November 6, 2018 | Vol. 68, No. 21
Dear PEI Member:
When it comes to vehicle fuels, the U.S. is in the early stages of a major, if as yet undefined, transition. To prove the point, here’s a summary of major fuel-related developments since our Oct. 17 TulsaLetter—less than three weeks ago:
E15. The U.S. Environmental Protection Agency (EPA) issued the timeline for its rulemaking to allow nationwide, year-round sales of E15. According to the plan, the rule could be in place by summer 2019. Several major retailers quickly announced they will consider adding E15 when the rulemaking is complete.
The American Petroleum Institute (API), however, signaled it might challenge year-round E15 sales in court. API also released a nationwide survey it said shows widespread concern E15 will lead to misfueling, engine damage and increased consumer costs. The Renewable Fuels Association (RFA) called the survey nothing more than a “push poll,” with the questions slanted to ensure the answers API wanted. RFA then released its own study showing that E15 is approved for use in more than 93 percent of all 2019 model cars.
Renewable Fuel Volumes. The EPA sent its 2019 renewable fuel volume obligations (RVOs) to the White House. The total renewable fuel target is 19.86 billion gallons, an increase of 590 million gallons over 2018. The EPA also announced the timeline for a new rulemaking to reset total renewable fuel volume targets for 2020 to 2022.
Electric Vehicles (EVs). General Motors (GM) proposed that all U.S. car manufacturers dedicate 7 percent of their new car output to EVs by 2021, and 25 percent by 2030. Honda and GM urged the administration to abandon its proposed rollback of fuel economy standards. And GM released plans for an e-bicycle designed to ease urban transportation gridlock.
Outside the U.S., Britain’s Department of Transport cut subsidies to EV purchasers. Effective Nov. 9, plug-in hybrid subsidies will be eliminated and pure EV subsidies will be reduced by 22 percent. Just two months ago, Britain declared its intent to ban the sale of new gasoline- and diesel-powered vehicles by 2040.
by e-mail to the editor, Rick Long at firstname.lastname@example.org
or join the discussion in the Petroleum Equipment Forum
Other Alternative Fuels. The United States Council for Automotive Research (USCAR), a collaborative effort of major U.S. car manufacturers, neared completion of a proposal to require higher-octane fuel in all new gasoline-powered vehicles by 2023. If such a move occurs, dispensing equipment will have to be configured to prevent misfueling of legacy vehicles.
Again, all of these developments occurred in just the past three weeks.
At this stage, it’s too early to draw any conclusions about what’s ahead. The signs are inconsistent. Rapid growth in E15—or not? More renewable fuels—or less? Significantly more EV sales? Higher octane fuel? Where we are headed and when we will get there (wherever “there” is) remains unclear.
So, how should PEI distributors and service contractors respond during this transitional time? I offer three simple suggestions.
1. Expect and plan for change. In one way or another, fueling and fuel handling equipment will evolve. The past we have known will influence the future, but it won’t define it. So, build flexibility into your plans. Network with and learn from fellow PEI members. Devote time and money to developing your strategies. Keep your options open.
2. Steer customers toward strategic investments. Fuel retailers are experiencing exceptional profitability. Many have money to upgrade and expand. When appropriate, encourage equipment and technologies that will position their businesses for the future, not the past: storage and dispensing equipment capable of handling E15; site plans that allow for the addition of EV charging equipment; payment systems that can be upgraded as new means of payment become more common.
3. Diversify. Even as EMV upgrades, tank closures and regulatory compliance work boost traditional retail fueling revenue, forward-looking distributors and contractors are creating new revenue streams. Data from the State of the Industry presentation at the 2018 PEI Convention shows traditional retail fueling work is declining as a percentage of distributors’ and contractors’ total sales—from 56 percent of total revenue in 2017 to 52 percent this year. Even more telling, an impressive 72 percent of distributors and contractors are at least open to installing and/or servicing EV charging stations.
LIMITS MOBILE FUELING
How Distributors Should Respond to Amazon Business (Dec. 4-6, Denver). With Amazon Business on track to achieve $10 billion in sales this year, how should PEI distributors respond? This cross-industry forum presented by Modern Distribution Management will explore how to leverage Amazon's massive platform while differentiating and protecting customer relationships. PEI members receive a $100 discount by using the promotional code "MDMA" on the registration form. The early bird deadline is Friday, Nov. 9.
UST Installer Training (Dec. 7, Winchester, Virginia). For licensed Maryland underground storage tank (UST) technicians who need to meet their 2018 continuing education requirements, PEI is offering an eight-hour installer refresher course. For details, contact Melinda Whitney at email@example.com or 918-236-3977.
PEI Young Executives Winter Conference (Feb. 6-8, Long Beach, California). Spend two days on the Queen Mary with other emerging leaders. This year’s event includes a panel of industry legends discussing “What Worked and What I’d Never Do Again,” as well as a session on the disruptive forces impacting our industry, including EMV, EVs, mobile fueling and service-as-a-subscription distribution programs.
University of Innovative Distribution (UID), (March 10-13, Indianapolis). Now in its 25th year, UID is the premier educational program for wholesale distribution industry professionals. CEOs, branch managers, sales and marketing professionals, inventory managers, operations staff and other professionals can choose from more than 40 classes to design a schedule perfectly suited to their needs. PEI is offering $600 scholarships to the first 30 members who register. To receive the scholarship, select “Association Member” as your Registration Type on the online registration form and enter “PEI19” in the Promo Code section.
CONVENTION PRESENTATIONS AVAILABLE
Pennsylvania construction company. Total Tank Works, P.O. Box 303, East Butler, PA 16029, applied for Service and Construction division membership. TJ Tosadori is owner of the firm, which was established in 2016. Total Tank Works is a sales, service, construction and compliance provider for UST and aboveground storage tank (AST) systems. Sponsored for PEI membership by Craig Smith, Francis Smith & Sons Inc., Scott Township, Pennsylvania.
Philippines service company. Joytrade Industrial
Marketing, 9B Charity St., Teresa Village, BGY, Bahay Toro, Quezon City,
Metro Manila, Philippines, applied for Service and Construction division
membership. Vicente Basa is general manager of the firm, which was
established in 2004. Joytrade Industrial Marketing services dispensers and
other gas station equipment. Sponsored for PEI membership by Amos Hu,
Hongyang Group Co. Ltd., Wenzhou, Zhejiang, China.
distributor. SYZ Colombia SAS, Aut. Medellin KM
7, LT 7, LC 5, Funza, Cundinamarca, 250027, Colombia, applied for
Distributor division membership. Carlos Zambrano is president of the firm,
which was established in 2004. SYZ Colombia SAS represents manufacturers of
equipment for the storage, consumption and delivery of crude oil, fuel,
biofuels and lubes. Sponsored for PEI membership by Shawn Kiefer, Total
Control Systems, Fort Wayne, Indiana.
affiliate. TesTank Inc., 117 S. Hampshire,
Saginaw, TX 76179, applied for Affiliate division membership. Rodney Dwaine
Saltkill is president of the company, which was established in 1992. TesTank
Inc. performs testing, inspection, investigation and compliance services for
UST and AST systems. Sponsored for PEI membership by Steven Magallanes, C &
L Pump Service Inc., El Paso, Texas.
affiliate. Green Enviro Machine LLC, 2366
Algonquin Rd., Schenectady, New York 12309, applied for affiliate division
membership. Janice Lachman is founder of the firm, which was established in
2009. Green Enviro Machine manufactures a self-service nitrogen tire
inflation system. Sponsored for PEI membership by Patrick Vuchetich,
Williams & Company Consulting Inc./Petro Classroom, Kansas City, Missouri.
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