May 30, 2019 | Vol. 69, No. 11

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Dear PEI Member:

More than 150 fuel marketers, automakers, fueling equipment manufacturers, distributors, service contractors and trade association professionals gathered last week in Dallas for Fuels2019, the annual conference of the Fuels Institute.

The presenters, panelists and attendees didn?t always agree ? but, collectively, the content and conversations in Dallas provided valuable insight into the future of fuels and fueling in the U.S. Here are my observations and perspectives on the topics of greatest interest to PEI members.

E15 is coming. Discussions about ethanol blends in general ? and E15 in particular ? were among the most contentious of the conference. Some attendees expressed concerns about corrosion in ethanol fuel storage systems. Others pointed out the difficulty of ensuring that existing fueling systems are compatible with E15.

However, the overall impression was that the future of E15 is bright. With the U.S. Environmental Protection Agency (EPA) ready to waive summertime Reid vapor pressure requirements for the blend, the nationwide, year-round sale of E15 soon will be legal. When that happens, major convenience stores are ready to begin marketing the fuel as a clean, affordable, domestically produced, higher-octane option. The ongoing rebranding of E15 as ?Unleaded 88? also should boost consumer interest and confidence.

E15 won?t supplant E10 as the nation?s primary light-duty vehicle fuel, but it will gain a greater market share than E85.

Internal combustion engines (ICE) will continue to dominate. According to the Department of Energy, no light-duty vehicles produced in 1975 achieved fuel economy above 30 mpg. By the 2018 model year, 27% had reached that level. Although incremental improvements in ICE engine efficiencies will continue, dramatic gains are unlikely because vehicle manufacturers are shifting their research and development focus to electric vehicles (EVs). General Motors? February layoff of 4,300 workers and Ford?s May 20 elimination of 7,000 jobs were concentrated on the ICE side of their businesses.

The Future of Fuels

RP1200 Comment Period Ends June 15

PEI Convention Early Bird Closes Tomorrow

OSHA May Revise Lockout/Tagout Standard

Updates from the States




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All that being true, ICE vehicles will dominate for years to come. According to even the most conservative estimate presented at the conference, 67% of the world?s vehicles still will be ICE-powered in 2040.

EVs will be big ? but when? There is little doubt that EVs will gain a major place in the market. But technical, sociological and business variables will determine the pace and scope of EV adoption. Among the questions to be answered are these:

  • Batteries. EV battery cost has declined an average of 20% per year since 2011, thanks to consistent engineering improvements. According to John Farrell of the National Renewable Energy Laboratory, the next major reductions will require advances in battery chemistry, which will be difficult to achieve and even more difficult to commercialize.
  • Public vs. private. Should public utilities or private businesses control the nation?s EV charging network? If utilities win the battle, will the cost be paid through utility customers? rate base or some targeted usage model? If private enterprise rules, what is the business model for success? Currently, no private EV charging network is profitable.  
  • Gas taxes. States have used gasoline taxes to build and maintain roads and bridges since the 1920s. The federal gas tax, enacted in 1933, has served a similar purpose for the nation?s interstate transportation infrastructure. As the U.S. moves toward EVs, what will replace the lost gas tax revenue? Road usage fees? Additional taxation of ?environmentally unfriendly? gas and diesel vehicles? Something else altogether? No obvious solution has emerged. 
  • Metering, charging and payment. Drivers of today?s ICE vehicles can pull into any gas station, fill up their tank and quickly charge the fuel purchase. In contrast, today?s EV charging network is a confusing patchwork of different equipment types and payment models. For EVs to become a practical anytime-and-anywhere transportation solution, consistent nationwide metering, charging and payment models will be required.
C-stores will evolve and consolidate. Some Fuels2019 participants predicted c-stores will evolve into food-centered destinations suited to lengthier EV charging. Others advocated new business models to make c-stores less dependent on ?gas and cigarettes.? However, most attendees agreed that c-store consolidation will accelerate as demanding regulatory requirements and expensive technology upgrades force small operators to sell or close.

Commercial trucking fleets have options. Medium- and heavy-duty trucking fleets can select the fueling systems that best meet their individual needs. Diesel will continue to dominate in many applications. But other types of fueling systems are finding their niches, as well. For example, UPS?s fleet now includes more than 10,000 alternative fuel and advanced technology vehicles:
  • 696 hybrid electric
  • 371 battery-powered electric
  • 2,449 propane
  • 4,810 CNG
  • 1,352 LNG
  • 91 hydraulic hybrid
  • 398 composite diesel
  • 79 ethanol
UPS is even giving heavy-duty hydrogen fuel cell trucks a look. (If you want to know why, check this video of a Toyota fuel cell semi accelerating to 60 mph in about 7 seconds.)

The future of fueling will involve complicated decisions throughout the supply chain. As Mike Casteel, director of fleet procurement for UPS, said, ?Environmental sustainability is great, but the vehicles have to be economically sustainable, too. The numbers have to make sense.?

RP1200 Comment Period Ends June 15.
Just over two weeks remain in the 30-day comment period for draft revisions to RP1200: Recommended Practices for the Testing and Verification of Spill, Overfill, Leak Detection and Secondary Containment Equipment at UST Facilities. (See May 16, 2019 TL). The proposed revisions add low liquid level containment sump testing procedures to Chapter 6: Spill Bucket and Containment Sump Testing. To review the draft revision and submit your comments, visit Comments must be submitted online by June 15.
PEI Convention Early Bird Registration Closes Tomorrow. May 31 is the last day to take advantage of early bird and group registration rates for the 2019 PEI Convention at the NACS Show, Oct. 1-4, in Atlanta. Attendee registration through tomorrow is $295 for PEI members and $495 for nonmembers. Rates increase to $445 for members and $645 for nonmembers on June 1. On-site registration is $595 for members and $795 for nonmembers.
PEI Board Elections. The election process for the 2019-2020 PEI board of directors begins this week. Under PEI?s election procedure, the official representative of a PEI member company or a duly appointed alternate who wishes to run must request that his or her name be included on the ballot. Tomorrow, PEI will email instructions for doing so to official representatives from the odd-numbered distributor and manufacturer districts, as well as the service and construction division. The completed ?Put My Name on the Ballot? form must be submitted to PEI by the close of business Wed., June 19.

The Occupational Safety and Health Administration (OSHA) is requesting comments on a possible update to the Control of Hazardous Energy (Lockout/Tagout) standard. The current lockout/tagout standard requires controlling all sources of energy with an energy-isolating device during service and maintenance. The standard also specifies that control circuit devices cannot be used as energy-isolating devices.

According to an OSHA press release, the agency ?is requesting information about how employers have been using control circuit devices, including information about the types of circuitry and safety procedures being used; limitations of their use, to determine under what other conditions control circuit-type devices could be used safely; new risks of worker exposure to hazardous energy as a result of increased interaction with robots; and whether the agency should consider changes to the ... standard that would address these new risks.?

Interested parties may submit comments via fax, mail or at by referencing Docket No. OSHA-2016-0013. Comments must be submitted by Aug. 19. Additional details are in the official OSHA Request for Information in the Federal Register.

Rep. Earl Blumenauer (D-Ore.), a senior member of the Ways and Means Committee, introduced legislation to increase the federal gas tax 25 cents over five years and then index the tax to inflation in future years. Without providing specifics, the ?Rebuild America Act of 2019? also states that "... by 2029 the gas tax should be repealed and replaced with a more sustainable, stable funding source." Blumenauer previously has proposed legislation to replace the gas tax with a fuel-neutral, mileage-based user fee.

The State Water Resources Control Board extended to July 1 the deadline for comments on proposed underground storage tank (UST) biodiesel regulations. Additional information on the proposed rulemaking and instructions for submitting comments can be found here.
Colorado. New procedures for reimbursement of UST removal costs took effect May 17. Owners and operators seeking reimbursement must submit the required application within 90 days of the tank?s removal. Tanks installed before Aug. 1, 2008, are eligible.
Illinois. State Sen. Martin Sandoval introduced legislation to increase the state?s gasoline tax from 19 to 44 cents per gallon, with additional inflation adjustments in the future. The bill also would raise the EV registration fee from $35 every two years to $1,000 every year. The intent is to raise money for state infrastructure projects.
Nevada. Gov. Steve Sisolak signed legislation to exempt heavy-duty electric trucks from weight limits on state roads. The governor also signed a bill to reimburse school districts for up to 75 percent of the cost of electric school buses and charging infrastructure.
Pennsylvania. The state approved $660,000 in grants for EV fast-charging stations in Allegheny, Butler and Washington counties. The state also added 560 more highway miles to its Alternative Fuel Corridor (highways with EV charging stations every 50 miles and compressed natural gas (CNG) fueling stations every 150 miles).

Franklin Fueling Systems
President Jay Walsh was appointed a vice president and executive officer of the company?s parent, Franklin Electric Co. Inc. Walsh will continue to serve as president of Franklin Fueling Systems.
METCO named Brian Hora executive vice president. Hora joined METCO in 1994 as a construction crew member. Since 2005, he has been general manager of the company.
Performance Ink was acquired by Elder Rubber Inc. of Dallas, Texas. According to a press release, the sale will allow Performance Ink to offer new products and expand its engineering and manufacturing capabilities. The company will continue to operate out of its Columbia, South Carolina headquarters under the Performance Ink brand.
Seneca Companies is partnering with ChargePoint to offer EV charging solutions through Seneca?s offices in the Midwest, South and Mountain regions of the U.S.

Colorado service contractor.
Don?s Maintenance Service, 1124 31st Ave., Greeley, CO 80634, applied for service and construction division membership. Brandon Fagerberg is vice president of the company, which was established in 1978. Don?s Maintenance Service provides services for point-of-sale systems, automatic tank gauges, aboveground storage tanks (ASTs), USTs and dispensers. Sponsored for PEI membership by Melissa Fox Hadley, The Pinnacle Corp., Arlington, Texas.
Vermont engineering firm. Bannon Engineering, P.O. Box 171, Randolph, VT 05060, applied for affiliate division membership. Mark Bannon is the representative of the company, which was established in 1997. Bannon Engineering does engineering consulting for fuel vendors, tank owners and other users. Sponsored for PEI membership by Roy Creley, Lakes Region Environmental Contractors, Belmont, New Hampshire.

  • Admiral Enterprise Solutions, Marietta, Georgia (service & construction)
  • Haydin Electrical Services, West Bend, Wisconsin (service & construction)
  • Image Builders, Owasso, Oklahoma (service & construction)
  • CalTech Industrial Corp., Irvine, California (affiliate)
  • ESM Fuel Solutions SA DE CV, Zacatecas, Mexico (affiliate)
  • Fuel Purification Systems, Richmond, Virginia (affiliate)
  • Service First Processing,  Boynton Beach, Florida (affiliate)
  • Sino Polymer Co., Ltd., Shanghai, China (affiliate)
  • SMART Software, Effingham, Illinois (affiliate)
  • Soltech LLC, Emeryville, California (affiliate)
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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.