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July 13, 2018 | Vol. 68, No. 13

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In This Issue

Dear PEI Member:

On June 28, 2016, Volkswagen (VW) agreed to fund a $2.7 billion mitigation trust to reduce nitrogen oxide (NOx) pollution in the United States. NOx is a primary contributor to harmful ground-level atmospheric ozone.

The $2.7 billion was a relatively small part of the $30 billion or so the auto manufacturer paid to settle claims related to the company’s fraudulent concealment of excessive emissions in nearly 500,000 diesel vehicles sold between 2008 and 2015. However, the mitigation trust may have a more lasting impact on the environment and the future of fueling than all of VW’s other other legal settlements, buybacks and vehicle replacements combined.

Rather than a top-down federally administered program, the trust fund is being allocated among the states. The terms of the trust impose remarkably few restrictions on how the states can spend “their” money. The biggest is that only 15 percent of each state’s fund can be used on electric vehicle (EV) charging infrastructure. Otherwise, each state can direct its allocation toward its individual needs and priorities.

Two years after the trust was formed, most states are still working on their mitigation plans, a process that involves extensive research, drafting and public input. However, here’s a sampling of the strategies in five of the first states to complete their plans:

  • Arizona: $53 million. Replacing or repowering large trucks, buses, freight switchers, ferries/tugs and other vehicles with new diesel, electric or other alternative fuel technologies.
  • California: $381 million. Zero-emission trucks and buses, EV charging stations and emission-reducing technologies at freight facilities, with at least 35 percent of the fund directed toward low-income or disadvantaged communities disproportionately impacted by air pollution.
  • Connecticut: $51 million. Grant awards based on a complicated grid of 16 state-established priorities. At the top of the list: improvements in light-duty diesel vehicle fleets, off-road diesel vehicles and related equipment.
  • Georgia: $58 million. On-road heavy- and medium-duty trucks, buses, non-road equipment, locomotives and commercial marine vessels, plus EV charging equipment in public places, workplaces and multi-unit dwellings.
  • Ohio: $71 million. Replacement or repowering of medium- and heavy-duty vehicle fleets, including buses, trucks, switcher locomotives, tugboats, ferries, and cargo-handling equipment at ports and airports.
  • Minnesota: $47 million. Five separate grant programs for school buses, heavy-duty vehicles, off-road equipment, EVs and EV charging equipment, with 60 percent of the funds going to Minneapolis/St. Paul and 40 percent to the rest of the state.

Volkswagen Diesel Mitigation Trust Update

Missouri Tank Fund Developments

EPA Updates UST Regulation Guidance

PEI Convention Volunteers




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Some of the biggest states—Florida ($152 million); Pennsylvania ($111 million); Texas ($192 million)—have yet to finalize their plans. Even so, the plans that have been completed give an early indication of the ways in which the mitigation funds will be used. The good news? While highly green states like California will place a premium on EVs and other zero-emission technologies, most states are focusing on improving, not replacing internal combustion engine and fueling technologies.

Although U.S. diesel vehicle sales took a hit after the Volkswagen fiasco (2017 sales in the light-duty category were down 19 percent), the VW mitigation trust fund will not spell the end of diesel. To the contrary, the fund may actually improve and extend the life of diesel and other liquid-fueled vehicles, along with the fueling infrastructure required to power them.

Modern high-pressure diesel engines have a higher sensitivity to fuel quality issues. This has led to vehicle warranty claims, infrastructure maintenance issues and new debates about diesel fuel standards.

The Fuels Institute’s Fuel Quality Council is currently evaluating how best to ensure that diesel fuel quality, engine design and fueling infrastructure complement each other.

Thanks to PEI’s membership in the Fuels Institute, all PEI members are invited to participate in a free, 60-minute “Diesel Fuel Quality” webinar July 24 at 3:00 p.m. EDT/2:00 p.m. CDT. John Eichberger, executive director of the Fuels Institute, will provide an overview of the market, the issues and the opportunities in this important area.

To reserve your seat in the webinar, register here.

The Missouri legislature extended the sunset date for the state’s Petroleum Storage Tank Insurance Fund (PSTIF) from Dec. 31, 2020 to Dec. 31, 2025. The legislature also authorized a temporary task force to study the “efficacy, sustainability and administration of the PSTIF, the availability of private insurance, the value of spreading risk via the transport load fee, compliance with federal programs and regulations, and how the PSTIF compares to other states’ programs.” In related news, the PSTIF Board of Trustees recently rejected a proposal to increase the annual participation fee for underground storage tanks (USTs) that are 40 years old or older.

Three days after North Carolina governor Roy Cooper’s June 25 veto of a major regulatory reform bill, the North Carolina legislature overrode his action. Among many other provisions, the now-enacted Act to Provide Further Regulatory Relief to the Citizens of North Carolina allows the testing of all overfill prevention equipment every three years. North Carolina Department of Environmental Quality (NCDEQ) regulations had required annual testing of some overfill prevention equipment.

The U.S. Environmental Protection Agency (EPA) announced two important updates to the technical compendium that accompanies the 2015 federal underground storage tank (UST) regulations. Both relate to spill buckets, under-dispenser containment and containment sumps:

  • Annual walkthrough inspection requirements for sumps. The update makes clear that the federal UST rule requiring an annual walkthrough inspection applies to all operational sump areas, including tank-top and under-dispenser sumps that are not used for interstitial monitoring or are not fully contained. However, some annual inspection requirements will not be applicable in those scenarios.
  • Low-level hydrostatic containment sump testing. The federal regulations accept only one code of practice for hydrostatic containment sump testing, namely the method in PEI/RP1200: Recommended Practices for the Testing and Verification of Spill, Overfill, Leak Detection and Secondary Containment Equipment at UST Facilities. The PEI/RP1200 test requires the owner or operator to fill the sump with water to a depth of at least four inches above the sump’s highest penetration point or sidewall seam. In November 2017, the EPA outlined a package of requirements for an alternative low-water test method it considers no less protective of the environment than the RP1200 method. (See Nov. 28, 2017 TL.) The latest technical compendium update includes guidance on the procedures that should be followed for the low-water test, as well as a sample test compliance form.

The EPA has scheduled a July 18 public hearing in Ypsilanti, Michigan, on its proposed 2019 renewable volume obligations (RVOs) and 2020 biodiesel RVOs. The hearing will begin at 9:00 a.m. Parties desiring to testify must notify the EPA by today, July 13. Additional information on the hearing can be found here.

Through PEI’s Find Red program, members greet and assist attendees at the 2018 PEI Convention, Oct. 7-10 in Las Vegas. Find Red volunteers help the association and the industry by serving an hour or two in areas such as registration, bus drop-off locations, education sessions, breakfasts and receptions. All volunteers and their companies are recognized in the official convention program. For more information or to sign up, visit our Find Red page or contact Teresa Farmer at tfarmer@pei.org.

Tesla has confirmed the sale of its 200,000th U.S. vehicle, making the company the first EV manufacturer to hit that mark. By law, the $7,500 federal income tax credit for purchasers of a given EV manufacturer’s vehicles begins to phase out when the manufacturer reaches 200,000 U.S. sales. As a result, the $7,500 tax credit for Tesla purchasers will drop to $3,750 beginning Jan. 1, 2019, and to $1,875 on July 1, 2019.

Ascentium Capital
opened a new office in Scottsdale, Arizona. The new location is the company’s seventh sales office. Other locations are in California, Michigan (2), New Hampshire, New Jersey and Texas.
Growth Energy named Jennifer Morris vice president of communications and public affairs. She will oversee Growth Energy’s messaging initiatives in support of biofuel producers and supporters across the U.S.
LSI Industries announced that Ron Newbold, president of LSI Lighting, left the company for personal reasons. Crawford Lipsey, who has been chief operating officer, assumed direct responsibility for the Lighting leadership team.
Lucas Ford Associates hired Chris Baird as an associate responsible for petroleum, c-store, automotive and quick-service restaurant products in the Virginia, North Carolina and South Carolina markets.
Stantec named William (Bill) Birney a senior principal and director of engineering, procurement and construction (EPC) projects. Birney has 29 years of experience in the power generation and heavy industrial sectors.
Tanknology is celebrating its 30th year of providing environmental compliance testing and inspection services. The company launched the celebration by unveiling a commemorative website and a new 30-year logo.
Verifone is being acquired by an investor group led by private equity firm Francisco Partners. The deal is expected to close in the third quarter of 2018. Upon closing, Michael Pulli will succeed Paul Galant as CEO.

“2018 is on track for the best GDP growth since 2015.
The unemployment rate is at its lowest level since 2000. … At nine years and counting, it now ranks as the second-longest stretch without a recession of modern times...still short of the 10-year expansion of the roaring 1990s, which it will surpass next year.”—The Kiplinger Letter, June 8, 2018
“By 2022, 35% of all workers will be over 50, versus just 25% of the workforce back in 2002. By 2030, 20% of all Americans will be 65 or older...the age usually associated with retirement.”—The Kiplinger Letter, May 25, 2018
“BMW...has awarded a contract worth just over a billion euros ($1.16 billion) to China’s lithium battery maker Contemporary Amperex Technology Ltd ..., the German carmaker said on Thursday. The deal will allow China’s biggest lithium battery maker to build a factory to produce cells for electric cars in Europe, BMW spokesman Glenn Schmidt said.”—Reuters, June 28, 2018

Betty Moore
, 84, died July 1. She and her husband Banks Moore purchased the Fresno, California-based distributor known today as Banks & Co. in 1979. Betty served as the company’s bookkeeper until her retirement in 2003. She is survived by husband Banks; sister Wanda Marr; children Bill and Linda Moore, Susan and Brad Avery, John and Patti Moore; five grandchildren and six great-grandchildren.

Bolivian manufacturer.
PetroBox, Av. Principal y Calle 7 - Edif Jorori Norte - 1er Piso, Santa Cruz de la Sierra, Bolivia, has applied for manufacturer division membership. German Pablo Gentile is CEO of the company, which was established in 1995. PetroBox manufactures fleet management systems, inventory management systems and tank monitors, which are sold through distributors. Sponsored for PEI membership by Jesus Ildemarco Cogley Quintero, Petrocsa, Veraguas, Panama.


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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.