes to be ±10 percent compared to last year, which was strong for most members. The same should be true for profits, ±10 percent, as most members have taken the necessary steps to reduce costs wherever possible.

Most are busy with all types of construction: government, commercial, industrial, emergency generators, etc. Retail service station construction is by far the weakest sector, but even that has perked up recently as retail margins have improved over the last 30 days. Sales of aboveground tanks are off about 10 percent from the first quarter. Construction backlog is running four to eight weeks for the majority of our construction-related members.

Service, usually the strongest of a distributor's offerings, has slowed almost across the board. Nearly everyone we talk with says the same thing: "The customer is now waiting for two or three pumps to go down before they call us."

Business Conditions

E15 Waiver Comments

Regulatory Briefs

In This Issue

PEI and Industry News »


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PCI compliance upgrade standards are now understood by most customers. However, except for Shell's incentive program and systematic upgrades by a few large convenience store chains, retailers are still standing on the sidelines. Interest in equipment used to store, meter and dispense diesel exhaust fluid (DEF) is just beginning to heat up.

One member wrote: "Thankfully we are tied to an industry that keeps on going in the face of the huge economic mess that has crippled so many." He's right on target. We are in the midst of the worst recession since the Great Depression. If this is as bad as it gets, we can survive it.

NACS and SIGMA have filed joint comments
with the Environmental Protection Agency opposing a waiver request filed by Growth Energy to increase the ethanol content in gasoline to 15 percent. Both trade associations noted that the existing fueling infrastructure is unable to support ethanol blends greater than 10 percent, that selling blends greater than 10 percent exposes retailers to multiple layers of liability, and that warranties for most if not all passenger vehicles exclude coverage if a consumer uses fuels with more than 10 percent ethanol.
The Alliance of Automobile Manufacturers also opposed Growth Energy's waiver request. It said that increasing the blend rate beyond 10 percent ethanol would affect vehicle emissions, performance and durability. "We urge EPA to delay any decision on blends higher than E10 for the existing fleet until adequate testing results are available," the group said in a comment letter to EPA July 20. The Alliance represents BMW, Chrysler, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi Motors, Porsche, Toyota and Volkswagen.
"EPA, along with the Dept. of Energy, is continuing to test E15 and E20 in legacy vehicles. This testing will take at least another year, according to a DOE official, and EPA is sure not to approve an E15 or E20 blend until testing is completed."--Kiplinger's Biofuels Market Alert, July 1, 2009.
"In testifying on Capitol Hill recently, two out of three Cabinet officers mentioned biofuels in their opening statements. The two? Tom Vilsack, secretary of agriculture, and Steven Chu, secretary of energy. The one who didn't? Environmental Protection Agency Administrator Lisa Jackson, whose agency is weighing whether to bump up the ethanol blend in gasoline by 50% from E10 to E15. The move was requested earlier this year by Growth Energy, a trade association representing biofuels in Washington. Jackson's omission may have been perfectly innocent, but we're hearing that EPA staffers are somewhat resentful at attempts by members of both the current and former administrations to push for higher ethanol blends before ongoing testing has been completed."--Kiplinger's Biofuels Market Alert, July 15, 2009.

. The federal EPA has proposed to approve the source-specific State Implementation Plan (SIP) revision submitted by the Commonwealth of Kentucky to remove Stage II vapor recovery control requirements at Avis Rent-A-Car and Budget Rent-A-Car facilities at the Cincinnati/Northern Kentucky International Airport. Since volatile organic compound (VOC) emissions are now controlled by onboard refueling vapor recovery (ORVR), EPA concluded that removal of Stage II vapor recovery would not result in an increase of VOC emissions, and thus would not contribute to ozone formation.  
Automatic temperature compensation
. Senator Claire McCaskill (D-MO) has reintroduced the "Future Accountability in Retail (FAIR) Fuel Act," which would require nearly all retail fuel dispensers nationwide to be equipped with temperature compensation devices. McCaskill introduced similar legislation last year that did not attract much support. Earlier this month the National Conference on Weights and Measures rejected both the permissive and mandatory use of automatic temperature compensation at retail dispensers.

Northeast Petroleum Technologies, Inc.
has appointed Jim Holland as its new area sales representative working out of its Utica, New York, branch office. He will cover the western part of the company's marketing territory in New York State.
BP has announced the sale of its stake in a joint venture aimed at producing biodiesel from the seeds of the jatropha plant. BP found jatropha quite expensive to grow and harvest. The company said it has decided to invest in three strategic biofuel areas: ethanol from sugar cane in Brazil; cellulosic ethanol in the United States; and biobutanol.

Flying J Inc.
, Ogden, Utah, has reached a preliminary deal to sell its fuel-stop business to Pilot Travel Centers, Knoxville, Tennessee, in a plan that would see creditors paid back in full and set the stage for Flying J to emerge from bankruptcy. Pilot, which operates over 300 travel centers in 41 states, will also provide Flying J with $100 million in "debtor-in-possession" bankruptcy financing under the terms of the deal, which is subject to approval from the federal bankruptcy court in Delaware. Flying J owns 270 travel plazas in the United States and Canada. The proposed deal does not include Flying J's other businesses, such as its Longhorn Pipeline and the Big West Oil refinery in Bakersfield, California.

Transfer pump manufacturer
. Lutz Pumps, Inc., 1160 Beaver Ruin Road, Norcross, Georgia 30093, has applied for manufacturer division membership in PEI. Calle Larsson is president of the firm, which was established in 1970. The company manufactures transfer pumps and accessories which are sold through distributors. Sponsored for PEI membership by Rod Carter, TerraEnv, Sioux City, IA.
Safety-interlock manufacturer
. ESL Power Systems, Inc., 2800 Palisades Drive, Corona, California 92880, has applied for manufacturer division membership. Michael Hellmers is president of the firm, which was established in 1995. The company manufactures safety-interlocks including manual transfer switches for emergency power backup systems for commercial and industrial applications. The interlocks are sold through distributors. Sponsored for PEI membership by Bradley F. Baker, HuskyCorp, Pacific, MO.
Canada publication
. Convenience & Carwash Canada, 543 Borebank Street, Winnipeg, Manitoba R3N 1E8, has applied for affiliate division membership. Brenda Jane Johnstone is associate publisher for the magazine, which was established in 2008. Convenience & Carwash Canada is a bi-monthly, national trade publication serving the convenience, petroleum and carwash sectors in Canada. Sponsored for PEI membership by Eva C. Chambers, VeederR, Simsbury, CT.
Florida DEF supplier. Yara North America, Inc., 100 North Tampa Street, Suite 3200, Tampa, Florida 33602, has applied for affiliate division membership. Shelly Peterlin works in the marketing department of the firm, which was established in 1905. Yara produces DEF. Sponsored for PEI membership by Charles Culverhouse, Blue1USA, Duluth, GA, and Charlie Tew, SoPmpTnkNC, Charlotte, NC.
Florida manufacturers representative
. GEO Trading Solutions, LLC, 10606 SW 79th Terrace, Miami, Florida 33173, has applied for affiliate division membership in PEI. Gustavo E. Ortelli is CEO of the firm, which was established in 2008. The company is a manufacturers representative for products from the United States, Argentina, Europe and China. GEO Trading Solutions also provides construction engineering services. Sponsored for PEI membership by J. Gregory Hockman, HockmnLews, West Orange, NJ.
China dispensing equipment manufacturer. YongJia TongLian Petroleum Equipment Co., Ltd., Sanqiao Industrial Zone, Oubai, Yongjia, Wenzhou, ZheJiang, China 325105, has applied for affiliate division membership. Zhu Sheng is sales manager for the firm, which was established in 1998. The company manufactures nozzles, dispensers and fueling equipment. Sponsored for PEI membership by Li Er Lin, Censtar, Zhengzhou City, Hena, China.
Alabama installation and service company. FuelSystems, LLC, 616 West Carroll Street, Suite 4, Dothan, Alabama 36301, has applied for service and construction division membership. Evan Milner is the general manager for the firm, which was established in 2006. FuelSystems is a fueling equipment installation company that also offers testing, removal and upgrades. Sponsored for PEI membership by Allen Turner, TurnerPump, Dothan, AL.
Dominican Republic construction and maintenance firm. Conservasa, S.A., Calle Palacio de Los Deportes #85, El Millón, Santo Domingo, D.N., Dominican Republic, has applied for membership in PEI's service and construction division. Jaime R. De Los Santos is the primary contact for the company, which was established in 2007. The company builds and maintains service stations. Sponsored for PEI membership by Doc Boehme, BottomLine, Osakis, MN.   
Massachusetts testing and inspection service firm. Statewide UST Inspectors LLC, 189 Bowdoin Street, Suite 38, Boston, Massachusetts 02122, has applied for service and construction division membership. Kevin Cotton is the primary contact for the firm, which was established in 2008. The company provides compliance testing and inspection services, in addition to the installation and service of equipment. Sponsored for PEI membership by Jerome F. Mello, NorEastern, Boston, MA.


  • Benecor, Inc., Fenton, MI (mfr)
  • Brenntag, Reading, PA (aff)
  • JL Hansen Associates, Rotterdam Junction, NY (aff)
  • LeMesnager Engineering, Inc., San Diego, CA (S&C)
  • Total Environmental Solutions, Sanford, NC (S&C)
  • C-3 Technologies, LLC, North Brunswick, NJ (S&C)


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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.