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October 12, 2017 | Vol. 67, No. 20

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In This Issue

Dear PEI Member:

“It never happened.” “That’s a lie.” “That claim was disproved long ago.”

To advocates on both sides of today’s increasingly partisan political divide, “fake news” seems to be everywhere.

Our industry deals with its share of fake news too—most prominently, the belief that liquid fuels and the equipment used to store, meter and dispense those fuels soon will disappear. New electric and autonomous technologies, we are told, will completely replace the internal combustion engine, and an entirely new nationwide fueling infrastructure will take the place of today’s gasoline and diesel fueling islands.

The truth is quite different. Liquid fuels will be around for a long time. You can count on it. Just ask Warren Buffett.

For decades, Buffett has been among the richest people in the world. Forbes’ most recent rankings put his net worth at more than $75 billion. Through his Berkshire Hathaway holding company, Buffett has built a diverse portfolio of stable, well-managed businesses working in market sectors central to the U.S. and world economies: railroads, aviation, insurance, big box stores, electronic components. Buffett doesn’t look for “way-out-there” ideas and companies. The more basic, the better. In fact, he once famously said, “Never invest in a business you cannot understand.”

Well, it turns out Buffett understands a great deal about the nation’s transportation and fueling infrastructure. On Oct. 3, Berkshire Hathaway announced its purchase of 38.6 percent of Pilot Flying J, North America’s largest travel center operator. In 2023, Berkshire Hathaway’s stake will climb to 80 percent.

According to Forbes, Pilot Flying J is the 15th largest privately held company in the U.S. It boasts $20 billion in annual sales and 5,000 diesel lanes at more than 750 travel plazas in 44 states and Canada.

Are electric vehicles (EVs) a threat to high-volume gasoline and diesel operators such as Pilot Flying J? Sure. Recent real—not fake—news stories make that clear. Cummins just announced its first heavy-duty electric truck, dubbed AEOS, will be available beginning in 2019. Tesla has been working on its Tesla Semi for more than a year. GM is planning 20 new EV models by 2023. Mercedes Benz is investing $1 billion dollars to bring EV manufacturing to the U.S. And many other light-, medium- and heavy-duty vehicle manufacturers are quietly developing their own unique EV strategies.

Warren Buffett Enters the Industry

Smart Gas Station to Open

PEI Conference Planning Committee Volunteers Needed

Michigan Expands Leaking UST Reimbursements



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Travel plazas such as Pilot Flying J face yet another risk: the potentially rapid development of fully autonomous trucks. After all, driverless trucks won’t have road warriors looking for coffee, meals or supplies every time they stop to fill up.

So, why would Buffett invest in a dying industry? The answer is he wouldn’t. In interviews, Buffett cited the reasons behind the Pilot Flying J acquisition—most notably, the strength of the company’s management team and strategic growth plan.

Two other Buffett quotes are even more telling:

“Trucks are going to be around for a very long time. Who knows when driverless trucks are going to come along and what level of penetration they have?”

“There is nothing that we own that doesn’t have something in the future that might affect it. ... It’s not something I am going to lose sleep over.”

The future always carries unknowns, but Warren Buffett knows the fundamentals that make the liquid fueling industry strong aren’t going away anytime soon.

A good thing for the rest of us to remember, too. 

Alibaba, China’s largest e-commerce company, will open a smart gas station in Hangzhou, China, later this month. According to CaixingGlobal.com, the station will use robotic arms to fuel vehicles and provide an unstaffed convenience store at which patrons may scan a QR code to enter, pick up their items and pay at the checkout gate. By next year, each motorist’s identity, car model and preferred fuel product will be automatically recognized to further expedite and enhance the experience, according to Alibaba.

PEI will present a Purchasing & Inventory Managers Conference in spring 2018. The conference will offer general session and roundtable discussions specifically geared to the needs of purchasing and inventory management professionals. The dates and location of the conference will be announced soon.

If you are interested in serving on the planning committee for the 2018 PEI Purchasing & Inventory Managers Conference, contact Bob Young at byoung@pei.org by Friday, Oct. 20. The committee’s main responsibilities are to develop the roundtable discussion topics and serve as PEI ambassadors during the conference. All committee planning discussions will be held via conference call.

The Michigan Senate voted Oct. 10 to reimburse gas station operators for remediation of underground storage tank (UST) leaks discovered before December 2014. Under current law, operators can be reimbursed only for leaks discovered after that point. The Michigan House passed the measure several months ago, so the bill now moves to Gov. Rick Snyder for signature.

The Pennsylvania Department of Environmental Protection (DEP) will offer approximately $1 million in new grants for the installation of publicly accessible alternative fuel infrastructure projects along major transportation corridors in the state.

According to the DEP, electric vehicle charging stations, compressed natural gas refueling stations and propane refueling stations are eligible for the grants through the state’s FAST (Fixing America’s Surface Transportation) Act. The program will provide up to a 50 percent reimbursement per project, subject to a $500,000 per project cap.

Continental ContiTech
marked the 40th anniversary of its Mount Pleasant, Iowa, manufacturing facility for industrial and automotive hose products on Sept. 30. The 200,000-square-feet facility is about 50 miles south of Iowa City in southeastern Iowa.
E.O. Habhegger celebrated its 90th anniversary Oct. 5. Headquartered in Yeadon, Pennsylvania, the longtime distributor also has branch warehouses in Hammonton, New Jersey, and Orlando, Florida.
Matrix Capital Markets Group announced three promotions in the firm’s Downstream Energy & Convenience Retail Group: Vance Saunders, CPA, managing director and principal; John J. Underwood, managing director; and Carlton C. Zesch, senior analyst.
Dan Murray was named president of Murray Equipment on Oct. 5. He succeeds Steve Murray, who will continue to work on the company’s diesel exhaust fluid storage, dispensing and manufacturing solutions.
Michael von Knorring, European sales manager for Washworld, has retired, the company announced Oct. 10. Since joining Washworld in 2011, von Knorring played a crucial role in building international distributors for the company’s products.

“An explosion at a gas station in Ghana’s capital killed at least seven people
and injured more than 130 others on Saturday, government officials and news reports said. … The explosion is at least the second to rock the capital since 2015. Another explosion at a gas station in the center of Accra killed about 100 people in June of that year.”—New York Times, Oct. 8, 2017
“New York Governor Andrew M. Cuomo announced that the state has seen a 74% increase in electric car sales over the same time period last year, resulting from the Drive Clean Rebate initiative launched on 21 March 2017. … In total, more than $3 million in rebates were provided to New Yorkers for the purchase or lease of 26 different types of cars.”—Green Car Congress, Sept. 29, 2017

North Dakota tank manufacturer.
TrueNorth Steel, 702 13th Ave. E., West Fargo, ND 58078, has applied for manufacturer division membership. Scott Johnson is sales manager for the firm, which was established in 1945. The company manufactures aboveground and underground tanks that are sold through distributors. Sponsored for PEI membership by Jess Robbins, Plasteel, Oceanside, California.
Illinois tool manufacturer. GROZ Engineering Tools Ltd., 655 Wheat Lane, Wood Dale, IL 60191, has applied for affiliate division membership. Alex Unis is vice president of business development for North America for the firm, which was established in 1976. GROZ manufactures handheld lubrication equipment for fluid handling, fuel transfer, lubrication and measurement. Sponsored for PEI membership by Rob Hegg, Fluidall, Delano, Minnesota.
Myanmar installation company. Sein Maung Engineering Co. Ltd., Yadanar Road, Myanmar, has applied for service and construction division membership. Myo Thein is business development director for the firm, which was established in 2010. The company provides installation of equipment for gas stations. Sponsored for PEI membership by Evan Reid, Gilbarco, Greensboro, North Carolina.
Cyprus metering systems maintenance company. Hellenic Technical Enterprises Ltd., P.O. Box 40446, Larnaca, Cyprus 6304, has applied for service and construction division membership. Nicos Vassiliou is the manager of the firm, which was established in 1976. Hellenic Technical Enterprises maintains fuel metering systems. Sponsored for PEI membership by Bill Reichhold, Wayne, Austin, Texas.
Mexico construction company. Quar Construtora S.A. de C.V., Bosque de Ciruelos 130, Bosques de las Lomas, Miguel Hidalgo, Mexico 11700, has applied for service and construction division membership. Jorge F. Quiroz Montero is CEO of the firm, which was established in 1992. The company provides assistance in designing, building and installing equipment for service stations and convenience stores. Sponsored for PEI membership by Bob Patterson, TFCCanopy, Garrett, Indiana.  
Maryland tank and line testing company. Webb Environmental LLC, 835 Baltimore Blvd., Suite C, Westminster, MD 21157 has applied for service and construction division membership. Frank William Webb Jr. is president of the firm, which was established in 2016. The company provides equipment installation and repair, tank and line testing, and dispenser and sump testing. Sponsored for PEI membership by Galen Heaps, PetroSupMD, Elkridge, Maryland.
Florida tank cleaning firm. Tank Wizards Inc., 1511 Masters Road NW, Palm Bay, FL 32907, has applied for service and construction division membership. Wendall Stroderd is president of the firm, which was established in 2013. The company offers tank cleaning, fuel quality assurance programs, fuel tank service and fuel additive sales. Sponsored for PEI membership by Michael E. Clark, PtrTechFL, Deland, Florida.


      Jeff Sexten, XPO Logistics, Ann Arbor, Michigan (O&E)


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© 2017
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. Richard C. Long, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.