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April 15, 2015 | Vol. 65, No. 7

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In This Issue

Dear PEI Member:

Baby boomers preparing for retirement are driving a surge in the sales of petroleum equipment businesses, as they find more and more buyers confident enough in the industry and the economy to quickly expand their own businesses through strategic acquisition.

One of the reasons companies in our industry are attractive to would-be buyers is that the wholesale/distribution industry in general is very predictable in terms of sales and return on investment. While profitability varies from company to company in our industry—as it does in all industries—the wholesale/distribution industry in general offers buyers reliable cash flow, visibility, market-power benefits and the ability to serve multi-geographic, multi-facility accounts.

Compare that situation with companies currently involved in oil and gas exploration and production. According to speakers at a corporate law seminar we attended last week, the merger and acquisition activity for those types of companies currently is nonexistent. One speaker reviewed the Form 10-K filed with the United States Securities and Exchange Commission by WPX Energy, Inc., an independent natural gas and oil exploration and production company. One of the risk factors identified by WPX was that “prices for natural gas, oil and NGLs are volatile, and this volatility could adversely affect our financial results, cash flows, access to capital and ability to maintain our existing business.” WPX then went on to cite other factors—all beyond the control of the company—that could affect their markets, including:            

  • Weather conditions;
  • The level of consumer demand;
  • The overall economic environment;
  • Worldwide and domestic supplies of and demand for natural gas, oil and NGLs;
  • Turmoil in the Middle East and other producing regions;
  • The activities of the Organization of Petroleum Exporting Countries;
  • Terrorist attacks on production or transportation assets;
  • Variations in local market conditions;
  • The price and availability of other types of fuels;
  • The availability of pipeline capacity;
  • Supply disruptions, including plant outages and transportation disruptions;
  • The price and quantity of foreign imports of natural gas and oil;
  • Domestic and foreign governmental regulations and taxes;
  • The credit of participants in the markets where products are bought and sold; and
  • The adoption of regulations or legislation relating to climate change.  

Member Companies Changing Ownership

State Tank Regulations

NATSO & SIGMA Make Personnel Changes

NTSB Weighs In On Dot-111 Replacement/Upgrade






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Wholesale distribution in general—and the downstream petroleum equipment industry in particular—is neither glamorous nor sexy. But it is dependable and not affected by a long list of outside variables, and that puts it high on the list of possible acquirers and gives hope to owners wishing to sell their companies and retire from the industry.  

New Hampshire
. Underground storage tank owners in the state have until December 22, 2015, to replace their single-walled UST systems with double-walled equipment to comply with a Department of Environmental Services (DES) rule passed nearly two decades ago. According to a story in The Union Leader, DES reports that 148 single-walled USTs remain in operation while another 597 systems either need to install under-dispenser containment or double-walled piping, or be closed. Another 134 heating oil tank systems either need to be upgraded or removed by December 22, 2015, as well.
West Virginia
. West Virginia Governor Earl Ray Tomblin (D) signed legislation March 27 that amended the state’s 2014 Aboveground Storage Tank Act by cutting the number of storage tanks subject to oversight by 75 percent. Under the new law, only tanks within 1,000 feet of a public surface water supply or containing more than 50,000 gallons will be subject to the inspection requirements. Under the revised rule roughly 12,000 tanks will continue to be held to inspection and integrity standards put in place in 2014, while 36,000 other tanks registered with the state will not. The law, which takes effect June 12, requires that regulated aboveground storage tanks be inspected every three years. The 2014 measure was triggered by an aboveground tank release of about 10,000 gallons of 4-methylcyclohexane methanol into the Elk River upstream from a public water intake portal, prompting a “do not use tap water” order for nine West Virginia counties.

has promoted Brad Stotler to vice president of government affairs. Stotler succeeds Holly Alfano, who recently resigned her position with NATSO to become the executive director of the International Lubricants Manufacturers Association. Stotler has served as NATSO’s director of government affairs since 2010. In his new role, Stotler will lead the association’s legislative policy and lobbying efforts on behalf of the truckstop and travel plaza industry.
SIGMA, the national association of fuel marketers and convenience store chain retailers in the United States and Canada, has selected Ryan McNutt as its chief executive officer. McNutt spent ten years with Midwest Petroleum, a St. Louis-based convenience store operator, as vice president of operations. He most recently served as a senior director in national retail sales for Anheuser-Busch in the convenience store channel. McNutt will assume his role April 20.

“CITGO is providing limited coverage for fraud once the October 1, 2015, deadline to comply with Europay MasterCard Visa (EMV) standards for chip card technology takes effect. The company points out that because POS manufacturers are expected to release EMV-compliant software after the deadline, it will indemnify locations with upgraded POS systems from payment card fraud involving chip cards until the necessary software is released.”—Oil Express, April 6, 2015.
Global Partners LP, Waltham, Massachusetts, announced April 14 that it has entered into an agreement with Capitol Petroleum Group to purchase a portfolio of 97 Mobil- and Exxon-branded retail gas stations and seven dealer supply contracts in New York City and Prince George’s County, Maryland. The total consideration is approximately $156 million, subject to closing adjustments.

The National Transportation Safety Board (NTSB) on April 6 issued a set of “urgent” recommendations for replacing controversial oil train cars more quickly than federal regulators planned. The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) and Federal Railroad Administration (FRA) had previously proposed new standards for trains containing crude oil tanks that call for DOT-111 tank cars to be retrofitted or replaced within 10 years. NTSB chairman Christopher Hart said April 6 that DOT-111s are too dangerous to leave on the rails that long. The cars, which make up the majority of the crude oil tanks currently used on U.S. railways, have not been upgraded for decades.    

The DOT-111 rail cars have been at the center of controversy after a recent series of oil train accidents in North America. The July 2013 fiery derailment of a Bakken crude-carrying Montreal Maine and Atlantic Railway Ltd. freight train in Lac-Megantic, Quebec, killed 47 people and destroyed a large portion of the town. The tanker cars that derailed in Quebec and spilled more than 1 million gallons of Bakken crude were equivalent to DOT-111 tank cars.

Lighting manufacturer
. LED Power, 1731 Kaiser Avenue, Irvine, California 92614, has applied for manufacturer division membership. Cary Aberg is co-founder of the company, which was established in 1994. The company designs and manufactures light emitting diodes (LED), which are sold through distributors. Sponsored for PEI membership by William J. Mascott, MascottEqp, Portland, OR. www.ledpower.com
Illinois architectural engineering firm. Corporate Design and Development Group, 2675 Pratum Avenue, Hoffman Estates, Illinois 60192, has applied for affiliate division membership. Christian Kalischefski is president of the firm, which was established in 2004. The company is an architectural engineering firm that specializes in the retail petroleum market. Sponsored for PEI membership by Chris Long, WalshLong, Naperville, IL. www.cdg-llc.com   
Illinois gas and oil resistant cable provider. Windy City Wire, 386 International Drive, Suite H, Bolingbrook, Illinois 60440, has applied for affiliate division membership. Kimberly DePaola is in sales for the company, which was established in 1994. The company is dedicated to developing solutions that generate cost savings for their customers. Sponsored for PEI membership by Steve Trabilsy, Accurate, North Aurora, IL. www.smartwire.com     
Massachusetts inspection firm. Mass Tech Inspection, 2 North Hunt Road, Amesbury, Massachusetts 01913, has applied for affiliate division membership. James Michael Hill is project engineer for the firm, which was established in 1945. The company provides consulting services and inspects tanks. Sponsored for PEI membership by Ben Thomas, USTTrainWA, Clinton, WA.
Argentina service and construction firm. Pastorino Global Services S.A., Julio A. Roca 435, Cordoba, X5000CQB, Argentina, has applied for service and construction division membership. Daniel Tomas Pastorino is president of the firm, which was established in 1960. The company specializes in equipment used for fueling. The company also installs and maintains dispensers, pumps and flow meters. Sponsored for PEI membership by Shaun Gravistin, LqdCntrols, Lake Bluff, IL. www.pgsargentina.com 
Massachusetts testing firm. Advanced Tank Testing Services, P. O. Box 385, South Deerfield, Massachusetts 01373, has applied for service and construction division membership. Richard Bradford is president of the firm, which was established in 1994. The company tests underground and aboveground storage tanks, Stage II vapor recovery equipment, piping and leak detection systems. Advanced Tank Testing also decommissions Stage II equipment. Sponsored for PEI membership by Dan Ripley, QualityNzl, Bethel, CT. www.advancedtanktesting.com
Missouri installation and repair company. Springfield Petroleum Service, 2979H East Chestnut Expressway, Springfield, Missouri 65802, has applied for service and construction division membership. Linda Kongker is office manager for the firm, which was established in 2012. Springfield Petroleum Services installs and repairs petroleum equipment at convenience stores and bulk plants. Sponsored for PEI membership by Susan Burkhardt, Neumayer, St. Louis, MO. 
Tennessee testing and certification program. Leak Detection Technologies, LLC, 2000 Mallory Lane, Suite 130-605, Franklin, Tennessee 37067, has applied for service and construction division membership. David Rabb is vice president of the firm, which was established in 2007. The company tests pipelines, and tests and certifies aboveground and underground storage tanks. Sponsored for PEI membership by Ryan Rethmeier, WesternPmp, San Diego, CA. www.leakdetect.net       


  • Superior Performance Petroleum Equipment Sales LLC, Opelika, AL (dis)
  • Fuel Management Technologies, Broughton, Huntingdon, Cambridgeshire, UK (mfr)
  • Comet Signs, San Antonio, TX (aff)
  • FMG-LLC/SFICO, Maitland, FL (aff)
  • Petrosoft, Pittsburgh, PA (aff)
  • PNE Construction, Longview, WA (S&C)
  • Rajesh Patel, Heri Inc., Martinsville, MO (O&E)


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© 2015
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.