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April 26, 2011 | Vol. 61, No. 9

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In This Issue
Dear PEI Member:

Beginning April 14, the U.S. Department of Agriculture's (USDA) Rural Energy for America Program (REAP) is available to provide grants and loan guarantees for the purchase and installation of retail flexible fuel dispensers and related equipment, and the retrofitting of existing pumps to dispense E85.

The program is geared to serve the rural small business owner. The station must be in an area with a population under 50,000 and not in an urbanized area adjacent to a city or town with a population over 50,000 (i.e., a suburb of a major city). Furthermore, owners of convenience stores with gasoline stations must have average annual sales of less than $27 million to qualify. 

Grant awards are limited to no more than 25 percent of total eligible project costs, with a minimum grant of $2,500 and a maximum grant of $500,000. Loan guarantees must not exceed 75 percent of the total eligible project costs (including REAP grant funds, if applicable), with a minimum of $5,000 and a maximum of $25 million. The costs to purchase and install/upgrade/retrofit a dispenser and tank only to dispense E15after the fuel is approved by EPA―are NOT covered by this program. Project costs that may be paid with REAP funds include, but are not limited to:

  • post-application purchase/installation of equipment, including underground storage tanks;
  • post-application construction or improvements;
  • energy audits/assessments;
  • permit and license fees; professional service fees, except application preparation;
  • feasibility studies/technical reports/business plans; and
  • retrofitting.

Station owners may have access to additional sources of funds, including a 30 percent U.S. Department of Treasury tax credit for the investment in renewable refueling infrastructure, as well as financial incentives from industry and selective states for flexible fuel pumps.

Applicants for USDA grants and loan guarantees must submit a completed application by June 15, 2011, to be eligible for funding during the government's fiscal year 2011 which ends September 30. USDA will score each application using several criteria. Each scored application will compete against all other REAP applications, with higher scoring applications receiving first preference. USDA officials announced during a recent webinar that usually around 75 percent of REAP grant applicants are approved. USDA intends to announce awards each year between July and September.

USDA Announces Grant/Guarantee Program

Alternative Fuel Outlook

Canadian Retail Gasoline Outlet Survey

Lundberg: Ethanol on Thin Ice?

In This Issue

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PEI and Industry News »


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For more information on REAP and flexible fuel pump program, PEI members should direct their customers to the USDA Rural Development Energy Coordinator (PDF) in the state where the station is located.

Rising oil prices are bringing advanced biofuels closer to commercial reality. The combination of $100-per-barrel crude and recent engineering advances makes fuel derived from plant waste or algae an attractive petroleum alternative, while promising to sidestep the impact today's crop-based fuels have on food prices.

Look for cellulosic ethanol to break out first, with the first commercial plant in the U.S. slated to open next year. The operator, Poet of S.D., expects fuel brewed from corn stalks to cost about a dollar less per gallon than pure gasoline. Newly developed enzymes that work with any plant matter will let distillers shop for the cheapest feedstocks.

Algae-based fuels will take longer to perfect, but offer significant potential as a long-run petroleum replacement. Expect algae to compete with oil on price by 2020, as technology gains whittle away the current two-to-one advantage now held by crude-oil-based fuel.―The Kiplinger Letter, April 15, 2011.

According to Exchange Magazine, there were fewer than 12,000 retail gasoline outlets across Canada in 2009. Of that number, approximately 39 percent identified the age of their sites as being 10 years or younger, 50 percent between 11 and 30 years, and 10 percent between 31 and 60 years. Other findings of interest to PEI members include:

  • Almost 90 percent of the more than 29,000 gasoline storage tanks in operation at retail gasoline outlets across Canada in 2009 were underground. Close to 41 percent of all gasoline storage tanks at retail gasoline outlets were less than 10 years old, 56 percent were between 10 and 25 years old, and 3 percent were more than 25 years old.
  • In 2009, over 43,000 dispensers were in operation at retail gasoline outlets. Nearly 87 percent of those were electronic. About 60 percent of all dispensers were less than 10 years old, 38 percent were between 10 and 25 years old, and 2 percent were more than 25 years old.
  • There were 279 marinas with gas docks across Canada in 2009. About 380 storage tanks were used to store product for those marinas.

"Are you being asked/advised to put in expensive ethanol blending pumps that can handle E85? Is a retail competitor near you offering 'pure' or 'clear' gasoline with no ethanol in it, as a selling point?

"Prior to investing in blender pumps, retailers should consider: The rock solid support for ethanol from politicians is crumbling for several reasons including the nation's huge budget deficit. Environmentalists have for the most part abandoned support for ethanol as a 'clean fuel.' And most importantly, motorists' patience may be reaching a tipping point―especially if force feeding of E15 commences.

"Bleeding tax coffers at a time of record deficits, ethanol also robs economically strained motorists of mileage, while the latest EPA approval of 15 percent ethanol in gasoline may damage car engines and invite lawsuits. Meanwhile, corn consumers are livid as the price of corn has doubled along with ethanol's share of the crop."―Lundberg Letter, February 16, 2011.

. A new requirement for Milwaukee convenience stores was signed into law earlier this month. It requires c-stores to have at least two high-resolution security cameras that use recordable discs that cannot be overwritten. One camera must be pointed at the store's entrance and the other at the cash register area.

Petroleum and Construction Services, Inc.
(PACS) has closed its office in Pompano Beach, Florida. Great Dane Petroleum has merged resources (personnel and inventory) with the former PACS office and hired Rich Quinn as director of sales and marketing. Great Dane moved into the former PACS office located at 1330 South Andrews Avenue, Pompano Beach, Florida 33069, effective April 15. The Apopka office of Petroleum and Construction Services, Inc. continues to operate as before with Tony Frick and Mike Pavelko leading the company as president and vice president, respectively.
Robert Gurin has purchased the shares of Glen Mulder, former president of DRW Services, Inc., Chicago Heights, Illinois. Gurin is now president of the company; Mulder can be reached at

Members of the Steel Tank Institute/Steel Plate Fabricators Association (STI/SPFA) elected new members to their 2011 board of directors at the organization's recent annual meeting in Orlando, Florida. Officers for 2011 were then elected by the board at its first meeting of the year, also in Orlando. Terry Cooper of Acterra Group, Inc. is the 2011 president of STI/SPFA. Also elected as officers were Sonny Underwood of Mid-South Steel Products, Inc. (vice president); Ron Houston, J. L. Houston Co. (treasurer); and Tim Woofter, Stanwade Metal Products (chairman of the board). All STI/SPFA officers are also PEI members. Terry Cooper and Tim Woofter also currently serve on the PEI Board of Directors.

PEI members who were recently elected to serve three-year terms on the STI/SPFA board include Tony Honey of Modern Welding Co., Inc., Steve Meeker of Hamilton Tanks, LLC, and Sonny Underwood. David Watson of Watco Tank, Inc. continues on the STI/SPFA board.  

"For $14 billion, the U.S. could install one electric vehicle
(EV) charger at each of the 140,000 gas stations according to a study conducted by IDTechEx Ltd. The report predicts the demand for EV charging stations will sextuple in the next decade to reach over $4 billion for charging station hardware and about $25 billion including installation."―Ethanol and Biodiesel Information Service, April 18, 2011.
For a list of ethanol-free gasoline stations in the United States and Canada, go to The list, which is updated by the minute, currently includes almost 3,000 stations. The number of stations that offer ethanol-free gasoline has grown each month since the list was first made available almost two years ago. 


  • Phoenix Environmental Inc., Whitmore Lake, MI (dis)
  • J V & Associates, Inc., Orlando, FL (aff)
  • Ohcotech Corporation, Mangaluyong, Philippines (aff)
  • Petrocom Construction Ltd., Edmonton, AB (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.