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February 5, 2010 | Vol. 60 No. 3

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In This Issue
Dear PEI Member:

PEI convened a meeting of industry stakeholders (oil marketers, additive manufacturers, EPA, equipment groups, trucking industry and standards organizations) last week at EPA's Office of Underground Storage Tanks to discuss reports of corrosion in underground storage tank and dispensing systems containing ultra low sulfur diesel (ULSD). The problem was first identified in a PEI Forum post in December 2007 and then described in detail in the PEI Journal (1st Quarter 2010) that was mailed last week. A digital version of the PEI Journal can be read and downloaded at

PEI called the meeting because we have received reports of excessive corrosion of metal equipment and components from all regions of the country, in both newer and older equipment, in high- and low-use situations. But the corrosion problems don't appear everywhere and excessive deterioration does not seem to appear at all facilities in a particular market. Participants in the meeting stressed that they had firsthand knowledge of only a few incidents of corrosion and by some accounts reports had not increased over time. Although many at the meeting had not seen corrosion on a large scale, a fair number of them were still in an information gathering mode.

The stakeholders group agreed to take a two-pronged approach to investigate the problem. The first step is to determine if the corrosion problem is isolated or more widespread. A task force was formed at the meeting to develop separate surveys for equipment manufacturers, service providers, and owners/regulators to try to get a handle on how pervasive the problem is. If the results indicate substantial issues, then the second step would be to conduct a systematic integrated evaluation of the problem and suggest a solution.

We expect the initial surveys of equipment manufacturers, service providers and tank owners/regulators to be available by the end of February.

PEI staff attended a meeting last week hosted by the American Petroleum Institute (API) where participants shared the progress that has been made on various research projects concerning mid-level ethanol blends (E15) and other renewable fuels. Representatives from the National Renewable Energy Laboratory (NREL) and Oak Ridge National Laboratory discussed the testing they are performing on legacy petroleum marketing equipment for the Department of Energy (DOE). The Environmental Protection Agency (leak detection equipment) and API (vapor recovery equipment) also shared information about the research projects with which they are involved. There were two takeaways from the meeting that are important for PEI members and their customers:

Ultra Low Sulfur Diesel

Mid-grade Ethanol Blends

Automatic Temperature Compensation

In This Issue

Charles D. Kemp
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  • Participants at the meeting fully expect EPA to permit the use of ethanol blends up to 15 percent sometime this summer. Tests conducted for DOE by NREL on late-model vehicles have not shown any major problems to date.
  • The research projects on legacy equipment used in petroleum marketing operations will not be completed before EPA's expected announcement. That means EPA will most likely be in a position to approve a fuel (E15) that can legally (as far as EPA is concerned) be used in most vehicles, but for which listed petroleum marketing equipmentnew or legacydoes not exist.  

On a related note, we expect the National Fire Protection Association's (NFPA) Technical Committee on Automotive and Marine Service Stations to amend NFPA 30A (Code for Motor Fuel Dispensing Facilities and Repair Garages) to require dispensers, hoses, breakaways, swivels, flex connectors, emergency shutoff valves, vapor recovery systems and pumps used with alcohol-based fuels to be either listed or approved. If this code change is made, fire marshals can allow nonlisted equipment to be used provided it is "acceptable" to them. The code change would be similar to that adopted by the International Code Council to its International Fire Code in 2009. We will provide you with additional information on this change as soon as the NFPA code change process officially begins this spring.

National Conference on Weights and Measures (NCWM) officials, at its Interim Meeting last week in Nashville, voted to withdraw all proposals involving automatic temperature compensation issues under consideration by the Specification and Tolerances Committee. Furthermore, the NCWM board of directors voted to dissolve a special task force formed last year to evaluate ATC issues and to develop recommended changes to Handbook 44. As a result of action taken at the meeting, all automatic temperature compensation issues under consideration and review by the National Conference on Weights and Measures are resolved and no action is expected in the foreseeable future.

The number of convenience stores in the United States fell 0.2 percent in 2009 and now stands at 144,541 as of December 31, 2009, according to data from the NACS/Nielsen TDLinx 2010 Convenience Industry Store Count. This is the second straight year that the count has declined, but only the fourth time in the last 15 years. The industry count reached a high of 146,294 stores two years ago. A total of 115,340 stores sell motor fuels, a 0.6 percent increase over last year. Single-store operators account for 62.3 percent of the industry.

U. S. Transportation Secretary Ray LaHood announced federal guidance to expressly prohibit texting by drivers of commercial vehicles such as large trucks and buses. The action is the result of the Department's interpretation of standing rules. Truck and bus drivers who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750. The prohibition is effective immediately.

"In 2010, we will be growing our chain of 1,050 retail locations
by adding an additional 80 sites, which will be a combination of Murphy USA locations at Wal-Mart supercenters and our standalone Murphy Express offer," said Murphy Oil Corp. president and CEO David Wood during the company's fourth-quarter 2009 earnings call last week.
Norway's Statoil said February 3 that it may spin off its Energy and Retail Division by the end of the year in a bid to reduce its exposure to the low-margin service station business. Statoil currently owns a network of 2,300 service stations spread across eight countries.
Royal Dutch Shell signed a non-binding memorandum of understanding with Brazil's Cosan on February 1 to form a $12 billion biofuels joint venture. Around 90 percent of new vehicles sold in Brazil are flex-fuel vehicles capable of running on either pure ethanol or pure gasoline. Brazil's state-owned oil company Petrobras has said it expects sugar cane-based ethanol to take over 75 percent of Brazil's light vehicle fuel market by 2020, shrinking gasoline's share of the market to 17 percent.  
Kinder Morgan Energy Partners said it has bought three ethanol terminals for $195 million and formed a venture that will help create a national distribution system for the alternative motor fuel.

Ventaire, LLC
moved February 1 to 909 North Wheeling Avenue, Tulsa, Oklahoma 74110. The company's new mailing address is P. O. Box 481090, Tulsa 74148.
RDM Industrial Electronics, Inc., Nebo, North Carolina, has named P & G Marketing & Associates as its 2009 Manufacturer's Representative of the Year. RDM also has announced that JV & Associates, Inc. will represent its product line in Florida.
Plasteel International Inc., Carlsbad, California, has licensed MPI Consultants LLC,  Ulaanbaatar, Mongolia, to manufacture Plasteel® underground tanks.
Total Control Systems, Fort Wayne, Indiana, has named Shawn Kiefer its west coast sales manager. He will be based out of Tulsa, Oklahoma. Cell: 260-403-0444. Email:

Carol Winicki, former customer service manager for EBW, passed away January 9 at the age of 76. Carol worked at EBW for 31 years and served as customer service manager for the last 20 years until her retirement in 1999. She is remembered as a person who knew and remembered every customer personally and was genuinely interested in them and their families. She was preceded in death by her husband of 51 years, Bernard, in 2006. Survivors include four children and eight grandchildren.

Tennessee general contractor
. Southern Integrated Services, Inc., P. O. Box 197, Atoka, Tennessee 38058, has applied for membership in PEI's service and construction division. J. D. Martin is the primary contact for the company, which was established in 2004. The company is a general contractor, offering service and installation to its customers. Sponsored for PEI membership by Eric M. Scott, SouthernCo, Memphis, TN.
Florida petroleum services provider. ProtoCore Technologies, PMB #111, Suite 305, 2750 Race Track Road, St. Johns, Florida 32259, has applied for service and construction division membership. Cheryl R. Bennett is a managing member of the company, which was established in 2009. The company provides service and repairs POS systems, pumps and tank monitoring equipment. Sponsored for PEI membership by Brantley Crosby, PtrSerGrp, Waycross, GA.


  • Complete Aviation Fuel Systems, Peoria, AZ (dis)
  • Renewable Fuels Association, Omaha, NE (aff)
  • EnerCon Construction Services, Bear, DE (S&C)
  • Orion Merchant Solutions, Inc., Miami, FL (S&C)
  • Winesett-Hill Constructors, Inc., Hixson, TN (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.