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Petroleum Equipment Institute

The international trade association which is now known as the Petroleum Equipment Institute (PEI) was formally organized at a meeting held in Louisville, Kentucky on May 14-15, 1951.

Principal planners of the meeting were J. M. Newberry, Memphis, Tennessee, and Fred G. Coffield Jr., South Bend, Indiana. Both men had served in the U.S. Navy during World War II, Coffield as a fighter pilot and Newberry in PT boats. Both were second generation owners of oil marketing equipment and service firms. Both felt an urgent need for a national organization which would enable owners of similar companies, throughout the United States, to exchange ideas and improve their management skills.

Coffield and Newberry were not acquainted, and by coincidence in 1951, both began independently organizing a national trade association for local stocking suppliers of oil marketing equipment. Eventually, they were put in touch with each other by A. W. Boulton, then associate publisher of National Petroleum News. Boulton also became interested in the prospects for a national association of oil equipment jobbers, and actively promoted formation of the proposed organization in the pages of his magazine. (In this period, local suppliers of oil marketing equipment, who maintained warehouse stocks, were called jobbers. The term distributor, which is currently used, did not come into wide-spread usage in the industry until the mid-1960s.)

A steering committee was formed in early 1951 to lay plans for an organizational meeting. In addition to Newberry and Coffield, it included owners of three other oil marketing equipment supply firms; H. R. Tuller, Columbus, Ohio; Eugene de Penaloza, St. Louis, Missouri; and C. L. McBride, Louisville, Kentucky.

Approximately 50 persons gathered at the old Brown Hotel in Louisville for the organizational meeting. At the end of two days they had adopted a constitution and bylaws, elected a board of directors, and made plans for the first annual convention of the new group, to be held the following September in St. Louis.

The new organization was called the National Association of Oil Equipment Jobbers (NAOEJ). It was conceived by equipment jobbers, planned for equipment jobbers, and intended primarily as an association for equipment jobbers. From the beginning, however, provision was made for associate membership by oil equipment manufacturers who marketed products through local stocking jobbers. A manufacturers liaison committee was created to allow manufacturer members to make known to the NAOEJ board the views of associate members.

Newberry, who had presided at the Louisville meeting, was elected as the first president of the new organization, and Coffield was elected vice president; de Penaloza was named treasurer; Tuller was appointed secretary.
NAOEJ was incorporated as a not-for-profit trade association in the state of Tennessee. Membership dues were established at $120 a year.

Newberry took it as an article of faith that the new organization could not survive unless it had a full-time managing executive and a permanent headquarters office. Within weeks after the organizational meeting in Louisville, he set about locating a paid manager. The man ultimately hired by the board at the 1951 convention in St. Louis was Howard Upton, also a World War II naval officer, who had been serving since 1948 as a staff attorney for a national petroleum refiners association headquartered in Tulsa, Oklahoma. In those days, Tulsa still bore the title of “Oil Capital of the World.”  For this reason, and also because there was not enough money in the NAOEJ treasury to relocate the new staff employee to another city, it was determined by the board of directors that Tulsa would be the location of the organization’s headquarters office.

On October 1, 1951, Upton opened the association’s first office in a ten-by-ten square foot room on the 14th floor of Tulsa’s Hunt Building. The staff included himself and a typist. Total membership consisted of 79 companies. There was less than $4,500 in the association’s bank account, and before another year had passed several of the charter members voluntarily prepaid their dues to keep the association afloat.

Newberry, who had been elected as the first president of the association at the organizational meeting in Louisville, was reelected to that position six months later when NAOEJ held its first annual meeting in St. Louis. He was succeeded, after having served as president for 18 months, by John Quilter of Richmond, Virginia. Quilter, also an ex-Navy officer, served continuously as an officer or director of the association from 1951 until 1966, and served a second term as president in 1964.

Many new trade associations flounder because the members seek to use the organization as a coercive weapon--as a device for gaining price concessions or other advantages in the marketplace through tactics of intimidation. When these ploys fail, the reason for the existence of the association appears to have failed as well. Thanks to the foresight of its early officers, NAOEJ avoided this fate. Newberry, in particular, repeatedly insisted that the purpose of the association was "to make us all better businessmen."  

The major emphasis of the new organization was on positive programs. By the mid-1950s the association was holding management institutes on the campuses of Georgia Tech, Ohio State, and the University of Oklahoma. The annual trade show was inaugurated in 1952. The Petroleum Equipment Directory, now sometimes referred to as the “bible” of the marketing equipment industry, was launched in 1954. The Tulsa Letter, the association’s widely read newsletter, began publication in 1951.

The new organization soon took on an international flavor. In 1955, R.N.G. Oil Equipment Company Limited, Montreal, became the first member company outside the United States. By the end of the decade other petroleum equipment distributors in Cuba, Canada, and Venezuela had joined.

The year 1966 was a turning point in the association’s history. Although total membership had reached 300 companies, 114 of these firms were associate (manufacturer) members. Foreign membership was continuing to increase, and the annual convention was being attended by scores of individuals--installation contractors, manufacturer representatives, etc.--who were not eligible for membership. NAOEJ was becoming, in fact if not in name, the international association for the oil marketing equipment industry.

At the 16th annual convention, held at the Pick-Congress Hotel in Chicago in 1966, the board of directors recommended to the membership that this new status be recognized. The board proposed that the name and structure of the association be altered. The recommendations were approved. NAOEJ became the Petroleum Equipment Institute. Manufacturer members were admitted to voting membership, and the board, which previously had been composed exclusively of distributors, was restructured to provide for nine distributor members and four manufacturer members. A new affiliate division was created to permit membership by non-distributor and non-manufacturer equipment firms.

Although NAOEJ had been converted to PEI, it was still considered to be primarily a distributor-oriented organization, and the purposes of the association, as set forth in the original 1951 constitution, were retained.
In 1970 the U.S. Environmental Protection Agency was created by Congress, heralding the beginning of almost four decades of regulation in petroleum marketing operations. The years that followed marked the introduction of unleaded gasoline, gasoline vapor recovery, spill control legislation, underground storage tank standards, and scores of other regulations which had great impact on petroleum equipment suppliers and their customers.

Primarily because PEI has become an authoritative source of information on regulations, membership increased dramatically in the 1970s--from 336 companies to 800. In addition to the United States and Canada, countries represented in PEI at the end of the decade included Argentina, Belgium, Brazil, Denmark, England, Finland, France, Guatemala, Hong Kong, Ireland, Japan, Mexico, New Zealand, Nicaragua, Peru, Sweden, Switzerland, Venezuela, and West Germany.

In 1976, PEI purchased and occupied its first headquarters building at 3739 East 31st Street in Tulsa. Staff occupied this nine-room, 2,400 square foot building until July 1989. At that time PEI purchased a 6,400 square foot building located at 6514 East 69th Street, about six miles from the previous headquarters. At that time, the PEI staff consisted of 9 employees with an average tenure at PEI of 15 years.

With the advent of the underground storage tank regulations in the mid-1980s, PEI saw an above-average rate of growth, particularly with the publication of Recommended Practices for Installation of Underground Liquid Storage Systems which placed the association in the position of representing storage system installers, since no other group existed at that time to speak for their interests. Now, with published recommended practices on proper aboveground tank installation and installation and testing of vapor recovery systems, PEI has achieved some notoriety with regard to these issues. As a result, installation contractors and environmental firms have joined PEI in record numbers, quantitatively strengthening an affiliate division membership which now exceeds that of the distributor division. In August 1999, membership peaked at 1,644 companies located in 68 countries. Once tank owners complied with the 1998 regulatory deadline, members’ business began to fall off and so did membership in the association. As of July 31, 2008, corporate membership totaled 1,558 companies.

PEI established an Operations and Engineering Division in 2001. Membership in the O&E Division is available to people employed by a company that owns and/or operates facilities that store, transport, meter, and/or dispense petroleum products. Memberships are by individual, not company, and include such people as oil company operations and engineering executives. There are 109 members in the O&E Division as of July 31, 2008.

In 2008, as the number of members in the Affiliate Division exceeded the Distributor Division due to the number of service and installation companies becoming members, PEI established a Service and Construction Division. The division was populated by transferring members from the Affiliate Division based on their descriptive paragraph in the current PEI Directory or their original application. Currently, there are 360 members in the Service & Construction Division and 269 in the Affiliate Division.

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