Fuels Market News Fall 2023 by Fuels Market News

FALL 2023

SUSTAINABLE AVIATION FUELS Various approaches look to reduce the costs of sustainable jet fuel while maintaining performance

In the Lead Douglass Distributing’s Bill Douglass

Fuels ‘23 What to expect from a Transportation Energy Institute meeting

FALL 2023

30 Sustainable Aviation COVER STORY

Fuels

Various approaches look to reduce the costs of sustainable jet fuel while maintaining performance.

In the Lead: Bill Douglass

Douglass is an industry icon who has spent his life fueling the vehicles of North Texas.

40 A Look at Fuels ’23

What to expect from a Transportation Energy Institute meeting.

FuelsMarketNews.com

FMN Magazine FALL 2023 | 1

04 From the Editor 06 NACS News 08 Transportation Energy Institute 10 Fueled for Thought RETAILER OPERATIONS 12 Are You Up to Date?

How to leverage Internet technology for better UST compliance.

16 The Human Touch

Drive loyalty and engagement by connecting with your customers.

18 What About Hydrogen

his transportation fuel has a potential role in a T zero-carbon future, but what about retail?

COMMERCIAL FUELS 20 Trucking Into the Future

A range of environmental regulations put significant pressure on the critical trucking industry.

FUEL MARKETERS 24 C ommunications Breakdown

Established behavioral techniques can improve business operations and the office environment.

26 Brand in Focus: CITGO

Customer focus is the underlying value for its brand partners.

26 2 | FMN Magazine FALL 2023

46 Industry News 48 Remember This? FuelsMarketNews.com

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FROM THE EDITOR EDITORIAL

An Industry of Leaders Bill Douglass of Douglass Distributing is featured in this issue’s In the Lead. The goal of In the Lead is to highlight industry players, from rack to retail, who have achieved significant accomplishments and/or are helping move the industry forward. Bill has been an industry leader through his work with various organizations and has a compelling personal story of his transition from an Exxon company rep to a wholesaler, convenience retailer and DEF manufacturer and distributor. I have interviewed Bill several times over the past 20 years on various topics and learned about his history and that of his operation, which is currently being co-managed by his son Brad and daughter Diane. However, we had never discussed the nuance of how he built his business, which I found extraordinarily interesting and unique, but at the same time a story that embodied the driving spirit of the industry. The article goes into detail, and I don’t want to steal its thunder, but let’s just say Bill Douglass has had a solid insight into what his customers are looking for in their retailing and fueling experiences and has been willing to try numerous things (such as cash acceptors at the dispenser and televisions in the food service booths) to exceed customer needs and expectations. Some of these worked out better than others, and some that worked out well ran their course as time passed and were replaced by new approaches. Bill is very humble about his operation, but the insight he put into building it and his own capabilities as an innovator and leader are apparent. However, that is really the story of our industry. Since the automobile

4 | FMN Magazine FALL 2023

age dawned and fuel retailers realized there were a lot of opportunities once the customer made the stop for profit and success whether you’re selling a lube job, automotive service, a cup of coffee or a take-home meal for a busy family. But there is also competition. An operator needs to figure out how to be the destination of choice for the customer. This can involve a high degree of creativity and special offers, a focus on executing the basics to an exemplary level, or both. The innovation possible within this industry will be on full display when this issue of FMN hits the publication bins at the 2023 NACS Show, October 4-6 in Atlanta, Georgia. In addition to a trade show featuring just about everything a convenience store or fueling site operator could possibly want to incorporate into their business, the event features a solid block of education sessions that cover the breadth of industry operations. If you get the chance, visit FMN’s Fuels Innovator of the Year Award, scheduled for Wednesday, October 4 at 8:00 a.m. This year’s winners are Sheetz and OnCue Express. Come hear how these industry leaders have excelled with their operations.

Keith Reid Editor-in-Chief (847) 630-4760; kreid@fmnweb.com Ben Nussbaum Editorial Director (703) 518-4248; bnussbaum@convenience.org Lisa King Managing Editor (703) 518-4281; lking@convenience.org CONTRIBUTORS Lori Buss Stillman, Mrinaleni Das, John Eichberger, Beau Eng, John Kimmel, Dr. Vikram Mittal, Joe O’Brien, Allen Schaeffer, Dr. Raj Shah, Roy Strasburger, Ben Thomas DESIGN Imagination, part of The Mx Group www.imaginepub.com Cover image by Dudaeva/Shutterstock

ADVERTISING Ted Asprooth (847) 222-3006; tasprooth@convenience.org

PUBLISHING Stephanie Sikorski Publisher (703) 518-4231; ssikorski@convenience.org Nancy Pappas Marketing Director (703) 518-4290; npappas@convenience.org Logan Dion Digital Ad and Media Trafficker (703) 864-3600; production@convenience.org

EDITORIAL COUNCIL RETAILER/MARKETER MEMBERS Mark Fitz, president, Star Oilco; Derek Gaskins, chief marketing officer, Yesway; Jeff Reichling, general manager of fuel, Kwik Trip Inc.; Jim Weber, executive vice president of merchandise and marketing, The Spinx Company VENDOR/SUPPLIER MEMBERS Regina Balistreri, director of marketing, ADD Systems; Joe O’Brien, vice president of marketing, Source North America Corporation; Kaylie Scoles, marketing director, RDM Industrial Electronics Inc.; Jen Threlkeld, product marketing manager, Dover Fueling Solutions Fuels Market News Magazine is published quarterly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscription Requests: circulation@fmnweb.com POSTMASTER: Send address changes to Fuels Market News Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA.

Keith Reid is the editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb.com.

1600 Duke Street, Alexandria, VA, 22314-2792 PUBLISHED BY

FuelsMarketNews.com

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07-25-2023

NACS State of the Industry Enterprise Helps Businesses Soar 1969 $412.1 billion

TOTAL FUEL SALES

$242.2 billion

153,237 STORE COUNT

TOTAL INSIDE SALES

State of the Industry Report® of 2018 Data

165 million

CUSTOMERS PER DAY

2.36 million

$11.0 billion

TOTAL EMPLOYEES

TOTAL PRETAX INCOME

Prepared Exclusively for NACS Research ***Duplication Prohibited***

2019 5 0 TH ANNIVERSARY

EDITION

State of the Industry Report® of 2019 Data

of 2020 Data

of 2021 Data

of 2022 Data

The NACS State of the Industry enterprise is the convenience and fuel retailing industry’s leading research entity. By engaging with convenience retailers throughout the United States, the NACS Research team collects, aggregates, presents and provides commentary on operational and financial industry metrics and trends. NACS STATE OF THE INDUSTRY REPORT Published every year since 1972, the NACS State of the Industry Report is the convenience and fuel retailing industry’s premier benchmarking tool and the most comprehensive collection of data and trends. Retailers rely on the report to improve their operations and better understand what’s driving key performance metrics. NACS State of the Industry Report® of 2022 Data is available now. This report is available in a digital version as well as a print version for NACS members only. STATE OF THE INDUSTRY DATA ARCHIVE NACS has imported all the data from the past 10 years of the NACS State of the Industry Report into a searchable database. The NACS State of the Industry Data Archive is now available online via subscription to NACS Members only.

NACS STATE OF THE INDUSTRY COMPENSATION REPORT This report provides the most recent convenience human resource benchmarking data available, highlighting the key categories of compensation, turnover, benefits and recruitment. The data and insights that appear in the report are wholly collected from convenience retailers; it is considered an essential guide for HR professionals in the convenience retailing industry. Learn how to order your copy of the NACS State of the Industry Compensation Report at www.convenience.org/research. NACS STATE OF THE INDUSTRY SUMMIT With more than 50 years of convenience industry data, analysis and strategic insights behind it, the NACS State of the Industry Summit takes the guesswork out of what makes top performers stand above the rest. This annual benchmarking conference is regarded as the authority for convenience channel data. Join us April 3-5, 2024, in Rosemont, Illinois, for the next NACS State of the Industry Summit. Visit www.convenience.org/events/SOI to learn more.

Max Your NACS Becoming a NACS member is a business investment that will deliver solutions for your company to thrive today and solve tomorrow’s challenges. Plug into the latest insights, trends, tools and innovations from around the globe. NACS makes it easy for you to exchange knowledge and cultivate partnerships with leading retailers and experts in our industry. All employees of NACS member companies enjoy: • Free or discounted rates for reports, resources and a global portfolio of events. 6 | FMN Magazine FALL 2023

• Members-only access to VIP and industry-leading events, expos and education. • Personal introductions and representation through our national advocacy. From Capitol Hill to the forecourt, learn how NACS membership is something your company cannot afford to operate without. For more information on membership dues, applications and more, contact the retail membership team at MaxYourNACS@convenience.org. FuelsMarketNews.com

Get Global Convenience Industry Insights NIQ and NACS released their Q1 2023 global convenience retailing industry report providing industry-leading data, macro trends and analysis for 32 countries in North America, Europe, Asia-Pacific, and Central and South America. There are more than one million convenience stores globally. The NIQ/NACS First-Quarter 2023 Global Convenience Store Industry Report uncovers global issues, opportunities and challenges, and contributes to a global understanding of trends impacting individual trade areas for the global convenience store industry. Highlights of the report include: • In Q1 2023, all but one country (South Korea) experienced gains in convenience store sales versus a year ago. • Within the countries delivering growth, 16 saw between 10.1% (Spain) and 126.5% (Argentina), with seven of those in Latin America, five in Europe and four in the AsiaPacific region. • Most countries (22 of 32) had improved growth in Q1 2023

from Q4 2022. Except for South Korea, growth rates in the 10 countries with worse performance in Q1 NACS Global 2023 versus Q4 2022 were Convenience Store all positive. Industry Report • In the United States, convenience store promotion support grew by 6.0% in the quarter, while support Q1 increased 3.9% in the 23 remaining market. “In an increasingly global market, trends—whether opportunities or threats—quickly can spread across the world. These reports provide you with one more tool to help you not only prepare for the future but also help you define it,” said Henry Armour, NACS president and CEO. The full report can be downloaded at convenience.org/ research. Q1 2023

YOUR QUARTERLY PULSE ON GLOBAL TRENDS

Including exclusive NIQ syndicated data

Calendar of Events 2023 NOVEMBER NACS Innovation Leadership Program at MIT November 05-10 | MIT Sloan School of Management | Cambridge, Massachusetts NACS Women’s Leadership Program at Yale November 12-17 | Yale School of Management Yale University | New Haven, Connecticut 2024 FEBRUARY NACS Leadership Forum February 13-16 | The Ritz-Carlton Amelia Island, Florida

MARCH NACS Convenience Summit Asia March 05-07 | Signiel Seoul Hotel Seoul, Korea NACS Day on the Hill March 11-13 Washington, D.C. NACS Human Resources Forum March 18-20 | Hyatt Regency Jackson Riverfront Jacksonville, Florida APRIL NACS State of the Industry Summit April 03-05 | Hyatt Regency O’Hare Chicago Rosemont, Illinois Conexxus Annual Conference April 28-May 02 | Live! By Loews Arlington Texas

FuelsMarketNews.com

JUNE NACS Convenience Summit Europe June 04-06 | Intercontinental Barcelona Barcelona, Spain JULY NACS Financial Leadership Program at Wharton July 14-19 | The Wharton School University of Pennsylvania Philadelphia, Pennsylvania NACS Executive Leadership Program at Cornell July 28-August 01 | Dyson School, Cornell University Ithaca, New York

For a full listing of events and information visit www.convenience.org/events.

FMN Magazine FALL 2023 | 7

One Focus Is Not Enough

Carbon reduction is important, but so is clean air. BY JOHN EICHBERGER

was recently visiting family in Southern California and was reminded of the immediate issues associated with criteria air pollutant emissions like nitrogen oxides and particulate matter, among others. The sky around Los Angeles was about as brown as I have seen in years. It was a reminder that, while there exists significant concern about the long-term consequences of carbon emissions, there also remains immediate concerns about the quality of air and the impact of pollution on people’s respiratory health. This observation strengthened the conviction to execute the directions of our Board of Advisors to expand our scope. In May 2023, the Transportation Energy Institute Board of Advisors recognized that a myopic focus on one issue is insufficient, that the challenges facing the transportation sector are more diverse than one singular objective and that our official focus must be more inclusive about the direction in which transportation evolves. While the Institute will continue to study the means for reducing and eventually eliminating carbon emissions, we will also ensure our research incorporates options for reducing other transportation-related emissions and ensuring that solutions seek to preserve access to affordable and reliable transportation energy for all communities. Given our expanded official focus, I thought it would be appropriate to look at and share current trends in such emissions from the transportation sector and begin expanding the evaluation beyond the tailpipe to consider the full lifecycle emissions of the transportation sector.

FIGURE 1

CRITERIA POLLUTANT EMISSIONS OVER TIME Figure 1 presents a high level summary of contributing sources of key pollutants. This data, sourced from the U.S. Environmental Protection Agency, shows that on-highway transportation is the leading source of emissions for only carbon monoxide. It remains a significant contributor of ammonia (NH3) and nitrogen oxides (NOx), but with regards to other sources it is relatively negligible—industrial activities and stationary fuel consumption are much more impactful than transportation for most pollutants. When we look at each key pollutant over time, we can see significant progress in emissions reductions. With regards to sulfur dioxide, clearly EPA regulations reducing the sulfur content of fuel have had a major positive impact on the sector with transportation SO2 emissions having dropped to very low levels since 2007. Meanwhile, transportation particulate matter and NOx emissions have also demonstrated consistent reductions over time. Our publication “Decarbonizing Combustion Vehicles—A Portfolio Approach to GHG Reductions” includes some analysis of criteria pollutants. According to EPA, we are largely in attainment with air quality objectives (see Figure 2). PARTICULATE MATTER AND NOX Among the most critical emissions affecting public health are particulate matter (PM) and NOx. Nearly all modes of transportation have reduced NOx and PM emissions 85-90% since 2000 and emissions are projected to go down even further by 2030. While transportation is not the primary source of PM emissions (accounting for only 5% of PM emissions), PM does have a significant effect on human health and deserves special attention. And if we expand

8 | FMN Magazine FALL 2023

FuelsMarketNews.com

FIGURE 2

our notion of transportation emissions into the pollutant lifecycle realm, we can begin to better assess upstream power generation, farmland/biofuel practices and oil field inputs. Our combustion vehicle study looked at emissions from different vehicle and fuel combinations. According to the greenhouse gases, regulated emissions and energy use in technologies (GREET) lifecycle emission model’s wheel-to-wheel (WTW) emission values, today’s gasoline and diesel vehicles’ tailpipe PM emissions are 98.3-100.3% lower than the average 1980 gasoline car, and 97.3-99.4% lower on a WTW basis. Comparing EVs charged using the average U.S. mix electricity to the range of modern gasoline and diesel PM emissions, there is less than a 3% difference between any light-duty vehicle options. This emissions analysis shows that when including power plant emissions, EVs have slightly higher PM emissions than estimates for gasoline and diesel PM vehicle levels. The full range of credible vehicle emission estimates shows that ICEV PM emissions are FuelsMarketNews.com

equivalent to or below that of EVs, and all are near zero. The study also addressed PM emissions from the heavy-duty vehicle sector. Heavy-duty diesel tailpipe exhaust PM emissions have declined 99.8% versus 1990 models according to laboratory tests, and newer diesel vehicles have emissions below zero due to the diesel engine’s air pollution consumption and cleanup by its emission controls. With on-road air pollution consumption and cleanup, diesel PM emissions are 99.93% and 100.03% lower than 1990 diesel levels. MOVING FORWARD Reducing the environmental impact of transportation while preserving access to reliable and affordable energy is an objective we should all be able to support. Achieving it together will be a challenge, but it is one to which we can rise and we will achieve success if we remain open to various viable solutions. Knowing where we currently stand and where we have been is a very useful benchmark against future efforts to further reduce emissions.

This emissions analysis shows that when including power plant emissions, EVs have slightly higher PM emissions than estimates for gasoline and diesel PM vehicle levels.

John Eichberger is the director of the Transportation Energy Institute. This is an excerpt from a full blog post present at the Institute's website: https://www.transportationenergy.org.

FMN Magazine FALL 2023 | 9

FUELED FOR THOUGHT

What Does the Future Hold? The intersection of EV adoption and new regulations will impact fuel marketers. BY JOE O’BRIEN

hen it comes to the EV transition, most people are focused on if, when and how EVs will overtake the internal combustion engine. A handful of new standards and regulations recently in development could influence the outcome. Here’s a snapshot of three of them and a look at their potential impact. 1. TAILPIPE EMISSIONS New stringent tailpipe emissions standards proposed by the EPA are poised to motivate automakers to increase sales of EVs made during model years 2027 to 2032. If the ambitious emissions standards are adopted, the EPA estimates EV sales would comprise 67% of new light- and medium-duty passenger car, truck and SUV sales in 2032. New standards for heavy-duty tractor-trailers, as well as vehicles such as garbage trucks and school buses, have also been proposed. If the heavy-duty standards are finalized, the EPA projects 50% of buses and 25% of long-haul tractor trailers will be electric by 2032. The Alliance for Automotive Innovation, which represents almost every major automaker except Tesla, said the EPA’s aggressive emission standards are “neither 10 | FMN Magazine FALL 2023

reasonable nor achievable.” The group recommended adopting requirements for 40% to 50% electric, plug-in electric and fuel cell vehicles in 2030 with continued increases through 2032. 2. CORPORATE AVERAGE FUEL ECONOMY (CAFE) STANDARDS Two separate initiatives are afoot with regard to CAFE standards: • Revising the petroleum equivalency factor (PEF) for EVs • More stringent fuel economy standards from the National Highway Traffic Safety Administration for 2027 and beyond, which were expected to be announced in April The PEF is part of the mechanism used to determine an automaker’s compliance with CAFE standards. The U.S. Department of Energy is proposing to lower the PEF for EVs because the current PEF enables fleetwide compliance at a lower real-world average fuel economy through a smaller number of EVs across an automaker’s overall fleet. Changing the PEF could force automakers to sell more low-emission vehicles or improve conventional powertrains. More stringent fuel economy standards will also have a lasting impact. Data from the 2023 NACS State of the Industry Summit pointed to FuelsMarketNews.com

another more immediate, urgent challenge for fuel retailers: increasingly fuel-efficient internal combustion engines. A NACS article illustrates the potential impact of this threat. It points out the average age of vehicles on the road today is 12 years, and that a new Ford F-150, the most popular vehicle sold today, is 38% more fuel-efficient than 12-year-old models. As an indicator of what is at stake from the perspective of automakers, it is worth noting that between December 2022 and May 2023, two automakers paid a total of $363 million in civil penalties for failing to meet U.S. fuel economy requirements for prior model years. This is the first time in three years that penalties have been collected for failure to meet CAFE standards. It would seem the pressure is on to improve fuel economy. 3. CLIMATE DISCLOSURE RULES In 2022, the Securities and Exchange Commission proposed rules that would require publicly traded companies to report their climate-related risks and the direct and indirect greenhouse gas emissions their operations produce. The rules were intended to require big businesses to track, manage and report on emissions, characterized by the following parameters: • Scope 1 emissions: direct emissions generated through a company’s own operation, including emissions generated by fuel used to power equipment and the company’s own vehicles • Scope 2 emissions: indirect emissions from energy purchases for power, steam, heating and cooling • Scope 3 emissions: the remainder of emissions generated in a business’s value chain—from the raw materials to the use and disposal of their products and services Although objections were voiced about the proposed rules, many companies forged ahead anyway, assessing greenhouse-gas emissions produced in their supply chain. FuelsMarketNews.com

Walmart, for example, is working with its suppliers to procure renewable energy, reduce packaging waste and adopt farming practices that lower emissions. The retailer also has announced it will launch an EV fast-charging network, which would simultaneously expand its product offering and demonstrate sustainability intentions to shareholders. If large public companies incentivize other parts of their supply chain to contribute to their decarbonization, a shift to carbon-neutral products and services may begin to radiate from within the business sector. POLICY VS. REALITY Despite the aggressive climate-related rules that are on the horizon, the reality of the future state will likely be an amalgamation of what was proposed and an outcome that was ultimately muted by other factors. For instance, although the proposed emission standards are the strictest so far and they are being rolled out to incentivize EV expansion, automakers aren’t beholden to meet the standards through EV alone because the policy is “technology neutral.” Another potential wrinkle: The current political climate lacks continuity. What one administration establishes, the next one rolls back. From a business perspective, this makes planning and profitable execution difficult. That notwithstanding, this is a time of rapid innovation. Chevron and ExxonMobil are reported to be testing renewable gasoline blends that could reduce emissions on par with the levels of EVs. A scenario in which a former oil giant establishes a preferred partnership with a fuel distributor that transitioned its fleet of tankers to hydrogen fuel cell electric vehicles (HCEVs) and delivers loads of a new renewable fuel formula to a large retail fuel brand that proactively established an EV offering is well within the realm of possibility.

If large public companies incentivize other parts of their supply chain to contribute to their decarbonization, a shift to carbonneutral products and services may begin to radiate from within the business sector.

Joe O’Brien is vice president of marketing at Source North America Corporation. He has more than 25 years of experience in the petroleum equipment fuel industry. Contact him at jobrien@sourcena.com or visit sourcena. com to learn more.

FMN Magazine FALL 2023 | 11

Are You Up to Date? How to leverage Internet technology for better UST compliance. BY BEN THOMAS

y, how things have changed. When federal underground storage tank (UST) regulations were published in 1988, I suspect nobody could have envisioned how much the Internet would be used to automate UST compliance. The ability to smartly manage UST compliance has been transformative over the last 35 years. Automatic tank gauges have replaced wooden sticks, web portals have replaced faxes, webinars have replaced classrooms and online software systems now instantly track fuel levels, line pressure, leak tests, alarms and more. 12 | FMN Magazine FALL 2023

As I watch the evolution of so many mechanical practices into web-based applications, I feel compelled to highlight the benefits of this transition and call to your attention the importance of keeping up to date with your many responsibilities that can be easily automated in a cost-effective manner. If you operate UST systems and are not optimizing most or all of the following technological improvements, you’re seriously being left behind. Using these modern tools, you could be running your business more efficiently, but without them you also could be

missing leaks or be subject to shut down and fines. Which of the following transitions might be in your future? From the stick to the tank gauge. Sticking an underground tank using a calibrated stick with waterfinding paste to measure for fuel and water in your tank may give you a visceral sense of confidence. And seeing is believing; I get it. But as far as accuracy and reliability, you’re way off. (Also, clipboards are out, see below.) Use a stick if you must increase your 1/8” tolerance comfort level, but please use your tank gauge probes for 1/1000” accuracy. From the fax to the portal. More and more state UST agencies are abandoning faxes, emails and snail mail letters as ways of collecting information in lieu of a statewide underground storage tank portal. There you can access critical site information, check on compliance actions, file notifications and even pay your annual fees. All 100% online. Check your state UST agency webpage about the status of FuelsMarketNews.com

IRINA DEVAEVA/GETTY IMAGES

RETAIL OPERATIONS

your portal. If your state agency doesn’t have one yet, demand one. From the classroom to the webinar. One thing COVID gave us as a society is the opportunity to experience the effectiveness of remote learning. Not too many years ago the classroom was the only place to get certified. But now online learning is commonplace. As someone who started UST operator training in 2003 with my trusty PowerPoint, three-ring binder and classroom model, it’s been very exciting to reach so many more people with an online alternative. Assume most certification training you need today can be found online. Also, keep track of all your training certificates that way. From the clipboard to the tablet. Pretty much any site testing, service and inspection work that used to require a clipboard to document information can be completely done on a tablet. You reduce the redundancy of entering information, the problems of transcription errors and the time it takes to put information in a centralized location. Check with your service provider about the many digital platforms that are available to track inspections. From the backroom alarm to the call center. If your automatic tank gauge does not have internet connectivity and one of your employees goes in the backroom and sees an alarm, he or she is the only person in the world who knows about that alarm. Forget that. Even with quality operator training and alert employees, your tank gauge can give you a wide array of alarms, some serious and some not. Who decides which is important and how to react? Hook your tank gauge up to the Internet and communicate all mission-critical information, such as fuel levels and alarms, to an essential call center. The systems can also prioritize alarms and reduce the background noise of inconsequential notifications. Better yet, send that critical inventory and alarm FuelsMarketNews.com

information directly to the smartphone of people in charge of UST compliance. There are a number of software platforms that can send the information from the back room right to your back pocket. From the printer to the LED screen. Major tank gauge manufacturers have moved away from buttons and have embraced touchscreen technology for tank monitors. This is perfect technology for your Gen XYZ operators. Plus, it’s good to know that if your tank monitor still has buttons, it’s probably no longer manufactured and may need to be replaced anyway. Start saving and upgrade your tank monitor for better security, more reliability and easier serviceability. Plus, visually seeing a cross-section of a tank partially full of fuel only improves operator competency in fueling operations. From the three-ring binder to the cloud. Three-ring binders are a tried-and-true way of organizing all your information, but those days are pretty much gone. Plus, with increased testing in compliance requirements, managing a binder can be quite complex. There’s plenty of software applications and companies out there. They will organize all your compliance information and store it in the cloud. No more lost records! From the wall calendar to the e-alert. Most operators know there are mandatory action items required every day, every month, every year and every three years. Really? You’re still using a wall calendar? The growing list of required actions can be quite complex and beyond what a simple wall calendar can manage. Use an online service to store and remind you of mission-critical compliance actions that are calendar driven. From the shutdown test to never shutting down. Historically, tank and line leak testing required downtime (i.e. shutting down the site) in order to get reliable test results.

Pretty much any site testing, service and inspection work that used to require a clipboard to document information can be completely done on a tablet.

FMN Magazine FALL 2023 | 13

RETAIL OPERATIONS

Ben Thomas is the president of UST Training. He has over three decades of UST industry experience, with networking and ideas to help owners and inspectors solve complex technical problems in the management of UST systems. Contact him at ben@usttraining.com.

Obviously, shutting down your site disrupts traffic flow and can reduce sales. There are now web-based software solutions that allow you to test while you pump simultaneously. From phone tech support to QR codes and YouTube. Technical assistance on operational and compliance issues used to take the form of calling into a toll-free hotline number. Why wait on hold for tech support? Hop on YouTube and search for the latest how-to topic on the internet (Example: our popular Tank Savvy Minute series) or find a QR code and go directly to the information that you need. From the open tank pit to virtual reality. Unless you watched a gas station being built, you probably were never given an opportunity to look at a real live configuration of tanks, pump,

stumps, piping and so on. Now with virtual reality, you can literally experience the geographic and spatial relationship with all the parts that make up a UST system. This is an excellent learning tool. Google it. The reliance on the internet to increase business efficiency and accountability, as well as to manage critical compliance actions, is clearly today’s reality if you manage underground petroleum storage tank systems. UST owners and operators, whether a small business or a large corporation, can and should increasingly rely on the internet to transfer manual mechanical duties into digital ones. For some of the action items above, there are literally dozens of vendors to choose from. Shop around and find the best one that works for your organization.

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RETAIL OPERATIONS

Drive loyalty and engagement by connecting with your customers. BY LORI BUSS STILLMAN

verything we do today—how we work, how we interact with others, how we collaborate and have dialogue, even how we shop—is taking place with our phones. Digital technology is everywhere and it’s not going away. And there are some great benefits to digital technology. But it’s changed how we interact with those who are present with us. We’re not interacting with each other face to face. It seems as if everything is taking place digitally. Yet, as humans we need each other. We crave interaction. We draw and give energy from and to each other to get through the highs and lows of our 16 | FMN Magazine FALL 2023

life. Human connections are important. We seek them out. We look for people to celebrate with. We want to have eyeball interactions with people who we transact business with because it makes us feel better about those engagements. We want to celebrate and have fun. We want to do all these things that can happen in technology but are certainly better when they happen face to face. Even coming into a store and just having a place to sit down and linger for a minute rather than eating another meal at the dashboard. Some 5.4 billion people all over the world, or about 70% of people on the

planet, have unique mobile phones. About 5 billion are using the internet and about 60% of the population are active social media users. We continue to become more rapidly digital than ever before. We now, on average around the globe, spend six hours and 37 minutes every single day online. And by the way, 92% of us are doing that on those devices that we all can’t live without. I’m guilty too. And the question is, what does this mean to society when everybody is online and everybody’s busy looking down rather than looking out, touching and interacting with others? I’ll give it to you in one word. Loneliness. Look at the statistics of society today. We are more connected than we’ve ever been before, and people are lonelier and isolated in ways they can’t even comprehend. A Harvard survey last year found FuelsMarketNews.com

FG TRADE/GETTY IMAGES

The Human Touch

RETAIL OPERATIONS

that 48% of young mothers were profoundly lonely. We’re not talking about older Americans, where we might expect that they’re not as mobile as they once were. On average, 20% of Americans today describe themselves as deeply lonely. That’s a big number. So, what does this have to do with loyalty and engagement? Well, our industry does 165 million transactions in the United States every single day. That’s the equivalent of half the U.S. population in and out of a convenience store every single day. Some 43% of the U.S. population lives within a mile of a convenience store and 86% lives within 10 miles. We employ almost 2.5 million people and are engaged in our communities through programs where we’re giving back. So, the opportunity to win loyalty and engagement is to build upon frequency, to build upon proximity and to build upon community to deliver human connections. Loyalty and engagement come by giving people an opportunity to be human, to put down their devices, to have a conversation, to be seen, to have a quick friendly chat— even if it’s a minute in the store over a cup of coffee while they’re checking out. It might be the one time in their entire day that they are real. And that is powerful and easy to do. But, you must first connect with your employees if you expect them to connect with your customers. This is on account of the same basic human dynamics that your customers face. They must be seen, recognized and FuelsMarketNews.com

rewarded with more than just a salary. A pat on the back. Good job! They need to be respected. And create an environment where they connect with your brand’s values, purpose and mission. Do they know it? Can they recite it? But these brand values must be real in practice, not just words. Because if they don’t feel it in their hearts, they can’t extend it to the customers that they serve on the other side of the counter. And when they are on board, as part of a real team, they can be motivated to make eye contact with people when they come in, recognize them, compliment them, have that cup of coffee with the two sugars ready for Joe or Sally as they’re coming through the door. Little things that allow customers to know this is my place, this is where I belong, I’m connected here. Experience matters, and while it can be emotionally rewarding it can also be financially rewarding. Some 35% of people say that an enjoyable experience translates to increased frequency. That’s not really rocket science. But, if the experience is good, they’ll spend more, because they are not in as big of a rush to move on with their day. So, the opportunity to win loyalty and engagement is to build upon frequency, proximity and community to deliver human connections. I guarantee you that the brown box that’s likely waiting for them on the front porch when they get home at the end of the day isn’t going to ask them how their day went.

You must first connect with your employees if you expect them to connect with your customers. This is on account of the same basic human dynamics that your customers face.

Lori Buss Stillman is vice president, research and education for NACS.

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What About Hydrogen? This transportation fuel has a potential role in a zero-carbon future, but what about retail? BY ROY STRASBURGER

ith all the talk about electric vehicle charging recently, I’ve been giving a lot of thought to what the future of fuel retailing may look like. As total hydrocarbon fuel consumption goes down, the simple math is that there will be fewer total gallons sold at current gasoline locations. There is going to be a retail market for electric charging, but no one really seems to know how big the opportunity is going to be, where retail EV charging stations should be located 18 | FMN Magazine FALL 2023

and what a sustainable business model looks like. EV charging competition will include private homes, parking garages, shopping centers, restaurants, office spaces and any place that has a parking space. “Refueling” a vehicle will no longer be based on having a piece of property that can accommodate two or three 10,000 gallon tanks. All a charging site will need is access to a power line. Other alternative fuels are out there (and contributing to the decrease in the total hydrocarbon gallons sold), such

as methane, propane and compressed natural gas (CNG). The one that seems to run second to electricity now is hydrogen. Hydrogen is one of the most abundant elements on the planet, but it is not found in its pure form. To generate energy, hydrogen needs to be separated from other atoms. Usually, this is done through a process called electrolysis to split the atoms within a molecule of water. To develop green hydrogen, you would use electricity generated from a green source, such as solar or wind power, to separate the hydrogen and oxygen molecules in water, creating pure hydrogen and oxygen. While hydrogen can be burned in its pure form to create energy, the most energy efficient way of using hydrogen is with a fuel cell—basically a small electricity generation device. This process creates an electric charge for cars and its only emission is water. FuelsMarketNews.com

AUDIOUNDWERBUN/GETTY IMAGES

RETAIL OPERATIONS

The refueling time for a hydrogen tank is not that much longer than for a petroleum tank and is significantly shorter than fully charging an EV. There are several challenges with hydrogen: • There are not very many fuel cell cars on the road. According to the International Energy Agency’s 2023 report, there are only 15,000 fuel cell light vehicle EVs in the United States. That is not much of a market to support an infrastructure. • Hydrogen in its natural form is not energy dense. Therefore, it needs to be compressed to provide sufficient energy density. The lack of energy density means that vehicles will have to have large storage tanks onboard to supply the fuel cell to prevent range anxiety. While this may be an obstacle with light vehicles, larger trucks and buses should be able to accommodate the larger storage tanks. • Since hydrogen is not energy dense, it requires an infrastructure to compress and maintain hydrogen under pressure. Hydrogen can be transported either by truck or pipeline, but it needs a pressurized storage unit, not dissimilar in size to a petroleum storage facility—except that it is above ground—to provide hydrogen to the consumer. These refueling stations will look very similar to our current gasoline stations. • Pure hydrogen is very flammable. (Remember the Hindenburg?) Having said that, reports suggest that using hydrogen as a fuel is not significantly more dangerous than FuelsMarketNews.com

using gasoline as a fuel. While hydrogen has a lower ignition point than gasoline, it dissipates faster, since it is a gas. Bottom line, all fuels need to be treated with caution. • The installation of a hydrogen fuel station costs between $1.4 and $3 million dollars, according to the U.S. Department of Energy. That’s a lot of money when there are so few hydrogen vehicles on the road. My take, now, is that hydrogen will be an important fuel for fleets of heavy-duty vehicles such as buses and 18-wheelers. These vehicles can have the storage capacity to handle range issues and they will benefit from the short refueling time. Having a dedicated hydrogen-fueled fleet will make sense when installing a hydrogen station. Ultimately, the main hydrogen fuel retailers will be those companies that can secure long term contracts with fleet owners in either an urban refueling site near bus and truck hubs or at truck stops where the long-distance fleets can refuel. Hydrogen’s biggest impact will likely be as a way to transfer energy—capturing the energy created by solar or wind power in remote places through the electrolysis and compression process and then being shipped by pipeline, truck or ship to electricity power plants, where it can be used as a green fuel. Ultimately, hydrogen’s role as a retail fuel will likely be small, so think carefully about investing in a hydrogen station unless you have a solid agreement with the owner of hydrogen-fueled bus or truck fleet.

While hydrogen can be burned in its pure form to create energy, the most energy efficient way of using hydrogen is with a fuel cell—basically a small electricity generation device.

Roy Strasburger is the CEO of StrasGlobal. For 35 years StrasGlobal has been the choice of global oil brands, distressed assets managers, real-estate lenders and private investors seeking a complete, turnkey retail management solution.

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Trucking Into the Uncertain Future A range of environmental regulations put significant pressure on the critical trucking industry. BY ALLEN SCHAEFFER

rying to sort out the future while living in the present is making for challenging times for users of commercial trucks and the companies that build them. For an industry that is substantially reliant on diesel technology, what does the future hold? The need to meet clean air requirements is justification behind a deluge of new emissions and climate change regulations and policies impacting every aspect of the future for heavyduty trucks. It began in 2020, when the California Air Resources Board (CARB) adopted a “Low NOx Omnibus Regulation” 20 | FMN Magazine FALL 2023

that cuts nitrogen oxide emissions from new trucks sold there by 75% starting in 2024. Then the Advanced Clean Trucks regulation followed in 2021, requiring manufacturers to sell increasing percentages of zero-emission vehicles (ZEVs) starting in 2024. And later this year a rule requiring California fleets to buy those ZEVs is expected to be finalized. In December 2022, the Environmental Protection Agency (EPA) announced a new final federal rule that will cut future NOx emission from new trucks by 50% from current levels starting in 2027. On

March 23, the EPA granted critical waivers that allow several aspects of California’s Advanced Clean Trucks program to go forward, and on April 12 the Biden Administration proposed a multi-pollutant new standard and the third phase of rules requiring new trucks to achieve lower greenhouse gas emissions. And let’s not forget the six states (Oregon, Washington, New Jersey, New York, Massachusetts, Maryland) that since 2020 have adopted California’s heavy-duty truck rules as their own. It’s too early to say for sure where this patchwork quilt of new requirements leaves the industry. Some on the receiving end of the rules, including fleet managers, are speaking out. Andrew Boyle, the manager of Boyle Transportation, a truck fleet with one of the strongest environmental records in the industry today and a first vice chairman of the American Trucking Association, appeared before the United States Senate Environment and Public Works Committee on April 21. Among other things, his testimony FuelsMarketNews.com

GRANDRIVER/GETTY IMAGES

COMMERCIAL FUELS

noted that “projecting an automotive construct (for EVs in passenger vehicles) on the trucking industry dynamic is a massive mistake.” He injected a heavy dose of reality into the debate happening on Capitol Hill, and nationwide, over electric-vehicle mandates. Boyle outlined the challenges and readiness for electrification of heavyduty trucking. He noted that anywhere in the United States, one of his diesel-powered trucks can be fueled in 15 minutes and then have a range of 1,200 miles. An electric truck with a smaller payload has a range of 150-330 miles and takes a dozen hours to recharge, so it would take 3-4 times as many trucks to do the same work, and that is if adequate power charging is available. We are clearly at the beginning of a chaotic period of competing existing technologies—advanced diesel and natural gas—and new technologies, battery electric vehicles and those fueled by hydrogen, in varying states of readiness and uncertainty. What is the future for internal combustion engines like diesel and natural gas in the next 10 or 20 years? The overwhelming majority of commercial trucks are powered by diesel engines today, a fact that is unlikely to change for a decade or more, thanks to continued improvement in emissions, ready fuel access, predictable performance and other known operating characteristics. Meeting clean air demands does not require switching to a zero-emissions vehicle. Lengthy timeframes to get zero-emission vehicles to scale with the necessary charging or fueling infrastructure are major issues yet to be worked through. Beyond advanced internal combustion engines, renewable biodiesel fuels and renewable natural gas have been gaining in popularity with fleets as readily available and affordable means FuelsMarketNews.com

to immediately reduce carbon and other emissions. The fuels are renewable, plentiful, growing in production and widely accepted by truckers. The renewable low-carbon fuels have been central to helping California and a few other states achieve dramatic reductions in greenhouse gases and other emissions by blending more low carbon fuels into the mainstream fuel supply. Some fleets have switched to 100% biobased diesel fuel outright. For all the proven success of using renewable biodiesel fuels, EPA’s regulatory posture on the utility and future for these fuels is a failure. Earlier this year its initial foray setting renewable fuel policy fell far short of expectations, underestimating the potential for growth in volumes of renewable biodiesel fuels used now and more production capacity coming online. Unbelievably, EPA’s proposed renewable fuels policies did deliver a boost to cellulosic biofuels that are tied also to electric vehicles, enabling them to generate e-credits. EPA’s proposals raised serious questions from some leading voices about the Biden Administration’s fairness and preferences for electrification over all other strategies. If EPA’s approach is finalized, it diminishes the future for biobased diesel fuels while essentially further expanding electrification. For their part, truck and engine manufacturers are playing their version of Jenga—living in a world stacked with competing forces—serving the customer of today while planning for the one of tomorrow, moving at just the right speed on new technology and not losing ground on what is selling today. It’s a teetering tower where success is interdependent, yet not all factors are known, and many are out of their control. How will the economy fare? Are

The overwhelming majority of commercial trucks are powered by diesel engines today, a fact that is unlikely to change for a decade or more, thanks to continued improvement in emissions, ready fuel access, predictable performance and other known operating characteristics.

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COMMERCIAL FUELS

Allen Schaeffer is the executive director for the Diesel Technology Forum, a nonprofit organization dedicated to raising awareness about the importance of diesel engines, fuel and technology.

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freight demands increasing or decreasing? Will truckers hang on to older equipment? (Prediction: yes, for a while). Will there be pre-buy diesel trucks at the last minute before new ZEV purchase mandates take effect? (Prediction: yes, if history is any indication). Will some truckers be pioneers and go all in on ZEV to take advantage of all the government incentives and funding? (Prediction: some can and are, so yes). Will hydrogen make a stand that can compete with diesel for long haul? (Prediction: possibly at some point). Will new fuel and original equipment manufacturers (Tesla, Nikola) be able to significantly displace the traditional OEMs (Cummins, Daimler, Isuzu, Navistar, Paccar, Volvo) from the market? (Prediction: not likely). Will fleets want to take a risk with a familiar and proven partner and wonder about parts, service and standing behind the product when the novelty wears off? The one thing that the new truck rules all have in common is they will be a heavy burden to figure out and comply with in a relatively short amount of time. And they all only impact future new vehicles and fleet purchases starting in 2024 in California, and 2027 at the federal level. None of the current

requirements address the existing fleets of millions of trucks, and the millions more miles and dozens more years that they will be in operation. If we have a climate crisis, as EPA has said, and we can’t wait for cleaner air for communities, how does diminishing the opportunity for greater use of renewable biobased diesel fuel help deliver carbon reductions faster? In this time of “everything, everywhere, all at once” there are ways to deliver significant results and boost traditional manufacturing right now. The Modern, Clean, and Safe Trucks Act (Senate Bill S. 694) would eliminate the 12% federal excise tax on the purchase of new trucks, a major barrier to new truck acquisition. Coupled with expanding the use of renewable biofuels everywhere possible, this would go a long way toward delivering more progress on clean air faster and securing some greenhouse gas reduction now to make the future less challenging. And it would give time for ZEV technology to come further along. One thing is for sure. We’ll need our trucks to deliver everything our economy demands tomorrow, just like today. Maybe what is powering the truck won’t matter much … unless it can’t deliver. FuelsMarketNews.com

GRANDRIVER/GETTY IMAGES

For all the proven success of using renewable biodiesel fuels, EPA’s regulatory posture on the utility and future for these fuels is a failure.

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PART 2 OF 3

Communications Breakdown Established behavioral techniques can improve business operations and the office environment. BY JOHN KIMMEL

his is the second article in a three-part series. As a quick reminder, DISC is an acronym for the four styles of human behavior that encompass each of us. • D personality style is outgoing and task-oriented. D stands for Dominant. Your style is the least common and only makes up about 15% of the population. • The I personality style is outgoing and people-oriented. I stands for Inspiring. Your style makes up about 25% of the population. • The S personality style is reserved 24 | FMN Magazine FALL 2023

and people-oriented. S stands for Supportive. Your style is the most common and makes up about 35% of the population. • The C personality style is reserved and task-oriented. C stands for Cautious. Your style makes up about 25% of the population. While all of us have at least a little of each style, most of us have one or two styles that tend to monopolize our behavior. In this article we will explore in more detail the two outgoing personality styles: D and I.

DOMINANT D’s are outgoing and task-oriented and are the natural-born leaders among us. They like to own and control every situation. In fact, if they are in a group where the positional leader is failing to lead, they are likely to assume control and take over, nominating themselves as the group’s new captain. Like all personality styles, D’s have a secret fuel that powers them. Getting things done is the propellant that drives the Dominant style forward. For a D, getting things done makes everything right in the world, but watch out if a D feels like they can’t get things done. They will be frustrated and difficult and might even be challenging to have around. While getting things done is the key positive attribute for a D, the Dominant people we know also have a blind spot. D’s can be too direct with their speech and can easily hurt the feelings of others. They might even make other people cry. Now let me be clear. It’s not that D’s try to make other people cry, they are just so direct that others can FuelsMarketNews.com

DRAFTER123/GETTY IMAGES

FUEL MARKETERS

perceive their intentions in a way that was unintended. Dominant people also have a fear of losing control. Their fear is one of the characteristics of their personality style that compels them to maintain control. When you encounter people with the D personality style, you might be tempted to try to keep them from leading, but that is not usually a good idea. They tend to be good if not excellent leaders. They have an innate ability to make fast decisions that are usually correct. People with the Dominant personality style tend to speak boldly and slowly. They want to make absolutely sure that you understand what they are telling you to do. They cut to the chase quickly and often speak in “bullet points” with clear and concise sentences. They prefer to be communicated with in the same to-the-point direct manner, skipping the small talk and the fluff. They will be happy to get to the small talk once the task is completed and the work is done. INSPIRING The Inspiring people among us are also outgoing like the D’s but they are not task-oriented. Instead, they are people-oriented. The I’s are the natural energizers among us. They bring vibrant stories and energy to every situation. They don’t need to go to a party because they are the party. I’s love to be in the spotlight. If you have ever seen me do a presentation at a petroleum event, then you know that I am an I. These are my people. While I’s are happy to get things done, that is not our secret fuel. Honestly, the Inspiring style’s secret fuel is something of an enigma to the other three styles. An I’s secret fuel is having fun. Have you ever heard someone make a joke at an inappropriate time, like at a funeral? That person was very likely an I. We have a ton of energy and can work long hours—as long as we are around other people and are having fun. Like the other styles, I’s also have a blind spot. We have trouble staying FuelsMarketNews.com

focused. We are easily distracted and often our conversations are circular in nature. Task-oriented people think in a linear fashion. If you need to get from point A to point D, then you travel from A to B, B to C, and C to D. That is not how the mind of an I works. Inspiring people are happy to go from A to C, then fall back to B and skip over to D. This can be frustrating for others, but you must admit, it is entertaining. There is one thing that I’s are afraid of more than anything else, and since 70% of all sales people are I’s it might surprise you to know that I’s are afraid of rejection. They are great at making quick connections and getting people to like them and trust them. They are also great at presentations because, well, they are fun! But what they are not great at is closing. You see if an I asks the obligating question, and the prospect says no, then they have not just lost a customer—they just lost a new friend. Inspiring people like to communicate with energy and enthusiasm. They make their point by telling stories and they are captivating storytellers. They usually speak boldly and quickly and often use their hands to add emphasis to their expressions. In fact they don’t quite know what to do with their left hand when they shake hands with their right. Have you ever met someone for the first time and when you reached out your hand to shake hands, they didn’t just use their right hand to shake, but they used their left hand to make a two-handed shake? You were likely shaking hands with an I. In the final article in this series, we will explore the other two styles: S and C. I will leave you with this. The typical salesperson in our industry makes over 50% of their sales to people who have the same personality style that they have, and only 5% of their sales come from people with the opposite style. Prospective customers, however, are a mix of all four different styles. That means that we need to learn to speak all four languages if we are going to enjoy the greatest success.

We all communicate differently based on how we are wired. And because we communicate using different styles, we prefer to be communicated with in certain ways.

John J. Kimmel is the author of Selling with Power and has spoken at many state and regional petroleum marketer associations. Kimmel provides custom solutions to increase the effectiveness and profitability of sales teams for petroleum marketers all over the United States. To learn more, visit www.johnjkimmel.com.

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Brand in Focus: CITGO Customer focus is the underlying value for its brand partners. BY KEITH REID

elcome to a new series from FMN. The goal is to explore the various programs and incentives offered to marketers and retailers by the various brand partners. Of course, it’s not just the majors anymore. There are notable retailers with strong independent brands. But this series will look at the operations that offer brand solutions that are available to unbranded independents or those looking to change their brand partners. The first look is at CITGO. The company was founded in 1910 as the Cities Service Company. The company 26 | FMN Magazine FALL 2023

rebranded as CITGO in 1965, combining the first syllable of its previous name with “GO.” CITGO was sold to Petróleos de Venezuela, S.A. (PDVSA) in phases between 1986 and 1990. Operationally, it enjoyed record profits of $2.8 billion in 2022 and maintains a strong refining, retail and marketing presence in the United States, with over 4,300 independently owned, branded retail outlets. The company is currently looking to expand its retail base by providing a range of incentives. Recent programs have a claimed value of up to $70,000 and feature such offers as the first load

of gasoline dropped for free. It is also looking to expand its marketer base where that does not create competitive issues with its existing partners. On the supply side, CITGO owns and operates three refineries, and wholly and/or jointly owns 38 active terminals, six pipelines and three lubricants blending and packaging plants. It has a crude capacity of approximately 807,000 barrels-per-day (bpd), which ranks it as the fifth largest and one of the most complex independent refiners in the United States. PARTNER RELATIONS CITGO has enjoyed the reputation of being a customer-centric organization focused on supporting its marketers and retailers. “The supplier cup was something that you could almost just chalk up as a win for us for being customer-friendly and accessible through all levels of the organization,” said Chris Kiesling, FuelsMarketNews.com

FUEL MARKETERS

assistant VP light oils operations & marketing. “Everybody here picks up the phone, including myself and those above me. And that’s a level of access that they may not get everywhere else. That top-down message permeates into everything that we do.” CITGO offers a range of networking and business enhancement opportunities throughout the year. Kiesling cited an average of 15 regional meetings that cover the gamut including sales and marketing programs, brand operations and credit card operations. With leadership present, its customers have the opportunity for face-to-face interactions to discuss opportunities and issues with existing programs and current and future needs. “We believe [the market] is going to tighten up over the next five to seven years,” Kiesling said. “We want to be a partner with our customers to help them make their stores bulletproof so that they can withstand that competitive drive. We’re going to be creative, aggressive and find things that work for both parties, but it also goes into things that we’re doing to promote our brand.” That could include sponsorships, media and initiatives that tie consumers back to the retailer and the marketers’ locations. ILLUMINATE IMAGE CITGO introduced its Illuminate image in 2020. Kiesling stated that approximately 41% of the network has converted. This is a complete redo of the canopy and the general forecourt imagery. A core component is lighting. “We’re seeing gallon increases after they do the Illuminate program, on average 7-10% with some locations experiencing closer to 20-30%,” Kiesling said. “People comment that the lighting at night really does make FuelsMarketNews.com

a difference. And they’re noticing that their evening and morning traffic has increased significantly because it’s more inviting, feels safer and looks cleaner.” CITGO launched a complementary program this year named Elevate that goes beyond the forecourt with a focus on the store. This is an exterior refresh to help clean up the fascia and incorporate new building signage, lighting features and paint designs. It also includes branding elements for the inside. “That’s something that we’re currently piloting,” Kiesling said. “Depending on the marketplace we’ll either fund it or we’ll work with the marketer on funding. The early results show about a 30% increase on fuel, year over year, and about 17% on merchandise. So it’s been very positive.” He noted that there are approximately 40 renovations in process now, with the goal of having 75 done by the end of the year.

Everybody here picks up the phone, including myself and those above me. And that’s a level of access that they may not get everywhere else. That top-down message permeates into everything that we do.”

LOYALTY PROGRAMS CITGO launched Rollback on its Club CITGO loyalty program in the third quarter of 2022. This offers an everyday reward of 3 cents per gallon plus bonus days like Triple Tuesday (9 cents) or 5 Cent Friday. New members are incentivized with 20 cents per gallon off and the company recently introduced its mobile payment app. The app offers 2 cents per gallon off and stacks. CITGO is currently working with a third-party consulting firm to further build out its loyalty offer. “We can introduce personalization into the program, and we think that there’s going to be a lot of fun things to come with that over the next six to nine months,” Kiesling said. FMN Magazine FALL 2023 | 27

FUEL MARKETERS

We’re seeing gallon increases after they do the Illuminate program, on average 7-10% with some locations experiencing closer to 20-30%. People comment that the lighting at night really does make a difference.”

Keith Reid is editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb.com

28 | FMN Magazine FALL 2023

For its partners, CITGO is revitalizing the MyCITGO.com platform. It’s a one-stop shop for its marketers to come in and find anything they need related to CITGO, with the intent to increase ease and lessen potential frustration. “I think it’s important to note that this is not an effort to get away from the face-to-face personal interaction,” Kiesling said. “We recognize though, that for some of the things our customers do every day they may not actually want to talk to us and might want to just hit an ‘easy button.’ We’re very excited for what that user interface will mean for the customers in terms of saving them time while putting a lot of data at their fingertips.” Kiesling noted the revitalized platform is scheduled to launch at the beginning of the third quarter. ELECTRIC VEHICLE CHARGING On the EV charging front, CITGO has launched a pilot program to see how it can help its marketers navigate the challenges of getting started. The first test site is scheduled for either Q3 or Q4 of 2023.

“The current business projections for EVs don’t necessarily pencil all that well when you’re looking at it from a marketer’s standpoint,” Kiesling said. “We want to make sure that we’re not doing anything that leads them into making investments that are ultimately premature. You might want to be early, but you don’t want to waste money on obsolete solutions by the time the market arrives.” SUPPLY A key component of any brand relationship is supply. As noted earlier, CITGO offers three refineries and a range of pipelines and terminals. “[Our network gives] us significant ability to control the security of supply for our customers,” Kiesling said. “We also have experience with how to deal with supply disruptions. We’ve seen so many strange things over the past several years—the Colonial Pipeline explosion, the cyberattack, all of the weather-related issues—our experience dealing with those kind of supply issues and the backing that we have with actual physical barrels is a real strength for the company.” FuelsMarketNews.com

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Various approaches look to reduce the costs of sustainable jet fuel while maintaining performance. By Dr. Raj Shah, Beau Eng, Mrinaleni Das and Dr. Vikram Mittal

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FuelsMarketNews.com

Recent Innovations in

Sustainable Aviation Fuels

ustainable aviation fuels (SAFs), biofuels exhibiting properties similar to conventional jet fuel, are growing rapidly in popularity as countries across the globe seek emission-free sustainable energy sources. Over the past three years, SAFs have experienced significant innovations and advancements, prompted by international efforts to reduce greenhouse gas emissions. In this article, we will explore the notable developments in SAFs, remarking on their importance and positive implications for the further development of sustainable aviation fuel as a whole. The primary fault of SAFs and the main reason they haven’t been widely implemented is their prohibitively high cost. Researchers sought to remedy this by expanding upon the number of chemical production pathways for SAFs, as the implementation of more approved methods of creating SAFs would allow more production companies to produce them. Ideally, the greater variety in SAF production would lead to increased production and greater stock, which would drive down demand and lower the price of SAF to reasonably compete with traditional jet fuels. From that metric, SAF development started off on a very strong foot in 2020, as the American Society for Testing and Materials (ASTM) approved two technical certifications, effectively increasing the number of approved technical pathways to seven. While this may seem like a fantastic start, not all pathways have found use in generating SAFs for civil use. This may be due to changing priorities, a mismatch of materials required for that pathway or some other issue that renders those paths unsuitable to produce “economically viable” SAFs. Still, this does not render the discovery of two new pathways useless. On the contrary, both pathways present opportunities to branch from

FuelsMarketNews.com

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their processes to arrive at entirely new pathways and even improvements to the existing pathways. If these pathways are experimented with further, it could be possible to salvage them for alternative use, or perhaps these pathways could be replicated, using biofuel or other techniques that may yet render them viable for commercial production. Alongside this discovery, the Sathyabama Institute of Science and Technology in India released a study regarding two SAFs, reporting that they could be “the potential replacement” for Jet A-1, a kerosene-type fuel and one of the most commonly used fuels for commercial aviation. The two alternative fuels are blends of Jet-A fuel, one being a blend of 70% Jet-A, 20% canola oil and 10% ethanol, while the other is an almost identical blend with a 1:1 substitution of canola oil with pyrolysis oil. In the experiment, standard Jet-A fuel was tested in a gas engine turbine at various loads for performance, combustion and emission. The two blends were then tested separately under the same conditions, and the results were compared. The study found that the SAF mixtures exhibited greater static thrust than the standard Jet-A fuel due to the addition of ethanol, with the pyrolysis oil blend exhibiting higher static 32 | FMN Magazine FALL 2023

thrust than the canola. Moreover, the pyrolysis blend registered the lowest fuel consumption at all speeds, while the canola blend showed no significant difference. Finally, the study found that the average emission of NOx, CO and CO2 was reduced significantly compared to the Jet-A blend, with the canola oil blend experiencing a greater reduction than the pyrolysis blend. From this experiment, the researchers concluded that pyrolysis oil could work well for higher-performance engines, while the canola oil blend works well to mitigate carbon emissions. With further experimentation on canola oil and pyrolysis oil, future SAF pathways could find greater success in mitigating the emission of greenhouse gases while also outpacing the fuel efficiency of traditional jet fuels. In keeping with the idea of sustainable pathways, a study called “Toward Net-Zero Sustainable Aviation Fuel with Wet WasteDerived Volatile Fatty Acids” was conducted, testing a potential SAF pathway that creatively utilized wet waste as a feedstock source. Wet waste is a slurry of food waste, manure, sludge and various waste fats, oils and greases. Due to its high moisture content and relative complexity, it is often relegated to simple methane production through anaerobic digestion. FuelsMarketNews.com

PREVIOUS SPREAD AND THIS PAGE: DUDAEVA/SHUTTERSTOCK

The development of SAFs has come very far in the past three years, and it shows no signs of stopping anytime soon.

If used as is, the high moisture would not allow for conventional thermochemical approaches for biofuels like pyrolysis or gasification. However, if the anaerobic digestion of wet waste were to be paused before methanogenesis occurs, volatile fatty acids (VFAs) are produced. From there, VFAs can be reworked into SAFs through carbon coupling and deoxygenation to create long-chain hydrocarbons suitable for jet fuel. This experiment then puts this theory into practice, producing n-paraffin and testing it using the ASTM’s Fast Track qualifications for a SAF. This testing would allow the potential SAF blend to bypass years of testing and potentially see production within one to two years. The study reports that the paraffin SAF blend met the specifications for this qualification, proving that the method works and is feasible. Furthermore, the study enhanced the mixture by blending it further with isoparaffin VFA-SAF. This new blend increased the upper blend limit to 70 vol%, meaning that 70% of the blend can consist of the VFA-SAF mixture, with the remainder being standard jet fuel. On top of the significantly reduced soot production compared to standard fossil fuels, this new pathway could prove to be very significant. Wet waste is very prominent in many landfills and is currently not very useful as a resource. If this pathway is approved, wet waste could very well be a new source of SAFs. Using wet waste as a resource could lead to a drastic increase in the supply of SAFs, reducing the high price of SAFs while simultaneously reducing the amount of clutter and pollution in landfills. Thus, the development of SAFs has come very far in the past three years, and it shows no signs of stopping anytime soon. As of 2022, five new SAF pathways are working towards qualification according to the International Civil Aviation Organization, and the number of proposed pathways is only increasing. New laboratories have opened up for the express purpose of SAF testing, including one in Washington funded by Washington State University that promises to digitalize and revolutionize SAF research, development and transport. In terms of recent corporate advancements, as of 2022, 38 of the world’s top airlines have committed to net-zero emissions and almost 30 of those airlines have set a target for SAF FuelsMarketNews.com

adoption, according to BloombergNEF. Most promising of all is Virgin Atlantic’s first-ever net-zero transatlantic flight, which will be fueled by a 100% SAF blend composed of waste oils and fats and combined with biochar credits, which is a material that traps and stores carbon from the atmosphere. The flight is scheduled for 2023, and if all goes well, this could be yet another landmark in SAF history. While SAFs remain more expensive than standard fuel, the gap is gradually narrowing, and with the market for SAFs growing steadily, we will see the price of SAF fall below jet fuel eventually. At such a crucial juncture, SAF engineers will continue to push ever forward, towards a cheaper fuel source, and towards a cleaner future.

Dr. Raj Shah is a director at Koehler Instrument Company. He is an elected Fellow by his peers at IChemE, CMI, STLE, AIC, NLGI, INSTMC, Institute of Physics, The Energy Institute and The Royal Society of Chemistry. He can be reached at rshah@koehlerinstrument.com. Dr. Vikram Mittal is an assistant professor at the United States Military Academy in the Department of Systems Engineering.

Beau Eng and Mrinaleni Das are part of a thriving internship program at Koehler Instrument Company in Holtsville, New York, and are students of chemical engineering at Stony Brook University, Long island, where Dr. Shah and Dr. Mittal are on the external advisory board of directors.

FMN Magazine FALL 2023 | 33

BILL DOUGLASS

IN THE LEAD BILL DOUGLASS

MANAGING DIRECTOR DOUGLASS DISTRIBUTING

This industry icon has spent his life fueling the vehicles of North Texas, from filling tanks and wiping windshields to growing a strong wholesale and retail operation

34 | FMN Magazine FALL 2023

FuelsMarketNews.com

n 1947 Humble Oil (later known as Exxon) established a railroad bulk plant in Sherman, Texas. On July 1, 1981, Bill Douglass bought this Exxon consignee, including the local transport division, tank wagon division, lubricants division, and the tires, batteries & accessories (TBA) division. Douglass Distributing was born. Douglass Distributing currently distributes more than 200,000,000 gallons of fuel annually. Its carrier group includes 21 trucks that run 24 hours a day, every day of the year. Its retail division owns and operates 23 Lone Star co-branded sites and employs over 300 team members.

FuelsMarketNews.com

FMN Magazine FALL 2023 | 35

When we were kids, service stations were the only restrooms when you traveled. And they were deplorable. We’ve always focused on the restrooms to offer a different experience.

DESCRIBE HOW YOU ENTERED THE FUEL WORLD. I grew up in a little town with no stoplight, one grocery store, one Humble service station in the middle and one church. I was the church caretaker and the 22 acres it sat on, and the grave digger, where I used a shovel. And then in high school I got recruited by the Humble station to pump gas, lube cars—that type of stuff. This guy came in all the time with a nice coat, tie and hat. And he drove a company car. His name was Connie Conrad, and he was the Humble rep. So, I said, “Connie, how do I get a job like yours?” He said, “Well, kid, you got to do two things. You got to go to college and get your military out of the way.” In those days we were all subject to the draft. He gave me his card and a name to call when I got out. So, I did that. After my time as an officer in the Marines ended in 1961 I called the number, and I got interviewed by Humble’s regional manager. He was a retired colonel from the Army, and he was my final interview. Now, bear in mind this guy has hundreds of people working for him, right? And all he wanted to talk about was my evaluation of how business operates versus the military. After our discussion he hired me. They put me on their fast track and moved me nine times. [Editor’s note: Humble changed its brand to Exxon in 1973.] 36 | FMN Magazine FALL 2023

Finally, in 1981 they wanted me to go to Riyadh, Saudi Arabia. In those days, if you attempted to take your wife she wasn’t allowed to drive a car or go on the street without an escort, which didn’t work for us, and I chose to change my occupation at that point and bought the Exxon consignee in Sherman, Texas. YOU MADE THE TRANSITION FROM BEING A FUELS WHOLESALER INITIALLY TO EVENTUALLY A CONVENIENCE RETAILER. HOW DID THAT WORK OUT? As a wholesaler I had all these dealers that I developed. And we still have 175 dealers we support today. What I did was I would buy the stores when they would go bankrupt or retire. There wasn’t much of a market for two-pump stores in the old days. So, I would be the fallback position. And then I would convert them to convenience stores by remodeling and also expanding the fuel offer. That ran into the 1990s when those opportunities dried up, so you were building your own. WHAT IS THE PRIMARY WAY YOU GO TO MARKET WITH YOUR CONVENIENCE BRAND? Coming from the traditional petroleum side, we have concentrated on the customer experience at the site more than the specific store offers—not that we haven’t put a lot of effort into those areas as well. For example, we put cash acceptors in at our pumps. So, we have cash acceptors and a terrific cash business while the industry has been worried about credit fees. We always worked to have big pumps in our tanks so that when people come in, and eight people are using unleaded at one time, there’s no loss in pressure. We are delivering gasoline at the maximum rate permitted by law so that there’s no delay. FuelsMarketNews.com

PHOTO CREDIT

Bill Douglass remains managing partner. Bill’s son Brad Douglass is CEO of Douglass Distributing and its wholesale operations. His daughter Diane McCarty is CEO of Douglass Distributing Retail, the convenience store operations. At 87, and recently married, Bill, a longtime leader in the industry at large, is considering retirement. We discussed with him how he built up and maintains such a diverse and successful operation.

We put 1000 watt lights up in the days when people were putting in 400 watt lights. We wanted our sites to look like a lighthouse at night and feel safe. We use floor-to-ceiling windows so customers could look in and see that it was safe. And sliding glass doors that were pure glass, no frames, to make entering as seamless and as easy and attractive as possible. We tried TVs at every table in our restaurants. We put in payphones at the booth before cellphones came around. And when the cellphones came, we just gave you a jack to charge your phone and make calls or watch video on your phones. We’ve tried a lot of things. Some worked better than others. YOUR LONE STAR SITES ARE ALSO KNOWN FOR THE RESTROOM EXPERIENCE. We call them Royal Restrooms. When we were kids, service stations were the only restrooms when you traveled. And they were deplorable. We’ve always focused on the restrooms to offer a different experience. When I found out that Las Vegas had toilets with automatic seat covers, I said, we’re going to put that in our stores. We put in all automatic and touch-free restrooms that were sanitary. Tile floors and walls. Booths as well as big urinals that go all the way to the floor, which adds to the cleanliness. For the booths we built single stalls, and the walls went to the ceiling so that you have some sense of privacy. You don’t have to see, hear or smell your neighbor.

production line. And now we run 24 hours. And then they closed their Fort Worth plant, and we took that business. We blend and package for them and we fill about 20 trucks a day. DESCRIBE YOUR LUBES AND COMMERCIAL FUELS BUSINESS. It had been relatively static. We were ExxonMobil for 38 years, but they limited our territory to a few counties in Texas. They offered us a five-year contract last year, and they said you have to drop your other lines. Well, we had to have other lines to meet our customers’ needs in Dallas or Fort Worth or any place here in North Texas. We said we can’t do that—thanks for the memories. So we signed up with Petro Canada, and they have been a fantastic partner. However, by limiting us to a million-gallon distributorship, we couldn’t live on lubes and we had to look at other ways to make money. So we went big into selling petroleum products. We supply the city of Fort Worth, Dallas and the school districts. We’re big into bid business because we’ve got a big fleet of trucks. We deliver to our stores and our customer stores and the cities and counties. And we’re a common carrier, like in Oklahoma, because we have an Oklahoma

DEF IS AN INTERESTING PRODUCT FOR THE INDUSTRY. YOUR OPERATION TAKES IT TO ANOTHER LEVEL. We manufacture DEF, and that’s gotten to be the most profitable thing we do. When it started, supply was limited, and we couldn’t get it. So, we contacted a friend of ours in Houston who had a packaging line, and he was closing out his business. We bought his line and brought it up here and said we’re going to bring in bulk DEF and package it. And we were so successful at it that Old World Industries came to us and said we want you to package for us. And that worked out so well we went to two shifts, and then a second FuelsMarketNews.com

FMN Magazine FALL 2023 | 37

terminal, but we don’t have stores up there in Oklahoma. That’s essentially how it grew. YOU DO A RANGE OF PROPANE BUSINESS. TEXAS IS A HUGE STATE AND THERE ARE A LOT OF PLACES THAT WILL NEVER SEE A NATURAL GAS LINE. DESCRIBE HOW YOU SUCCEED IN THE HOME HEATING MARKET. It’s a good business. It’s essentially what the old heating oil business was in the Northeast. I should know, I was the oil heat manager at Philadelphia in my former [Exxon] life. It’s like a utility with your responsibilities. If you don’t let them run out, they stay with you forever, and we’ve never let them run out. We bought special equipment to deliver during ice storms. And everybody else shuts down. WHAT IS DOUGLAS DISTRIBUTING DOING ON THE EV AND BIOFUELS FRONT? We have biofuel in our diesel, both retail and wholesale, and we have electric chargers. But we can’t afford to put in the high-powered fast

YOU HAVE SO MANY DIFFERENT SIGNIFICANT PROFIT CENTERS. HOW DO YOU MAKE SURE EACH OF THESE UNITS IS OPERATING AT FULL EFFICIENCY AND EXECUTION? First, you bring people up through the ranks that are strong enough to run them. And most importantly, you don’t need a manager, you need a leader. We separate our companies. It’s Douglas Distributing, but operationally it’s Douglass Distributing Fleet. And then Douglass Distributing Retail. We have Douglass Distributing Propane. We manage those through leadership. Great leaders have great organizations. Keith Reid is editor-in-chief and editorial director of Fuels Market News. He can be reached at kreid@FMN.com. PHOTO CREDIT

Coming from the traditional petroleum side, we have concentrated on the customer experience at the site more than the specific store offers—not that we haven’t put a lot of effort into those areas as well.

chargers. In Texas, the public utility commission has its demand charge rate based on your highest usage at any time in the past 30 days. With those, our stores would be paying a minimum of $40,000 a month for the electric bill.

38 | FMN Magazine FALL 2023

FuelsMarketNews.com

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A new year, offering tremendous opportunities. With a full line-up of programming in 2024, NACS has something for everyone.

convenience.org/events

A LOOK AT

FUELS ’ What to Expect from a Transportation Energy Institute Meeting BY KEITH REID

40 | FMN Magazine FALL 2023

he Transportation Energy Institute (TEI), formally the Fuels Institute, is at the forefront of trying to tackle today’s energy challenges. What makes it different from many organizations in the space is the Institute operates as a neutral and non-advocacy entity. Even though it was birthed through NACS, the goal is not to represent the views of the fuel retailers and distributors, but rather assist in the development of the energy policies NACS members (and everyone) must deal with once policies are set. The aim is to ensure that these policies are effective and efficient for all stakeholders. TEI is composed of stakeholders from the breadth of the transportation sector. These include automakers, fuel retailers and marketers, government entities, conventional and alternative fuel producers, the EV charging sector (including utilities) and many niche companies and advocacy groups. They work together to develop research projects to answer fundamental questions as a base of knowledge and starting point to look for common ground and points of compromise. Their sheer diversity ensures these projects are conducted in as neutral a manner as through a peer review process involving parties that often, if not typically,

FuelsMarketNews.com

’23 have opposing public positions on the topics being researched. The Institute also hosts a meeting each year which is, by and large, a symposium with many panel discussions, covering the hottest topics in transportation fueling and energy. This year’s Fuels’ 23 was held May 22-24, 2023, in St. Louis, Missouri. There were 11 sessions and multiple networking functions packed into two solid days of education, discussion and networking. Here is a look at the core topics of conversation at the meeting and some of the interesting positions and points raised by both the speakers and the audience in lively question-and-answer sessions. One note, the Institute operates under what is known as Chatham House Rules. Under these rules no one is specifically allowed to be publicly quoted. The reason for that is the cornerstone behind the purpose of the Institute. Most of the issues being considered have both significant political and economic ramifications and Institute membership covers the spectrum of special interests on those issues. For there to be an open and honest discussion and real potential problem solving, participants must feel free to be say things in an unguarded manner without worrying about those comments being used to damage their organization’s position if weaponized by the opposition. FuelsMarketNews.com

FMN Magazine FALL 2023 | 41

The statements of John Eichberger, TEI director, have been included with his approval. WHO WAS IN ATTENDANCE There were a variety of organizations present, some serving as speakers or panelists, that covered the spectrum of transportation interests. Here is a slice of attendees from different sectors. Representing retailing and marketing you had Caseys, Kum & Go, The Kroger Company, Hightowers Petroleum, CHS, Costco Wholesale, Walmart Stores, Sheetz, Pilot Trave Centers,

Cummins and Toyota. Here are a few of the topics discussed and the general tone of those discussions. ON THE ZERO-CARBON PUSH Eichberger opened the meeting by raising the point that it doesn’t matter if you believe in global warming or not, there is currently a strong push towards a net-zero carbon future among a range of nations, including the United States under the Biden administration, with additional actions nationally at the state level. The current focus is overwhelmingly on a transi-

“It doesn’t matter if you believe in global warming or not, there is currently a strong push towards a net-zero carbon future among a range of nations, including the United States under the Biden administration, with additional actions nationally at the state level.” Offen Petroleum and Venture Fuels, to name a few. NACS, SIGMA and NATSO were also represented. On the EV front there was Electrify America, E Source, Alliance for Transportation Electrification, Techniche and ABB E-Mobility, among others. Oil companies included ExxonMobil, Shell, CITGO, Sonoco, Phillips 66 and Chevron. API and AF&PM were also in attendance. Neste, POET, Growmark, Trillium, Chevron Renewable Energy Group, National Renewable Energy Laboratory, Hydrogen Fuel Cell Partnership and National Corn Growers Association were there representing bio and renewable fuels. OPW, Gilbarco, Source North America, Franklin Fueling Systems, Seneca Companies, Wayne Fueling Systems, JF Petroleum Group and Petroleum Equipment Institute constituted the equipment side of fuel distribution. A range of other associations and organizations were in attendance, including American Lung Association, North Central Texas Council of Governments, Southwest Research Institute, U.S. EPA and Oak Ridge National Laboratory. On the vehicle side there were Volvo Group, 42 | FMN Magazine FALL 2023

tion to electric vehicles, practically to the exclusion of other potential solutions with the exception of hydrogen for heavy trucks. There is a concern among many parties that all the eggs are in one basket. This chokes off research into improved internal combustion solutions (engines and fuels) that might better fit specific needs and prevents opportunities to reduce carbon emissions among the legacy fleet during the many decades that will be required to achieve net-zero transportation. Eichberger further raises the point that you can’t do the environment at the expense of people, or the people will reject the program. Solutions that are not affordable and practical will not gain traction. Therefore, focusing on a singe solution raises the possibility that any setbacks in that area will result in setbacks for the overall push. A question later in the meeting asked what would happen with a change to a more conservative executive branch in 2024. Much of the intensity in the sector now is due to the Biden administration’s emphasis, which was decidedly lacking during the previous Trump administration. It was acknowledged that such a result would likely slow down the national push, yet internationally and at the state level there would likely be fewer changes. FuelsMarketNews.com

THE ROLE OF THE UTILITY IN EV CHARGING The current utility perspective on EV charging was covered in some detail. There was a call to view the utility as a partner as the EV push moves forward. However, nothing in the discussions indicated that significant progress had been made with current points of contention. For example, demand charges, especially in combination with consumer-appealing DC fast chargers (DCFS). With enough volume, demand charges become manageable and charging becomes profitable for the retailer. However, most DC fast chargers have a low utilization rate, averaging approximately 2%, though in certain areas favored by early adopters this can reach 30%. It was noted that a variety of utilities are experimenting with ways to reduce the impact through such initiatives as demand charge holidays or rebates. A flat subscription model is also a possibility. There was no real discussion, as has been the case to date, about utilities being broadly willing to eliminate the demand charge. The state of the electrical grid is another issue that is frequently raised and was discussed at the meeting. It was acknowledged that the grid is not ready now, but utilities know how to plan, and putting together a plan to meet needs over 15 to 20 years is not an enormous challenge. The role of the utility as either an electron provider or as a charging service provider was not discussed in great detail other than to note that both models were being explored by various players throughout the utility sector. One point raised that a great many people probably do not fully appreciate is that an electrical utility does not operate in the same way a private business operates in areas like pricing. As monopolies, they are required to have pricing regulated by state-level boards to meet anticipated needs. One challenge that will be hard to get around is developing an EV charging model where the boards have to move far beyond the traditional considerations they have dealt with since their creation. DECARBONIZING INTERNAL COMBUSTION ENGINES It was noted that the scope of transportation decarbonization is likely not fully appreciated outside of the industry. The challenge is so great that all industry solutions, including but not FuelsMarketNews.com

John Eichberger, TEI director, opens Fuels’ 23.

limited to EVs, will likely be needed. The call was made to allow all potential solution providers to compete in the marketplace with equitable standards and let the market take over for special applications. It was pointed out that from a lifecycle standpoint an EV may have zero emissions from the tailpipe but not when the emissions from the manufacturing process or electricity generation source are factored into the equation. Purely renewable sources of electricity such as wind power are very efficient from a carbon standpoint, but the dominant coal and even natural gas used today come up short under existing IPCC zero carbon goals. Can you fully replace coal and natural gas with renewables? On the ethanol front, it was emphasized that ethanol has a very promising pathway to net-zero carbon and concerns over agriculture’s ability to meet the requirement for more ethanol are unfounded. There is significant existing capacity and that can be increased further without impacting the food surplus or global economic growth. The Renewable Fuels Association showcased the carbon reduction success it enjoyed in a test with plug-in hybrid electric vehicles, in this case a flex fuel 2022 Ford Escape running on E85. There are currently 26 to 27 million flex fuel vehicles that can immediately take advantage of higher blends of ethanol. The benefits of renewable diesel were discussed FMN Magazine FALL 2023 | 43

as a high-performing drop-in fuel that could be used in the market today in existing diesel engines in the commercial sector. This would immediately provide lower carbon outputs for legacy systems as a competitor in heavy-duty use with hydrogen. COMMERCIAL VEHICLES The manufacturers of commercial trucks stated an openness to exploring any technology— CNG/LNG, EV, hydrogen fuel cells, renewable diesel—etc. It was noted that in some areas EV trucks work well, and others not so well depending upon the duty cycle. EV trucks are also currently more expensive than the commercial fleets would like. While the transportation side is addressing the zero-carbon push, the shippers are primarily interested in facing no financial impact through a conversion.

BayoTech provided a test demonstration of a hydrogen transportation trailer, which is part of the infrastructure required for hydrogen fuel cell technology which, as noted, is seen as being a diesel substitute for large trucks. This is just a light overview of the many hours of education, discussion and networking that took place at the meeting. Joining the Transportation Energy Institute allows any interested party to experience all that the meeting has to offer and potentially help shape the solutions that will impact their sectors of the industry. Keith Reid is editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb. com

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INDUSTRY NEWS 4REFUEL ANNOUNCES REBRAND

4Refuel has recently undergone a company rebrand to represent its dedication to sustainable fuel management solutions and an agnostic approach to energy delivery and mobile on-site refueling services. As a North American energy distribution and logistics partner, 4Refuel has introduced core offerings beyond fossil-derived fuel products, and its is continuing to evolve its solutions as advanced fuel engine technology platforms are adopted within key commercial industries. 4Refuel’s latest service capability upgrades, such as GaaS (gas-as-aservice), feature the mobile on-site refueling service 4Refuel is known for with new SWIFT proprietary dispensing technology integrations for applications powered by CNG, RNG and hydrogen.

EXECUTIVE LEADER DESIGNATES NAMES FOR NCR ATLEOS AND NCR VOYIX

NCR Corporation announced that the U.S. Securities and Exchange Commission (SEC) has declared effective the Registration Statement on Form 10 filed by NCR Atleos. The Form 10 relates to NCR’s previously announced plan to split into two independent, publicly traded companies. NCR expects its separation into NCR Atleos and NCR Voyix to close in the fourth quarter of 2023. NCR’s board of directors first approved the plan to separate on September 15, 2022. NCR also announced designated members of the executive leadership teams for NCR Atleos, which will focus on banking services and ATMs, and NCR Voyix, which will focus on digital commerce.

OPW RETAIL FUELING LAUNCHES NEW TSE TANK SUMP

OPW Retail Fueling has announced the creation and availability of its new fiberglass TSE Tank Sump. The TSE Tank Sump is a cost-effective and time-efficient solution for fuel retailers who are looking to optimize performance in their fuel-handling and storage systems. It is the latest model in OPW’s E-Series family of fiberglass containment sumps, all of which are constructed via the Sheet Molded Compound manufacturing process that produces products of premium quality and extraordinary value with short delivery lead times. OPW has brought the SMC process, which is typically used in the premium spa and automotive industries, to the retail-fueling industry to achieve that same high-quality fiberglass standard.

JF PETROLEUM GROUP ACQUIRES MILLER CONSTRUCTION MANAGEMENT

The JF Petroleum Group, a provider of maintenance and repair, equipment distribution, installation and construction services, and fueling system solutions in North America, announced that it has acquired 46 | FMN Magazine FALL 2023

Miller Construction Management Inc. Headquartered in Lakeland, Florida, MCM is a commercially certified, multi-industry contractor serving commercial and retail installation and construction sectors with specialized turnkey solutions for ground-ups, remodels and building additions. MCM offers a single-source solution for design-build services, preconstruction services, green building design and construction, project management and general contracting.

GILBARCO VEEDER-ROOT RETAIL SOLUTIONS BUSINESS REBRANDED AS INVENCO

Gilbarco Veeder-Root Retail Solutions, a worldwide retail and payment technology leader, is rebranding as Invenco by GVR. Invenco by GVR brings together Gilbarco Veeder-Root’s (GVR) time-tested Retail Solutions business with best-in-class technology from recently acquired Invenco. As a global leader in the payments and c-store industries, Invenco by GVR aims to be the operating system for convenience retail, by providing retailers with agile technology solutions that will allow them to increase productivity and drive consumer engagement.

TITAN CLOUD CONTINUES GROWTH TRAJECTORY

Titan Cloud, a leading fuel asset optimization software platform that helps companies reduce environmental risk, decrease maintenance costs and increase fuel sales and profits, announced continued growth and momentum in the enterprise fuel market. Titan Cloud builds on its record-breaking performance in 2022 with an outstanding first half in 2023. The Titan fuel asset optimization software monitors and manages over 65,000 facilities for over 700+ global customers. Furthermore, the data analytics and development teams at Titan continue to make significant advancements in back-end infrastructure modernization to increase scale and performance while also refining the front-end user experience to improve usability and workflow efficiency.

D&H UNITED ACQUIRES TANKNOLOGY

D&H United, a portfolio company of Wind Point Partners and a leading provider of mission-critical maintenance, testing and inspection services for fueling stations and electric vehicle charging infrastructure, is pleased to announce the acquisition of Tanknology Inc. Founded in 1988 and headquartered in Austin, Texas, Tanknology is the global leader in environmental compliance testing, inspection and fuel quality solutions. With a mission-critical service offering and over 100,000 site visits per year, the company is a trusted partner to over 3,000 customers, including many of the largest fueling stations, vehicle rental providers, fleets and healthcare system operators in the United States. FuelsMarketNews.com

OPW VEHICLE WASH SOLUTIONS INTRODUCES LASERGLOW ARCH OPTION

OPW Vehicle Wash Solutions announced the development and availability of the new LaserWash 360 Plus LaserGlow Arch from PDQ Manufacturing, which is one of the most advanced lighting options currently available to the vehicle wash industry today. The LaserGlow Arch technology provides easy-to-understand guidance during the loading process that visually communicates to drivers when they should pull forward, back up or stop as they enter and position their vehicles in the wash bay. This creates a safer, less stressful wash experience for drivers, while their ability to more quickly and efficiently position their vehicle reduces the idle time spent in the bay, resulting in optimized throughput rates.

LSI ANNOUNCES RETIREMENT OF COMPANY FOUNDER AND CEO CHRIS GABRELCIK

Lubrication Specialties, manufacturer of Hot Shot’s Secret high performance lubricants and additives, announces the retirement of company founder and CEO Chris Gabrelcik. Effective at the end of June, Gabrelcik will continue to own and oversee the management of Microwave Renewable Technologies. Gabrelcik began Lubrication Specialties in 1997 with a focus on providing lubrication services to top industrial and commercial accounts to ensure equipment operated at maximum capacity.

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ADD SYSTEMS BREAKS RECORDS WITH ITS LARGEST USER CONFERENCE TO DATE

ADD Systems hosted its largest user conference ever this May. The 2023 Business Tech Conference coincided with ADD Systems’ 50th anniversary and included over 600 attendees and 25 exhibitors. Consistent growth over the years led ADD to hold the 2023 conference at its largest location to date, Disney’s Yacht and Beach Club Resorts. It was a week filled with exciting new software enhancement announcements, educational sessions, user best-practices sharing, opportunities to learn about partner products and services, and many networking and family-friendly events.

TIKTOK AND GSTV STRIKE DEAL

GSTV, the national video network engaging and entertaining targeted audiences at scale across tens of thousands of fuel retailers, announced a new partnership with TikTok. The integration will bring content from the entertainment platform to GSTV’s audience of over 116 million unique monthly viewers across the United States. GSTV and TikTok will engage on-the-go consumers at unique moments of 1:1 attention with culturally relevant, curated content for GSTV. To kick off the partnership, GSTV’s creative studio, Ignite, will create a customized segment each week.

Thank you to these advertisers who have demonstrated their support of the fuels industry by investing in Fuels Market News.

ADD Systems....................................................................................................................... 3 www.addsys.com

OPW Vehicle Wash Solutions................................................................................ 29 www.opwvws.com

American Coalition for Ethanol............................................................................. 15 www.flexfuelforward.com

RDM Industrial Electronics.................................................................Back Cover www.rdm.net

AutoBrite............................................................................................................................... 23 www.autobriteco.com

Source North America Corporation.................................................................45 www.sourcena.com

Cummins & White..........................................................................................................44 www.cumminandwhite.com

The Gorman-Rupp Co............................................................Inside Back Cover www.gormanrupp.com

Dover Corporation................................................................................................... 5 Dover Fueling Solutions www.doverfuelingsolutions.com

THRIVR....................................................................................................................................45 www.Convenience.org/thrivr

Lock America, Inc. dba L.A.I. Group.................................................................... 14 www.laigroup.com

Titan Cloud Software............................................................. Inside Front Cover 1 (615) 372-6000 www.titancloud.com

NACS Events 2024........................................................................................................ 39 www.Convenience.org/events

Trinium Technologies.................................................................................................. 39 www.triniumtech.com/fuel

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FMN Magazine FALL 2023 | 47

REMEMBER THIS?

The Importance of Station Lighting BY KEITH REID

brightly illuminated retail site is a common feature in the industry today. But, while the technology used to illuminate a site has progressed enormously in terms of brightness and efficiency, making a retail site glow at night has long been considered an important operational consideration. Looking back through the pages of National Petroleum News, practically to the earliest days of the conventional fueling station, you see lighting discussed equally (or more so) alongside other design elements. An article by EL Barringer in the July 13, 1938, issue of NPN titled simply “Modern Lighting Is Sales Asset” could practically be run today with a few tweaks for the times. As the article noted: This lighting system has two principal functions to perform, both of which are more necessary for this class of establishment than for most places in the retail business. First, the oil company must see that the lighting equipment installed provides good illumination in the sales arena around the pump island, and in the lubritorium, service department, office and sales rooms. Second, it must attract the attention of passing motorists under wildly varying conditions of traffic, and surroundings. One tweak today would, of course, be the substitution of the convenience and food service marketing areas inside the store for the lubrication and service business that preceded it as the primary non-fuels profit center. However, the goal is the same—get the customer on site, then optimize the sales and marketing opportunities for

core products. Similarly, safety is a consumer-attracting benefit of brightly lit stations that is often mentioned as a benefit today, but not in this 1938 article. Full service was the norm at the time, so the customer was not unattended during fueling and safety was less of a concern. The era of self-service that arose starting in the 1970s changed that dynamic. The article noted that the lighting should be part of an overall presentation, including canopies and pump islands with streamlined proportions and finished with light colors that have high reflecting properties to maximize visual appeal. The article also highlighted one design change that is ubiquitous today: Modern architecture, using vertical and horizontal planes to achieve distinction in station design, is bringing back the canopy, in the designs of many companies. In keeping with developments in general lighting, attractive and efficient lights have been designed for the underside of the canopies. These are individual reflectors, or a trough arrangement with numerous lamps in one long reflector. Since the modern canopy is not deep, the metal part of the reflector is recessed in the canopy with only the glass covering showing. Cost has always been a consideration. The article discussed the benefits of higher wattage lighting that provided superior illumination at the expense of a higher electric bill. It was noted that electricity was typically the third-largest operating expense for the station after payroll and rent. Of

that, approximately 70% was related to lighting and 60% specifically for outside illumination. Replacing a 750-watt lamp with a 500-watt lamp might have seemed appealing; however, that only saved about six cents per evening, which in terms of gross profit amounted to approximately 1.5 gallons of gasoline. If the greater appeal from the brighter station resulted in only one extra customer, that would often make up for the total cost difference. Further: … by increasing the volume of floodlighting some service stations have increased gasoline sales very materially. Similarly, more efficient types of lighting were also discussed. Mercury and sodium lighting were efficient alternatives to standard incandescent lights back in the 1930s. While more efficient, they came with various quirks that had to be addressed. For example, Mercury tended to have a green hue and sodium a yellow hue and the lighting experts suggested that the colors used on the station be adjusted accordingly to be complementary. Of course, those technologies have themselves been replaced today by LED lighting, which is even more efficient, brighter and far more flexible.

Keith Reid is the editor of Fuels Market News

For more than 100 years, from its founding in 1909 to when it went out of business in 2013, National Petroleum News (NPN) documented the rise of petroleum marketing and retailing in the United States. NACS, PEI and The Fuels Institute have catalogued the rich history of NPN in its entirety. Each issue of Fuels Market News will look back at the history of our vibrant industry, through the eyes of NPN, to see how it reflect the issues, challenges and opportunities we face today.

48 | FMN Magazine FALL 2023

FuelsMarketNews.com

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