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March 19, 2018 | Vol. 68, No. 5

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In This Issue

Dear PEI Member:

In the past three months, PEI staff has spoken with—and listened to—hundreds of distributors, contractors, manufacturers and fuel marketers during committee meetings, conferences, regional trade shows and presentations across the country. Thanks to all of you who have been willing to discuss your business, share what is on your mind and offer your thoughts on the future of the industry. Here are the “Top 10” takeaways from these recent road trips.

1.     Tax reform is a big win. Owners of large and small companies alike are excited about the recent federal tax reforms. Lower tax rates and accelerated depreciation will help members reduce debt and increase investments in revenue-producing equipment and people.

2.     Inspection and testing services are booming. With fuel marketers rushing to meet underground storage tank (UST) system compliance deadlines, testing and inspection providers are busier than ever before. But even distributors and contractors that don’t offer these services are benefitting as inspections uncover problems, and test failures drive repair, replacement and maintenance work.

3.     The distributor-to-distributor sales channel is growing. Small and mid-sized distributors increasingly are buying from high-volume distributors to lower their costs, reduce inventory, increase cash flow and boost margins. Because the financial advantages of this strategy are so clear, the trend likely will accelerate.

4.     EMV in the forecourt is coming, but mobile pay is an increasingly intriguing option. With 50 percent or more of dispensers now EMV-ready and software certifications expected soon, outdoor EMV processing will begin to pick up later this year. However, some marketers wonder if promoting mobile payment options might allow them to bypass or at least delay expensive EMV upgrades.

5.     E15’s future is uncertain. Although major chains are testing E15 in select markets, the number of stores selling this higher-level blend remains small. A federal waiver of summertime emission restrictions, which would make possible the year-round, nationwide sale of E15, might accelerate adoption of the fuel, but no one really knows.

6.     Ultra low sulfur diesel (ULSD) remains a frustration. Members are disappointed that after years of discussion and research, ULSD-related corrosion persists. The biggest frustration? Having to tell customers that no solution is in sight.

7.     Electric vehicles (EVs) are a major concern. “How and when will EVs affect fuel marketers’ businesses?” Members asked us this question more than any other. Our answer: Liquid fuels will dominate for years, but EV sales are growing at a faster pace than most observers anticipated even a year ago. In 2017, EVs represented just 1.15 percent of all light-duty vehicle sales in the U.S. Some plausible projections show EVs making significant inroads in the marketplace by 2040.

8.     The industry still needs service technicians. Delaying the outdoor EMV liability shift until 2020 eased the industry-wide service technician shortage a bit. However, with the pace of EMV upgrades accelerating and UST compliance dates rapidly approaching in many states, the need for skilled technical professionals is once again on the rise.

9.     Consolidation is picking up. A growing number of outside investors and strategic industry buyers see the advantages of building a greater distribution footprint. And many distributor owners are at an age where they are receptive to offers to buy their businesses. As a result, more acquisitions and mergers are on the horizon.

10.  Tank replacements are coming. The 30-year anniversary of the 1988 federal UST regulations is a reminder that many of the nation’s USTs soon will reach the end of their 30-year warranty period. Members expect a wave of tank replacements to begin in the next couple of years, although some wonder whether attractive insurance products will be developed to help owners defer replacement.

Updates from the Road

MTBE Litigation Settlement

PEI Scholarship Applications Due March 31

RP400-18 Now Available

PEI to Launch Compensation Survey


Respond to this Newsletter

by e-mail to the editor, Rick Long at rlong@pei.org

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Sunoco, BP and Shell agreed to a $196.5 million settlement with New Jersey for contaminating groundwater throughout the state with methyl tertiary butyl ether (MTBE). In the 1990s, MTBE was widely used to meet the Clean Air Act’s fuel oxygenation requirements. Under the settlement, Sunoco and BP agreed to pay $64 million each and Shell, $68.5 million. New Jersey continues to pursue MTBE-related claims against other chemical manufacturers, gasoline sellers, petroleum refiners and major oil companies, including Exxon Mobil Corp.

Each year, the PEI Foundation provides Charles D. Kemp Scholarships to deserving dependents of full-time employees of PEI member companies. The deadline to apply for scholarships for the 2018-19 academic year is March 31. Visit www.pei.org/foundation to download the complete scholarship guidelines and application form. The site also includes a downloadable flyer that can be posted at PEI member workplaces.

Applicants must plan to enroll as an entering freshman at an accredited four-year college or university. Scholarship awards are based on academic achievement, leadership, character, financial need and the applicant’s intent to contribute to the future of the fuel and fuel handling equipment industry. Email Teresa Farmer at tfarmer@pei.org for more information.

A consortium of Japanese energy and auto companies, including Toyota, Honda and Nissan, plans to open 80 hydrogen fueling stations in Japan by 2022, an effort that would nearly double the number of hydrogen stations currently operating on the island nation. Among all global automakers, Toyota is the most aggressive advocate of hydrogen fuel cell vehicle (FCV) technology; however, the company has sold just 5,000 of its Mirai FCVs since the model’s 2015 launch.

Late last year, PEI invited manufacturers, installers, regulators and other stakeholders to offer suggestions for improving PEI/RP400: Recommended Procedure for Testing Electrical Continuity of Fuel Dispensing Hanging Hardware. With no suggestions received during the 45-day comment period, the PEI Electrical Continuity Testing Committee has released PEI/RP400-18 without any substantive changes to the 2012 edition of the document.

RP400 provides a recommended procedure for testing the electrical continuity of fueling hoses, breakaway valves, swivels, nozzles and other hanging hardware. The document addresses when to test, testing equipment, safe work practices, test procedures, pass/fail criteria, locating and correcting problems and documenting test results. Appendices include a sample form for recording continuity data and a photographic summary of the continuity test procedure.

The single-copy price for PEI/RP400-18 is $40 for PEI members ($95 for nonmembers). To learn more and purchase, visit www.pei.org/rp400.

Two states whose state UST programs have been amended to comply with the 2015 federal regulations have set key compliance deadlines.

  • Georgia. Initial walkthrough inspections, release detection equipment inspections and testing of containment sumps used for interstitial monitoring must be completed by Dec. 15, 2020.
  • Virginia. The deadline for initial walkthrough inspections, release detection equipment inspections and testing of containment sumps used for interstitial monitoring is Jan. 1, 2021.

PEI is partnering with 20 other distributor-based associations on a new cross-industry compensation survey designed to help participants make more informed decisions about their compensation and benefits. The confidential survey will be conducted by Industry Insights, an independent research firm with more than 35 years of experience in conducting confidential compensation benchmarking studies.

Primary contacts of U.S. members in the Distributor and Service & Construction divisions will soon receive additional information and instructions on how to participate. To ensure maximum confidentiality, participating PEI members will submit their information directly to Industry Insights. PEI staff, officers and directors will have no access to any member data.

Compliance Testing & Technology
promoted Ryan Harrigan to operations manager of the company’s eastern region. Harrigan’s 15 years of experience in the petroleum industry include nine years as a technical trainer and five years in sales. The company also hired Jeremy Smith as sales representative. Smith has 24 years of experience in the petroleum and convenience store industry.

Crompco hired Sandy Carl as manager of environmental compliance services. Carl, a former Sunoco performance and compliance specialist, brings more than 35 years of retail fuel experience to her new Crompco role.

Jones & Frank named Wayne Morrison chief financial officer of the company. Morrison joins Jones & Frank after a long career involving financial leadership roles for multiple public and private companies.

SloanLED named Daniel Bunch director of sales, national accounts. Bunch has more than 10 years of sales and operational leadership experience in previous positions with GE Lighting and GE Capital.

“Tesla, the automaker determined to shift the world to environmentally friendly cars, has agreed to pay a fine of $139,500 over excess air pollution
from its Fremont factory. The company, based in Palo Alto, also will install a solar array on the roof of a Boys and Girls Club in San Jose, as part of the settlement with the Bay Area Air Quality Management District.”—San Francisco Chronicle, March 1, 2018
“The vehicles and fuels market will evolve slowly without the influence of a strong external factor, such as policy or regulations, according to John Eichberger, director of the Fuels Institute. Eichberger testified on Wednesday, March 7th, at ‘The Future of Transportation and Fuels’ hearing of the House Energy and Commerce Committee’s Subcommittee on the Environment.”—NACS Daily, March 7, 2018
“In an eastward expansion of the gasoline brand, Andeavor plans to add more than 150 Arco-branded sites in the Dakotas, Wisconsin and Minnesota over the next five years. … Andeavor’s retail marketing footprint includes more than 3,250 stores with fuel under the Arco, SuperAmerica, Shell, Exxon, Mobil, Tesoro, USA Gasoline and Giant brands. More than 1,500 sites in the United States and Mexico are currently branded ARCO.”—CSP Daily News, March 9, 2018
“Fort Myers Buc-ee’s will offer 80 positions, the company said last year. Its planned footprint of 50,000 square feet will dwarf a Love’s Travel Stop in that market. Meanwhile plans for the Daytona unit include 120 pumps on 35 acres. A unit is planned for St. Augustine as well. The plan for that Buc-ee’s to have 120 pumps on nearly 14 acres elicited a petition late last year to stop its building….”—Lundberg Letter, March 9, 2018

Brazilian distribution firm
. Lupus Equipamentos para Lubrificacao e Abastecimento LTDA, Rua Lupo Panelli, 303, Cerquilho, Sao Paulo, Brazil 18520-000, has applied for distributor division membership. Mario Manoel Panelli Filho is CEO of the company, which was established in 1963. The company supplies and works on well-recognized brands in the fuel equipment industry. Sponsored for PEI membership by Gabriel Takayama, Wolflube Equipment LLC, Miami, Florida.

California contracting company. Kern Construction, P.O. Box 6096, Bakersfield, CA 93386, has applied for service and construction division membership. Josh Simmons is vice president of the firm, which was established in 1978. The company is a full-service fuel system general contractor. Sponsored for PEI membership by Bob Mathews, Northwest Pump & Equipment Co., Portland, Oregon.

Tennessee marketing firm. Tindell Marketing LLC, 545 County Road 750, Athens, TN 37303, has applied for affiliate division membership. Bill Tindell is chief manager of the company, which was established in 1998. Tindell Marketing LLC makes and installs fueling site canopies, car wash canopies, building fascia, and atmospheric steel and stainless steel tanks for fuel and oil/water separators. Sponsored for PEI membership by Michael Webb, Duke Hicks Plumbing & Petroleum Inc., Chattanooga, Tennessee.


  • Ditek Surge Protection, Largo, Florida (mfr)
  • C2C Professional Services LLC, Monroe, Virginia (aff)
  • CD Controls LLC, Lavonia, Georgia (aff)
  • Pehlivan Petrol Ekipmanlari San Ve Ticaret LTD STI, Istanbul, Turkey (aff)
  • Central Service Inc., Bend, Oregon (S&C)
  • Delmarva Petroleum Service LLC, Lincoln, Delaware (S&C)
  • Fuel Quality Solutions, Cleveland, Georgia (S&C)
  • Grand Ronde Petroleum Service LLC, Kennewick, Washington (S&C)
  • In Compliance Services LLC, Bethel Island, California (S&C)
  • Mid Valley Contracting Co., Weslaco, Texas (S&C)
  • NanoVapor Inc., The Woodlands, Texas (S&C)
  • River Cities Builders Inc., Greenup, Kentucky (S&C)
  • Salomone Bros. Inc., Wayne, New Jersey (S&C)


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Petroleum Equipment Institute
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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.