National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
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MARKETING & SUPPLY BY KEITHREID An Interview with PEI's Bob Renkes PETROLEUM EQUIPMENT INSTITUTE'S UPDATES AND INSIGHTS state of equipment sales and distributing and some of the equipment-related trends he sees on the horizon. O NPN: How is business going for the equipment manufac- turer, distributor and installer segment of the industry? Renkes: From what I'm hearing, business is good. Not great, but good. It's hard to pick a specific reason for that. For some it is DEF—a lot of tanks are going in the truck stops and commercial accounts. You have some areas where there is renewed retail competition like Florida and North Carolina. There's still a lot of action going on with acquisitions and when that happens, it means business whether it is testing tanks, reimaging, or repairing things. There seems to be enough action on the retail side to keep our members busy. The EPA UST regulations will have an impact. A lot may depend upon who is elected president and how things go, but it looks like they will be coming out next year. NPN: Marketers and retailers are facing a future where you have anticipated demand destruction on one hand, com- bined with a range of new fuel options for the consumer. Obviously, that also impacts the equipment side things. Renkes: It's a very dynamic time. What will that mean? It's certainly not business as usual for our customers. It will be up to the oil marketer to figure out what combination of solutions his customers require and what he will need to fill those requirements and that involves new equipment. Between E15, maybe a little E85, CNG, LNG for refueling for the trucks, a little electric here and there, ultra low sulfur diesel—when you add up the mix, I think that bodes well for PEI members. NPN: There are a few downturns on the equipment side as well, though, for your customers (our readers) that represents an upside. Stage II vapor recovery attainment is the most obvious. Renkes: I would see that equipment fading out one-third at a time over the next three years. I would have thought that 12 SEPTEMBER 2012 N THE EVE OF THE PEI/NACS SHOW, TO BE held in Las Vegas, Oct. 7-10, 2012. NPN Magazine took the opportunity to speak with Petroleum Equipment Institute executive vice president and general counsel Robert Renkes about the everybody would take it out immediately, but some laws have to change and then each marketer will ask when is the right time to take it out? NPN: E15 is a concern for marketers for multiple reasons and it certainly is an issue that has to be addressed on the equip- ment end. What's your perspective on the future of E15? Renkes: The verdict is still out on E15. There are currently two E15 stations in the country. A lot of that depends on what happens politically with the Renewable Fuel Standard, though, both Romney and Obama support RFS2. I did a lit- tle private research last Sunday and counted all the electoral votes in what are considered corn-belt states and there are 126 electoral votes. So I think we're going to have RFS2. NPN: What is the PEI Show looking like as we approach the kickoff? Renkes: Our attendance is up and we've rented more booths than we have in a long time. We're up to 606 (booth spaces) with 217 exhibitors and we've basically sold out with a waiting list. From an attendance standpoint, by next week our numbers should be ahead of our finals for the Chicago show last year. NPN: Your review of the claims of ULSD-related corrosion has been going on for several years now and you've just completed a new study. What are some of the findings? Renkes: As I noted in our recent newsletter, to quote: "Corrosion in systems storing and dispensing ULSD is 'likely' due to the dispersal of acetic acid throughout tank systems. The acetic acid is likely produced by Acetobacter bacteria feeding on low levels of ethanol contamination. The cross contamination could be due to switch loading or manifolded vent systems, although the report urges further study to establish the 'causal link.' Dispersed into the humid—ranging from 72 percent to 95 percent— vapor space by the higher vapor pressure and by distur- bances during fuel deliveries, acetic acid is deposited throughout the system. This results in a cycle of wetting and drying of the equipment concentrating the acetic acid on the metallic equipment and corroding it quite severely and rapidly." NPN Magazine n www.npnweb.com