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July 7, 2010 | Vol. 60, No. 13

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In This Issue
Dear PEI Member:

Three important announcements were made late last month that affect the marketing of mid-level ethanol blends. They include:

EPA delays the E15 waiver decision. The Environmental Protection Agency says it will wait until this fall to decide whether vehicle engines can handle higher concentrations of ethanol in gasoline. The agency had been expected to decide by mid-year whether to increase the maximum blend from 10 to 15 percent. EPA said in its announcement that initial tests "look good" and should be completed by the end of September. A decision will come after the Energy Department completes the testing of the higher blend on vehicles built since 2007. EPA said it is also testing some vehicles built before 2007 but will make a decision after the newer vehicle testing is completed. DOE also is testing tanks and other fuel handling equipment to see how they might be affected by E15.

Not only has the time frame been delayed, but the possible number of vehicles involved has been reduced dramatically. at least in the short term. Originally, EPA had stated they would make the decision for E15 for all vehicles made in 2001 or later. In this most recent announcement, EPA said the decision would now only include vehicles made in 2007 or later, lowering the number of affected vehicles to 20 percent of the U.S. market. EPA stated that another announcement about the use of E15 in older vehicles (i.e., made before 2007) would come later in the fall.

This is the second time EPA has announced a delay on its decision on the E15 waiver petition. The agency pushed the decision to this summer last December, saying further testing was needed. Petroleum marketers contend that other issues have to be resolved before retailers can feel confident about selling E15, including misfueling liability issues; pump labeling requirements; fire code and OSHA requirements; and the tank insurance state fund and business loan agreements they have with third parties.

UL lists E85 dispensers. Underwriters Laboratories (UL) has certified fuel-dispensing systems designed to be used with ethanol fuel concentrations up to E85 (85 percent ethanol; 15 percent gasoline). The fuel-dispensing system includes the dispenser, hose, nozzle, swivel, breakaway, and shear valves. Both the Gilbarco Veeder-Root Encore® and the Dresser Wayne Ovation® Eco fueling E85 dispensers have been certified. 

The impact of the approval enables the petroleum marketing industry to build the much-needed infrastructure to support ethanol with equipment that is legal (approved) to operate. The question now will be what officials in states that granted a waiver or variance (e.g., CA, CO, DE, IL, IA, MI, MO, MN, NY, OH, OR, WV, WI) to use an alternate dispenser design that was not listed by UL will do with the many dispensing systems currently in E85 service.

Fire code amendment defeated. An amendment to the National Fire Protection Association's (NFPA) Code for Motor Fuel Dispensing Facilities and Repair Garages (NFPA 30A) that would have made it easierand legalfor service stations to dispense mid-level ethanol blends (E15) using equipment that is not listed for E15 by a nationally-recognized testing organization like UL was defeated by the committee responsible for the document. The measure fell two votes shy of the 75 percent majority vote needed to pass the amendment. Fire officials who commented on the amendment thought that the proposed language was ambiguous and not detailed enough to allow authorities having jurisdiction to make informed decisions when reviewing legacy (i.e., existing) dispensing devices for higher ethanol blends.

Mid-level Ethanol Blends

NCWM and Rebuilt Equipment

Price Posting Group Formed


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The defeat of the amendment is thought by many industry observers to have less of an impact now that dispensers listed by UL for concentrations of fuel ethanol up to E85 are available. Furthermore, gasoline marketers who have been using the equivalency section of the fire code to get non-listed equipment approved for use with ethanol blends greater than E10 believe that option will still be available to them.

A proposed change to the National Institute of Standards and Technology's (NIST) Handbook 44 regarding the definition of remanufactured devices could have a profound impact on our industry. The National Conference on Weights and Measures (NCWM), meeting next week in St. Paul, Minnesota, will consider verbiage that defines how fuel dispensers are evaluated and the standard to which they must comply.

The proposal is a change to Section G-A-6 of Handbook 44, the publication used by most weights and measures authorities in the United States. The proposed changes are indicated below in bold text:

G-A.6. Nonretroactive Requirements. – “Nonretroactive” requirements are enforceable after the effective date for:

(a) devices manufactured and remanufactured within a state after the effective date;

(b) both new, and used, and remanufactured devices brought into a state after the effective date; and

(c) devices used in noncommercial applications which are placed into commercial use after the effective date.

Nonretroactive requirements are not enforceable with respect to devices that are in commercial service in the state as of the effective date or to new equipment in the stock of a manufacturer or a dealer in the state as of the effective date.

These may appear to be minor changes, but many believe they could have a major impact on businesses that remanufacture fuel dispensers and their component parts. PEI members and other observers have raised several questions as this issue has been considered at various regional weights and measures meetings across the country. For instance, they want to know:

  • What type of equipment will this affect?
  • How is a remanufactured device different from a used device? Remanufactured is very close to a "repaired" device and repaired devices do not have to meet the non-retroactive requirement. If a manufacturer brings back an old device, fixes it up and markets it as a used device, is it remanufactured?
  • Is there a better definition of what is "remanufactured?" Will this be enforced uniformly? 
  • Will all remanufactured devices require their own Certificate of Compliance?
  • What problem is this trying to solve? Some say the practice of reconditioning equipment to meet the specifications of the original Certificate of Conformance has been going on for years and that these devices are used equipment and already covered by Handbook 44.

The regional weights and measures entities are equally split on this issue, with half in favor of voting on the change next week while the other half recommends the Conference not vote but rather view this material as "informational." PEI will attend the National Conference on Weights and Measures meeting in St. Paul and hopes to learn the answers to these questions and report back to you. If you have other questions on this issue that you would like us to raise, please contact us.

A new workgroup has been formed by the National Conference on Weights and Measures (NCWM) to review current price posting and computing practices in the retail motor fuel marketplace. Its primary task is to consider whether any changes are necessary to Handbook 44 regarding price posting and computing capability requirements for retail motor fuel devices. The group’s first meeting will be held Sunday, July 11, at the National Conference on Weights and Measures meetings in St. Paul, Minnesota.

Retail gasoline operators
in the United States enjoyed their best January-to-June period for gross margins this century, according to a study conducted by Oil Price Information Service (OPIS). 
ConocoPhillips said it completed the sale of its 50 percent stake in CKJ Properties-Flying J truck stops to Pilot Travel Centers for $626 million.
BP PLC will sell 114 refueling stations and convenience stores located in 22 states throughout the Midwest and East Coast as part of its plan to divest itself from direct service station ownership.
Quarles Petroleum Inc., Fredericksburg, Virginia, has sold its retail outlets19 convenience stores and one truck stopin Virginia to various companies, including 14 to 7-Eleven Inc. 
Casey's General Stores, Ankeny, Iowa, plans to expand by approximately 60 to 90 stores in fiscal 2011. In addition, it will replace 20 stores and perform 20 major remodels. The company has recently signed purchase agreements for real estate in Arkansas and currently has four or five contracts to begin construction in the state.
Pilot Travel Centers LLC and Flying J Inc. announced the completion of the merger of the two companies on June 30. The new companyPilot Flying J―owns and operates more than 550 interstate travel centers and travel plazas in 43 states and six Canadian provinces. Pilot Flying J is selling 26 locations to Love's Travel Stops & Country Stores to meet a Federal Trade Commission condition to the merger.
Catterton Partners, a private-equity firm, has announced that Mid-Atlantic Convenience Stores (MACS) has acquired a majority interest in the 44-location Uppy's Convenience Stores Inc. and 170 convenience stores and fueling stations from Exxon Mobil Corp. The stores are located in Maryland, Virginia and Delaware.

PEI invites members to greet and assist attendees in finding their way around the convention center in Atlanta. Each Find Red volunteer works a few hours and helps in areas such as registration, bus drop-off locations, education sessions and receptions. Volunteers are provided a "Find Red & Find PEI" vest to wear during the scheduled volunteer times that run Tuesday-Thursday, October 5-7. For more information or to volunteer visit our Find Red & Find PEI page or contact Carletta Denison at

Pipe manufacturer
. Advantage Earth Products, 317 Vicki Towers Lane, Saint Augustine, Florida 32902, has applied for manufacturer division membership. Georges Boyazis is president of the firm, which was established in 2009. The company produces aboveground and underground pipe for the transfer of petroleum products. The pipe is sold through distributors. Sponsored for PEI membership by Marc Wiederhorn, ISPSystems, North Brunswick, NJ.
Software provider. Orchestra, LLC, 172285 SW Arborcrest Way, Beaverton, Oregon 97006, has applied for affiliate division membership. John-Michael Davis is vice president of operations for the firm, which was established in 2008. The company provides fuel distribution software with solutions that apply to all petroleum marketers, from the wholesale distributor to the single-station owner. Sponsored for PEI membership by James Phelps, CapitalOR, Beaverton, OR.
South Carolina convenience store construction company. Progressive Builders, Inc., P. O. Box 4367, Greenville, South Carolina 29608 has applied for service and construction division membership. Stephen Roach is vice president of the firm, which was established in 1965. The company builds convenience stores and performs associated petroleum work. Sponsored for PEI membership by Jeff Dailey, SoPmpTnkNC, Charlotte, NC.   
Virginia service company. C-Mark, P. O. Box 566, Forest, Virginia 24551, has applied for membership in PEI's service and construction division. Warner Hall is owner of the firm, which was established in 2007. The company provides service and parts to its customers. Sponsored for PEI membership by Brian Travis, GasStaSup, Lynchburg, VA.


  • Berco Tank, Watertown, CT (dis)
  • Percise Tank Modifications, Madison, PA (dis)
  • Velcon Filters, LLC, Colorado Springs, CO (mfr)
  • Robert Coker, Murphy Oil USA, El Dorado, AR (O&E)


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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.