Fuels Market News Magazine Fall 2019 by Fuels Market News

FALL 2019

Your Source for News and Information

Reversal of Misfortune

Oil in the U.S. Part 3

The Next Energy Crisis Select the Perfect

Car Wash Site

Discerning E15 Kernels of Truth

Wet Hosing

vs. Onsite Fuel Tanks

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features

Next 6 The Energy Crisis by Joe Petrowski

of 18 Reversal Misfortune: Oil in the U.S., Part 3 by Nancy Yamaguchi, PhD

36 Discerning the E15 Kernels of Truth by Joe O’Brien

Tips to Help 40 14 Select the Perfect Car Wash Site by David Dougherty

Reasons You Should 46 15 Consider Prefabricated Fueling Systems for Your High-Volume Site by Ed Kammerer

Hosing Versus 58 Wet Onsite Fuel Tanks by Michael O’Brien

Land O’ Taxes

contents

by Department

PUBLISHER'S NOTE

FUELS & SUPPLY

Is Your Diesel Winter Ready?

16 The Data Pipe to the Site

32 Where Are You Losing Fuel?

Policy Brief: Land O’ Taxes by Keith Reid

The Cost of Going All Electric Might Be…More Dollars and Higher Emissions by Ezra Finkin

Is Your Diesel Winter-Ready? by Rebecca Richardson

RETAIL OPERATIONS

Ensuring Retailers Receive the Correct Fuel Type and Amount Every Time by Randy Robinson

The Data Pipe to the Site by Keith Reid

The Loyalty Technology You Should Know About by Brandon Logsdon

Where Are You Losing Fuel? by Richard Browne

Why Is It So Hard to Get a Good Cup of Coffee in a C-Store? by Roy Strasburger

COMMERCIAL FUELS

Multifuel Truck Engine Lubricant Technology by Jamie Musmacher

BUSINESS OPERATIONS

Why Is It So Hard to Get a Good Cup of Coffee in a C-Store?

What Could Possibly Go Wrong? by Brian Reynolds

Fool-Proof Way for Marketers to Increase Inside and Outside Sales by John J. Kimmel

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PUBLISHER’S NOTE

From the Desk of the Publisher Welcome to the 2019 Fall Issue of Fuels Market News Magazine where we are driven to provide timely, relevant industry news, in-depth feature articles and thought-leader analysis. As the summer driving season has finished, we find that despite predictions by the media that those bad old oil companies would raise prices just in time to gouge vacationing consumers— gas prices this year were actually down from last year. And, as Fall arrives, prices are continuing to drop, so the prognosticators have once again missed their marks. Why is this? Because the U.S. is swimming in oil reserves and the supply we do not consume, we export to the rest of the world that is working hard to catch up to us in percentage of automobile ownership. As long as consumers are purchasing cars that burn gasoline, the oil companies will continue to produce, refine and supply the fuel needed to drive them. In simple terms, demand drives supply every time! In the U.S., consumers are very positive about the economy and they are continuing to spend money buying new cars—not electric or gas-saving small cars in any great numbers. Amidst all the anti-transport fuel hysteria, the U.S. passed a major milestone this year. We now own over 450 million total registered vehicles. That number is made up of 285 million passenger vehicles and 165 million commercial trucks equaling 1.39 vehicles for every person in the U.S. That amounts to 3.3 trillion miles driven or 7,300 miles per vehicle, consuming 220 billion gallons of fuel at an average 15 gallons/mile. Latest U.S. passenger vehicle inventory by fuel type:

EDITORIAL STAFF CEO & Group Publisher Gary D. Bevers GBevers@FMNweb.com Editorial Director & Digital Publisher Keith Reid KReid@FMNweb.com Director of Production & Managing Editor Kathy Bevers KBevers@FMNweb.com Digital Editor Scott A. Croom SCroom@FMNweb.com Industry Analysts/Editors Frank M. Hunter FHunter@FMNweb.com Nancy Yamaguchi, Ph.D. NYamaguchi@FMNweb.com Columnists and Contributors Greg Cushard Vladimir Collak

Gasoline-Powered

248 million vehicles (87%)

Flex Fuel Vehicles

20 million vehicles (8%)

John Eichberger

Diesel

7.4 million vehicles (3%)

Doug Haugh

Plug-in Electric

5.5 million vehicles (2%)

Hybrid

4.1 million vehicles (2%)

Shane Dyer

The 165 million registered commercial trucks primarily use diesel fuel.

Corey Henriksen Maura Keller Alan H. Levine Joseph H. Petrowski W. Brian Reynolds

With these 450 million vehicles, we move people and goods over 17 million miles of roads employing 15 million people out of 132 million total employment. This demonstrates we are a country in love with free and unfettered transportation and the auto and truck remain the backbone of our economy and society. The bottom line is despite higher CARB gas mileage targets, Americans are driving more miles and buying more fuel, which is good news for our industry!

Fred M. Whitaker Editorial Board Ed Burke Lisa Calhoun George A. Overstreet, Jr. Joseph H. Petrowski

I hope you enjoy this issue of Fuels Market News Magazine, and we always appreciate your thoughts and feedback. Visit our website at www.FuelsMarketNews.com, and while you’re there, please go ahead and subscribe to one of three weekly e-newsletters as well as our newest publication, the Fuels Market Watch: Friday Report, which analyzes the week’s news and statistics regarding fuels and pricing. Feel free to reach out to me personally at GBevers@FMNweb.com or my cell: 832-444-7675. I’m always happy to hear from you.

Art Director Jeff Beene JBeene@FMNweb.com Marketing Director Joe A. Martinez JMartinez@FMNweb.com Advertising Representative Bill Kaprelian 262-729-2629 BKaprelian@FMNweb.com

Gary Bevers CEO & Group Publisher

FMN Magazine

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by Joe Petrowski

The Next

The next energy crisis will not be in transportation fuels. We recently had a massive power outage in New York City and while the cause is still uncertain, blackouts and brownouts will be the new norm in energy in the coming decade.…

The United States has ample reserves, including the Permian, and advanced technology (especially fracking and lateral drilling) along with deaccelerating demand will guarantee that. But that does not mean we are totally out of the woods. Power production is the Achilles heel in the U.S. energy sector. We recently had a massive power outage in New York City and while the cause is still uncertain, blackouts and brownouts will be the new norm in energy in the coming decade.

NATURAL GAS:

The reason is simple as it always is: supply and demand. The U.S. currently consumes 4.4 trillion kilowatt hours (kWh) per year (one home uses about 12,000 kWh per year). Demand is growing four percent per year primarily because of the electrification of our economy and our healthy GDP growth, implying that in a decade our demand will be 6.2 trillion kilowatts (or over 8 trillion if electric vehicles capture market share). Where do we currently get that 4.4 trillion kWh?

There are 1,800 natural gas power plants generaing 1.5 trillion kWh or 800,000 kWh per plant each year. While our natural gas reserves exceed our ample petroleum reserves, and natural gas power plants possess all the attributes we need (base load, instant start to stabilize grid, relatively clean and inexpensive), state and local regulators are blocking the necessary pipelines and we are currently wastefully flaring natural gas in the Permian Basin. Further, natural gas has traded at a negative value, which is generally unheard of for a commodity. The best-case scenario is we will add boilers to existing plants, adding 150 billion kWh per year to the supply ledger.

There are currently 8,652 power plants in the United States, meaning the average power plant produces 486,000 kilowatts per year. Our fuel sources for these power plants are:

COAL: Currently 589 plants are still running. Some 111 shut down in the last five years, but operating plants still are producing 15.5 billion kilowatt hours or 37% of our usage. All proposed new plants have been cancelled, and the best estimate is that another 200 plants will be shut within the next decade—without a carbon tax that would all but eliminate all coal-fired plants. That will eliminate 6 billion kilowatt hours from supply (440,000 homes equivalent).

RENEWABLES: 1 Hydroelectricity generation produces 300 billion kWh from 81 operating plants that are among the oldest in the nation (1908 start date for 50 of them). No new hydro plants are planned, and the best estimate is that 40 of them will be shut, shedding another 150 billion kWh of supply. And hydro is extremely regional; five states have 50 percent of capacity: Idaho, California, Washington, Oregon and Vermont. Also, hydro is vulnerable to water and snowpack supply.

NUCLEAR:

2 We currently have 1,721 commercial solar installations produc-

This should be the love of the anti-carbon crew, but it is seen by the green left as being just as bad, if not worse, than carbon-based fuels. Some 59 nuclear plants are operating, producing 800 billion kWh (13 billion kWh per plant year). No new nuclear plants will be built and one half of those in service are expected to be decommissioned in next decade (removing 400 billion kWh from the supply). FMN Magazine

“ ”

ing 42 billion kWh of power. Through state and federal subsidies and lower-priced panels, we could see a doubling in the next decade, adding 50 billion kilowatt hours to supply. But, supply is so weather-dependent that we will have to see an increase in quick-start plants to stabilize the grid or develop sufficient storage capacity to capture daylight production for evening use.

FuelsMarketNews.com

FUELS & SUPPLY

Energy Crisis 3 We currently have 1,000 wind producing facilities producing 300 billion kWh per year. With generous subsidies and regulator support, we could see 200 billion kWh added in a decade, but ironically, the push-back on new installations (i.e., Nantucket and Long Island sound) is almost as intense as on nuclear and carbonbased fuels. So, to sum up, the ledger looks as follows:

So, what can we do privately and publicly to moderate or eliminate this next energy crisis?

1 We need to build at least 4,000 new power plants (natural Gas) and/or install carbon sequestration facilities at existing fossil fuel facilities.

2 We need more natural gas pipelines. 3 Power storage systems need a high public/private focus

Demand in Billion kWh

4 Private power (generators generally fueled by propane

Coal

2030

4,394

6,200

1,500

950

or natural gas) needs incentives on par with what we grant to solar. t

Supply/ Source

Today

5 Fix your power price to remain as long as you can, with severe penalties for interruption.

6 Inquire about interruptible rates, which will be offered Nuclear

800

400

Nat gas

1,500

1,650

Hydro

300

150

Solar

Wind

252

500

Total:

4,394

3,700

by many suppliers, if you can afford to. Read very carefully how long and how many times you can be interrupted.

7 Buy flashlights, portable radios and devices such as portable air conditioners that run on water and D batteries.

8 Differentiate among politicians whose energy policy is simply to demonize fossil fuels and get giddy when solar and wind are discussed. Our needs are more complex. n t

Balance: -2,500 19% Shortfall And remember, with most electricity produced by regulated power companies or long-term contracts, imbalances are not calibrated by price but by allocations, supply cuts (brownouts and blackouts) and mandated demand interruption. And with storms, terrorism and random operating breakdowns, we need a surplus of power to maintain the system.

Joe Petrowski Joe has had a long career in international commodity trading, energy and retail management and public policy development. He currently serves as Director of Fuels for Yesway, where he oversees all operations of the fuels team, including pricing, procurement and management of the firm’s fleet services program. In 2005, he was named President and CEO of Gulf Oil LP and elected to the Gulf Oil LP Board of Directors. In October of 2008, he was named CEO of the now combined Gulf Oil and Cumberland Farms, whose annual revenues exceed $11 billion and that now operates in 27 states. In September 2013, Petrowski stepped down as CEO of The Cumberland Gulf Group. He is Managing Director of Mercantor Partners, a private equity firm investing in convenience and energy distribution, and a member of the Gulf Board.

FMN FUELS MARKET WATCH: FuelsMarketNews.com FMN Magazine

FuelsMarketNews.com

by Keith Reid

Policy Brief:

Land O’ Taxes

“I’m not just the president of Hair Club for Men, I’m also a client!” This line from Sy Sperling’s 1986 commercial jumped to mind when I began writing this Policy Brief. My version would be: “I’m not just writing about Illinois’ expansive new motor fuels taxes; I get shafted by it every time I ﬁll the tank!” So, use this as a bit of disclosure to the fact that I may not be completely impartial where this issue is concerned.

“

There seems to be a belief that if any fuel tax increase is not overly oppressive, you have fertile ground to harvest revenue.

FMN Magazine

FuelsMarketNews.com

FUELS & SUPPLY The fracking revolution created an opportunity to generate fuel tax revenue that would have been more difficult previously. We had constant price volatility, high (and rising) inflated oil prices and the resulting high refined fuel prices going into the recession of 2008. Then, prices bottomed out, and as we moved out of the recession the enormous production potential of domestic fracking ensured that while prices would recover somewhat the upside would largely be capped. Politicians apparently noticed that consumers became, at some level, numb to paying more (within limits) for motor fuels during the bad years. There seems to be a belief that if any fuel tax increase is not overly oppressive, you have fertile ground to harvest revenue. Granted, the surface justification for fuel tax increases has some validity. Our ground transportation infrastructure, typically funded by motor fuel taxes, has been neglected and revenue is lacking to turn that around. This results in real costs to society. There are a variety of reasons for this shortfall. Vehicles have become more fuel-efficient, there has been at least some penetration of electric and hybrid vehicles and in recent years (2008 – 2015) demand had been relatively flat. Less fuel to tax results in less funds to use. A total of 12 states recently passed increases to their motor fuel taxes. Most of them are under two cents per gallon (and generally well under). For gasoline, California comes in with a 5.6 cent increase. Ohio with a 10.5 cent increase. In my home state, Illinois, the increase was a whopping 19 cents per gallon for gasoline and 24 cents per gallon for diesel. Included was an automatic tax increase tied to inflation. Similar tax increases were deployed for alternative fuels like propane. To be fair, the previous 19 cent gasoline tax dated back to 1990. The doubling of the tax to 38 cents per gallon more than makes up for that lapse. The tax increase is part of the 2020 state budget, a $45-billion Illinois infrastructure plan pushed by the new Democratic Governor J.B. Pritzker. Ironically, Pritzker is a billionaire who notably tried to avoid paying $331,000 in taxes on a Chicago property by tearing five toilets out of the mansion to get it classified as “uninhabitable.” The tax increases were pushed through by Democratic supermajorities in both the state house and senate. I should note that in my observation Illinois is generally bipartisan where taxes and spending are concerned. Except for the previous Republican Governor Bruce Rauner, who’s “Turnaround Agenda” saw stiff resistance and resulted in no budget for two years of his term, the Illinois GOP seems to be more interested in getting their slice of the pie rather than trying to make the pie significantly smaller. The ILGOP generally supported Pritzker’s 2020 budget. As the Illinois Policy Institute notes, the tax increase, which became effective July 1, pushes Illinois to the second-highest gas taxes in the nation. But it doesn’t stop there. On the surface, the state fuel taxes are not necessarily far out of line with some neighboring states, Indiana most notably. However, municipalities in Cook County, FMN Magazine

“ ” As the Illinois Policy Institute notes, the tax increase, which became effective July 1, pushes Illinois to the second-highest gas taxes in the nation.

such as Chicago, can increase their taxes by three cents, and other “collar counties” around Chicago can increase their taxes by between four and eight cents per gallon. As the Illinois Policy Institute notes: Illinois is one of just seven states where drivers pay layers of both general sales taxes and special excise taxes on gasoline at the state and local levels. Those multiple layers mean drivers filling up in Chicago, for example, will pay 96 cents in taxes and fees on a $2.46 gallon of gasoline—an effective tax burden of 39%. The expected costs to motorists start at $100 per year, with two to three times that figure being noted as possible depending on a range of factors. But wait, there’s more! Other exciting revenue plays include: n Vehicle registration fees will increase by about 50 percent from $98 to $148.

n The owners of electric vehicles will see $248 in new fees. n The Illinois minimum wage will ramp up from $8.25 to $15 by 2025 at about $1 per year. n The cigarette tax will go up by $1, from $1.98 to $2.98 a pack. n E-cigarettes will be taxed at a rate of 15 percent. When combined with the last three items, the fuel tax represents a disaster for Illinois fuel retailers. “When the difference on the border was 8 – 10 cents, it wasn’t too bad, but now we are expecting a 50% or higher drop in volume,” said Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association/Illinois Association of Convenience Stores, when I interviewed him recently. “That should extend, to some degree, as far as 50 miles from the border. And when you combine that with a $1 per pack increase in the cigarette tax and the increase in the minimum wage and an increase in the sales tax—this is devastating.” He noted several quality stations in a border county have already been posted for sale. He expects many stations to close, perhaps hundreds, as a result of these developments. As this Policy Brief was being written, the price differential between Illinois and neighboring states ranged between 20 cents less per gallon (Indiana) and 50 cents less per gallon (Missouri), according to AAA. Fleischli’s concerns are further FuelsMarketNews.com

FUELS & SUPPLY

Policy Brief: Land O’ Taxes

reinforced by numerous local television stories covering the exodus of customers to stations across the border the day of the tax increase.

Accountability shows just how troublesome. Illinois’ $2.98 cigarette tax compares to its border states as follows: Indiana (99.5 cents); Kentucky ($1.10); Iowa ($1.36); and Wisconsin ($2.52). The difference between Illinois and Missouri is the starkest. At just 17 cents tax per pack in Missouri, it will cost $28 more for a carton of cigarettes in Illinois.

For commercial fleets the news is also troublesome. Local and regional fleets will see a significant cost increase on the fuel side, but there has been a repeal of a 14.35 percent commercial distribution fee for vehicles that weigh between 8,001 and 80,000 pounds. That should save hundreds of dollars per vehicle, though other registration fees have increased that partially offset the savings.

But what about the money?

Over the road truckers will generally see incentives to bypass Illinois as a fueling location whenever possible. As this article was being written, the price differential on diesel ranged from 3 cents less (Indiana) to 34 cents less (Missouri), with at least a 20-cent difference compared to Iowa and Wisconsin, according to Truckmiles.com.

The push for increases in federal and state fuel taxes would have greater validity if the money was well spent and fully devoted to infrastructure needs. Unfortunately, that is not the case. The federal tax on gasoline is 18.40 cents per gallon and diesel is 24.40 cents. The U.S. Energy Information Administration noted that as of January 1, 2019, the average of total

The cigarette tax is especially troublesome for border stations. Data from the Commission on Government Forecasting and

“ ” At just 17 cents tax per pack in Missouri, it will cost $28 more for a carton of cigarettes in Illinois.

FMN Magazine

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Policy Brief: Land O’ Taxes

“ ” An Illinois Policy Institute analysis found at least $1.4 billion of waste and pork spending in the $45 billion infrastructure plan that accompanied the tax increases.

state taxes is 28.68 cents per gallon for gasoline and 30.43 cents for diesel. These taxes are supposed to be set aside to support the infrastructure associated with highways and other road transportation needs. However, that is typically only partially true. As the libertarian Cato Institute notes, in 2016 the states raised $44 billion, supposedly for highway use, but diverted an average of 24% to other projects such as urban mass transit (and many other projects that have little if anything to do with transportation, such as squirrel sanctuaries). In Illinois that figure was 30%.

The 2020 budget itself is not honestly balanced, relying on “optimistic” revenue projections. It’s the highest spending budget ever. Even the revenues raised by legalizing marijuana and gambling tend to support new spending rather than fix serious vulnerabilities. So, what to expect? In a perfect world these overreaches would generate a backlash that would see a political change and some motivation to support fiscal sanity before it’s too late. I doubt that will be the case. My predictions: n Residents’ current anger will subside, and Illinois citizens will get used to the taxes and continue as usual, thus furthering the state’s decline.

The Illinois fuel tax hike is expected to generate an additional $1.2 billion. That will be split between the state and local governments. According to Pritzker in a press conference: “Every dollar that is coming in from the motor fuel tax is going into a lock box that only goes to roads and bridges and our surface transportation needs across the state, so people know that that money will be spent well.” Notably the press conference took place at the Chicago Transit Authority headquarters and not some Illinois highway overpass. Nearly $5 billion will go to transit agencies like the CTA and Metra.

n Illinois residents who think they will be more on the receiving side will outnumber those on the giving side and will approve the proposed progressive tax plan next year. It also opens the door for unlimited increases in the corporate tax. The middle class will find out they have a lot more in common with those “millionaires” than they thought. n Fuel and cigarette tax revenues will not reach the expected goals as those who can cross state lines for cheaper alternatives will, but likely enough people will be trapped far enough away from the border to keep the increases from being totally ineffective. Expect more tax increases to follow.

Fleischli noted that the last two Illinois budgets saw some $350 million siphoned from the road fund, such as the $30 million used for emission testing. While some of the varied motor fuel taxes are mandated, the motor fuels sales tax, for example, is not. An Illinois Policy Institute analysis found at least $1.4 billion of waste and pork spending in the $45 billion infrastructure plan that accompanied the tax increases. It cited funding for pickleball courts, swimming pools and vague grants to be handed out by politicians and well-connected insiders. On the last part, the savvy Illinois resident is not the least bit surprised. Even for the clearly needed projects few bulldozers move, or concrete gets poured without the appropriate political connections and “beak wetting.” All of this might be palatable to an Illinois resident if the money diversions and waste and graft at least partially addressed Illinois’ terrible financial situation. All of Illinois’ five state pension funds are grossly underfunded and cannot be revised without amending the state constitution. The funding that has occurred has featured significant and questionable borrowing in recent years. The state’s credit rating is the worst in the country and is approaching “junk” status. There hasn’t been an honestly balanced budget since 2011. FMN Magazine

n Volumes will drop at stations near the border and it will be a disaster for those operators. n Local and regional fleets will have to tighten the belt. n The mass exodus of citizens and businesses already underway from Illinois to other states will only increase. Your author has already started to investigate some nice areas in Wisconsin. Any Chicago sports fan would understand my cynical pessimism. However, miracles do happen. The Bears did get into a couple of Super Bowls in my lifetime, winning one with one of the best teams to play the sport. And the Cubs won a World Series, reportedly causing freezing temperatures in a traditionally warm netherworld. So, we’ll see…. n

READ MORE at FuelsMarketNews.com

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The Cost of Going All Electric Might Be… More Dollars and Higher Emissions by Ezra Finkin

There is a compelling economic, air quality and common-sense case to be made for investing in new diesel technology for getting kids to and from school. New advanced technology diesel-powered school buses are cost-effective, proven, safe, reliable, durable and a near zero emissions option today for all school districts.

“

Thanks to diesel’s low cost relative to other propulsion options, more emissions can be reduced by replacing older buses with new advanced technology diesel-powered buses.

Today, 95 percent of the roughly 500,000 school buses operating in the U.S. are powered by diesel engines. It remains the technology of choice for most school districts. Some will ask, “Why is that, particularly when hearing more about new options available like electric and propane?” The answer is that diesel provides the best all-around combination of safety, reliability, operating range, durability and low-cost ownership and operation, widely available fueling and repair networks, expanded utility beyond routine routes, and ability to use high quality renewable biofuels. And today’s generation of diesel adds an important new attribute: near zero emissions.

FMN Magazine

FuelsMarketNews.com

Thanks to diesel’s low cost relative to other propulsion options, more emissions can be reduced by replacing older buses with new advanced technology dieselpowered buses. Some analysts conclude that all-electric buses may come with a price tag three times that of a new diesel bus. School districts looking to replace older buses frequently operate within very tight budgets. One school district in California determined that going allelectric would cost almost $4 million more than replacing its aging fleet of 32 buses with new diesel options. Four million dollars is big money for small school districts. Beyond costs, many rural and suburban districts operate in remote areas or those with temperature extreme

FUELS & SUPPLY

“

Is the high-priced investment in electric school buses that only operate for a few thousand miles a year, for just a few hours a day, for only 9 – 10 months a year a strong case for the use of limited education funding dollars?

”

conditions with established routes that may extend beyond the range capability of a battery. Other school districts may not have the financial wherewithal to invest in a network of expensive charging stations. The city of Aspen, Colorado, determined that the cost of purchasing and installing a single charging station came with a $160,000 price tag. That’s about the cost of another new diesel bus, which amplifies an important point: acquiring electric buses and their required infrastructure actually can have the unintended consequence of having more kids riding on older buses and generating higher fleet emissions overall due to cutting back on basic turnover of the existing fleet.

emissions depend on where the electricity comes from. School districts have another low-carbon, greenhouse gas emissions-cutting option by running their diesel bus fleet on high-quality advanced renewable biofuels that do not require any additional investments in refueling infrastructure—and can cut carbon emissions by at least 50 percent overnight. In the case of advanced renewable diesel fuel, the greenhouse gas-eliminating power is over 80 percent. In California, the California Air Resources Board recently found that fueling diesel buses, trucks and other heavy-duty equipment with renewable diesel and biodiesel is the leading contributor to reducing greenhouse gas emissions from their transportation sector. Exponentially more tons of carbon emissions in California have been eliminated with the use of these fuels than by relying on all-electric cars and trucks.

Cumulative CO2 Reductions (millions tons)

Another important consideration is purely economic. Is the high-priced investment in electric school buses that only operate for a few thousand miles a year, for just a few hours a day, for only 9 – 10 months a year a strong case for the use of limited education funding dollars? For most fleets, choosing the new diesel option may actually reduce more emissions, because for the same amount of limited pupil transportation dollars, older and higher-emitting buses can be replaced at lower cost than buying a few electric buses. The State of Arizona determined that, for a fixed investment in new buses, three times as many emissions could be reduced by replacing more, older and higher-emitting buses with the diesel option than with all-electric!

Renewable Diesel & Biodiesel Ethanol Electricity Fossil Natural Gas Biomethane Source: California Energy Commission, Low Carbon Fuel Standard Dashboard

Getting more kids to school safely, affordably and reliably within the means and budgets they have is best done by investing in the latest generation of proven and available advanced diesel technology. n

FMN FUELS MARKET WATCH: FuelsMarketNews.com

Ezra Finkin Ezra is the policy director for the Diesel Technology Forum. The Diesel Technology Forum is a non-proﬁt organization dedicated to raising awareness about the importance of diesel engines, fuel and technology. Diesel Technology Forum members are global leaders in clean diesel technology and represent the three key elements of the modern clean-diesel system: advanced engines, vehicles and equipment; cleaner diesel fuel; and emissions-control systems.

All fuels and technologies have their pluses and minuses. Electric buses may have no tailpipe emissions, but ultimately

FMN Magazine

FuelsMarketNews.com

by Rebecca Richardson

Is Your Diesel Winter-Ready? With crisp fall temperatures on the way, itâ&#x20AC;&#x2122;s time to think about preparing fuel for winter operations. One of the myths that persists about wintertime fuel is that biodiesel canâ&#x20AC;&#x2122;t be used in cold weather. In truth, biodiesel blends can be used year-round everywhere ultra-low sulfur diesel (ULSD) is used. With proper fuel maintenance, diesel powered equipment can perform well this winter on either ULSD or biodiesel blends up to B20.

All diesel fuels require maintenance steps to ensure proper winter performance, and biodiesel is no different. FMN Magazine

FuelsMarketNews.com

FMN TEXT FALL19.qxp_Layout 1 9/11/19 8:44 AM Page 17

“”

FUELS & SUPPLY

Regardless of the type of fuel, it’s important to ensure that cold flow properties are adequate for your climate at the time the fuel will be used.

Understanding Avoid Water Cold Flow Contamination Regardless of the type of fuel, it’s important to ensure that cold flow properties are adequate for your climate at the time the fuel will be used. Two cold flow measurements are critical for standard No. 2 diesel fuel as well as for biodiesel:

If you’re a fuel supplier, make sure customers’ fuel tanks are free from water or other contaminants going into winter. Water is the most common source of fuel filter plugging issues in diesel vehicles during the winter. When temperatures drop below freezing, any excess water in the tank can freeze and block the flow of fuel through the filter.

Cloud Point (CP):

Water in the tank also leads to microbial growth. Microbial contamination has become more common since the introduction of ULSD in 2006. Previously, the high sulfur content in diesel fuel acted as a natural antimicrobial agent.

The temperature at which wax or gel crystals first appear in the fuel, making it appear cloudy or hazy.

Cold Filter Plugging Point (CFPP): The temperature at which larger crystals form and start to plug the fuel filter. CFPP generally indicates the lowest temperature for vehicle operation. To prevent engine power loss, the CFPP needs to stay below wintertime low temperatures. Cold flow properties for diesel fuel can vary based on crude oil source and how the fuel has been refined and blended. For biodiesel, feedstocks used for its production can affect cold flow. Regardless of the fuel type, it’s important to winterize the fuel to withstand the expected weather. Additives help lower the CFPP and improve the flow of both diesel and biodiesel blends during below-freezing temperatures. For optimal vehicle performance it’s important to determine additive needs and apply them before fuel reaches the CP temperature. Another way to improve cold flow is to combine No. 1 diesel, or kerosene, with diesel or biodiesel blends. However, kerosene has a lower BTU value than diesel and can reduce fuel economy. Additives are generally less expensive and perform just as well as kerosene to improve winter performance. If using No. 1 diesel, put it into the tank first, with No. 2 on top, to achieve a better blend.

FMN Magazine

A Bacon Bomb is an inexpensive and easy way to retrieve fuel samples to test storage tanks for water and microbial contamination. This device collects samples from the tank bottom, where free water and sediment can settle. Collected fuel samples should be clear and bright. Hazy fuel indicates water contamination. If fuel contains water, take steps to clean and remove it, or consider a deicer to keep the water suspended and moving through the system during cold weather. Also test for microbes and treat contaminated tanks with a biocide. If contamination is severe, the tank may need to be drained and cleaned. Because the Illinois Soybean Association recognizes the critical importance of tank maintenance for proper fuel performance, the Illinois soybean checkoff program offers free tank testing to retail locations and municipal fleets in Illinois that carry biodiesel fuel. Illinois retailers and fleet operators can contact Pete Probst at pprobst@indigenous-energy.com for more information. With proper maintenance and basic housekeeping practices, customers can expect problem-free performance from either ULSD or biodiesel blends up to B20 this winter. n READ MORE at FuelsMarketNews.com

Rebecca Richardson Rebecca is the Biodiesel Lead for the Illinois Soybean Association. ISA is a statewide organization that strives to enable Illinois soybean producers to be the most knowledgeable and proﬁtable soybean producers around the world. For more tips on cold-weather fuel operation, visit the National Biodiesel Board website: http://biodiesel.org/using-biodiesel/handling-use/cold-weather-guide

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This is the third installment in our series “Reversal of (Mis)Fortune: Oil in the U.S.”

by Nancy Yamaguchi, PhD

Reversing the downward slide in U.S. oil production was a mighty feat, displacing a massive chunk of imports and converting the U.S. into a major oil exporter as well (though not a net exporter). Oil plays a complex role in the economy, and its impacts vary from entity to entity and place to place. In this installment, we continue our series by examining the impacts of the shale boom on the U.S. economy. This is a convoluted topic. The shale boom has created wealth for many, it has allowed the U.S. to sharply reduce its dependence on imported oil, it has created jobs, and it has forced oil prices down. Singing praises too loudly can make one sound like a paid cheerleader, whereas heaping scorn on the oil industry can make one sound like a hypocrite. In keeping with the theme of this series, the author’s goal is to provide insights and fuel-neutral analysis, acknowledging that the shale boom is good fortune for some, misfortune for others.

The Challenge of Measuring Economic Impacts If global petroleum was a simple industry, perhaps it would be easier to calculate the economic impacts of the U.S. shale boom. But it is a hugely complex industry. It also is politically charged, and market participants may interpret data in ways that support their own views. Moreover, it is possible to pick and choose the data sets and studies that best support an existing point of view. Studies and economic analyses, no matter how well-intentioned, are scrutinized with the question, “who paid for this?” In many instances, these studies have access to confidential or proprietary data that the public lacks. Calculations of externalities and knockon effects are always difficult. They also may be shaky, obscure, or outright self-serving.

Editor’s Note: Parts 1 and 2 of Dr. Yamaguchi’s series “Reversal of Misfortune: Oil in the U.S.” can be read online at issuu.com/fuelmarketernews. Select the Winter 2019 and Spring 2019 issues.

“ ”

If global petroleum was a simple industry, perhaps it would be easier to calculate the economic impacts of the U.S. shale boom. But it is a hugely complex industry.

FUELS & SUPPLY

Reversal of Misfortune: Oil in the U.S. Part 3

FMN Magazine

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FUELS & SUPPLY

Reversal of Misfortune: Oil in the U.S.

At the ground level, it makes intuitive sense to assume that the minimum impact of the Shale Boom on the U.S. economy is one where XX barrels of newly produced oil displace YY barrels of imported oil. The concept resembles import substitution, although import substitution strategies typically are adopted by governments, and they focus more on value-added industries rather than the production of primary commodities. Even this seemingly simple equation is data-intensive and leads to additional questions, such as:

Table 1 presents the data inputs for a simple comparison of the “savings” on crude imports, starting in 2008, when U.S. oil production began to rebound. Our “Hypothetical Steady State” scenario assumes that crude production stays flat at its 2008 level of 5013 kbpd. This likely is a generous assumption, since production was trailing down. The “Actual Net Imports” column is annual crude imports minus crude exports, as reported by the EIA. We ignore unaccounted-for crude oil, stock changes and changes in the Strategic Petroleum Reserve. Refiner input is accepted as the total demand for crude.

• How much oil of what type and price was displaced by how much oil of a different type and price? • What was the period of time?

• What was the cost of transport, storage, processing? • Who owned the domestic oil and who owned the displaced imports, in what shares? • Was the oil taxed at the U.S. and local level?

• How much added toll on the environment was placed by producing more oil in the U.S.?

This example calculates the cost of crude imports by multiplying the volume of net imports by the average spot price of West Texas Intermediate (WTI) crude. As readers will recall, oil was extremely expensive in 2008. The year 2008 marked the beginning of the Great Recession. WTI crude averaged nearly $100/barrel that year. As the U.S. (and other countries) fell into recession, demand for oil fell, and the average spot price for WTI dropped to around $62/b in 2009. Demand began to recover, and prices recovered in tandem. But they never have achieved the peak prices seen in 2008. Prices have been cut in half in recent years as the global market has been oversupplied, and this has come about partly because of the increase in U.S. light tight oil (LTO) production from shale plays.

• What were the positive and negative externalities?

These are major questions suitable for a major study, not this journal article. Instead, we will use publicly available data to make a first-cut estimate of the “savings” to the U.S. made possible by the comeback in domestic crude production, ignoring externalities, taxation, and foreign vs. domestic participation. Figure 1 presents the primary elements of the U.S. crude oil balance from 2000 to 2018, as reported by the U.S. Energy Information Administration (EIA). U.S. oil production had been declining, and it settled at an average of 5013 thousand barrels per day (kbpd) in the year 2008. Over the next ten years, however, the Shale Boom made it possible to more than double production to 10,990 kbpd in 2018. Net imports (crude imports minus crude exports) dropped from 9781 kbpd in 2008 to 5753 kbpd in 2018. Demand continued to grow over the past decade (after a downturn caused by the Great Recession of 2008 – 2009), and refiner and blender input of crude oil rose from 14,688 kbpd in 2008 to 16,968 kbpd in 2018.

Table 1:

Simplified Calculation of Cost Savings on Displaced Crude Oil Imports. Hypothetical net imports at 2008 constant production, ’000 bpd

Actual net imports, ’000 bpd

Average WTI crude spot price, $/b

Approx. cost of hypothetical net imports, mm $/day

Approx. cost of actual net imports, mm $/day

“Savings,” mm $/day

Figure 1:

2008

9,781

$99.67

$975

$–

U.S. Crude Oil Balance, 2000 – 2018, ‘000 bpd.

2009

9,323

8,969

$61.95

$578

$556

$22

2010

9,710

9,172

$79.48

$772

$729

$43

2011

9,793

8,888

$94.88

$929

$843

$86

2012

10,026

8,482

$94.05

$943

$798

$145

2013

10,299

7,596

$97.98

$1,009

$744

$265

2014

10,835

6,993

$93.17

$1,009

$652

$58

2015

11,174

6,898

$48.66

$544

$336

$208

2016

11,218

7,279

$43.29

$486

$315

$171

2017

11,576

6,811

$50.80

$588

$346

$242

2018

11,955

5,753

$65.23

$780

$375

$405

Source: Energy Information Administration (EIA)

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FUELS & SUPPLY

Reversal of Misfortune: Oil in the U.S.

Figure 2 compares the daily cost of imports under the Hypothetical Steady-state scenario versus the actual imports as reported by the EIA. In 2008, we assume that the results are the same. By 2009, the approximate cost of crude imports under the Hypothetical case was $22 million/day higher than the cost of imports at the actual level. In the 2009 steady-state case, imports were assumed to be 9323 kbpd, whereas the actual net imports fell to 8969 kbpd because of expanding domestic production. Under the Hypothetical case, net imports were forecast to continue to rise, reaching 11,955 kbpd in 2018. In contrast, the actual net imports in 2018 were 5753 kbpdâ&#x20AC;&#x201D;less than half of what they might have been. Using the 2018 average spot price of $65.23/b for WTI crude, the savings for having such a sharp reduction in import requirements amounted to $405 million per day. Note that the savings in import costs in this exercise dropped from $358 million per day in 2014 to $208 million/day in 2015 and to $171 million per day in 2016. At this time, Saudi Arabia abandoned its policy of trying to support global oil prices by taking its own exports off the market. Saudi Arabia began to ramp up production to regain market share, and prices collapsed.

In 2016, the WTI spot price dropped to only $43.29/b. U.S. production fell, as many higher-cost producers went out of business, and the call on imports rebounded. This was the goal of the oil price war. However, the producers who survived were typically more efficient and competitive, and U.S. production recovered and began to rise again. Low prices also hurt Saudi Arabia and other crude producers. Ultimately, Saudi Arabia returned to its role as price moderator and orchestrated the OPEC+ production cut agreement that strengthened prices. Figure 2:

Approximate Cost of U.S. Net Crude Imports, Hypothetical Steady-State Vs. Actual, mm$/day

Source: Energy Information Administration (EIA)

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FUELS & SUPPLY

Reversal of Misfortune: Oil in the U.S.

The most rapid rates of growth have occurred in North Dakota, where output grew at over 22% per year over the decade 2008 – 2018. Production has grown nearly eight-fold in just ten years.

“ ” Seven Shale States and Employment The Sevens: Seven Sisters, Seven Shales and Seven Shale States

In 2015 – 2016, the author launched a series called “Seven Shales,” a play-on-words contrasting the seven main U.S. shale basins with the “Seven Sisters,” which were the seven large multinational oil companies that used to dominate the global industry. In this section, we extend “The Sevens” theme by looking at seven shale states: Colorado, Montana, New Mexico, North Dakota, Oklahoma, Texas and Wyoming, all of whom, to varying degrees, have been affected by the Shale Boom.

The impact of the Shale Boom has been amplified in some states because of their relatively small populations. Figure 4 presents oil production per capita in the Seven Shale States, plus Alaska and the U.S. average. Per-capita oil production in all seven states exceeds the U.S. average of 0.034 bpd in 2018. U.S. Census data lists Wyoming as the least-populous state in the union, with a population of 577,737 in 2018. Wyoming’s per-capita oil production in 2018 was 0.413 bpd. Alaska’s per-capita oil production was 0.649 bpd, exceeded only by North Dakota in our sample of seven shale states. Alaska is one of the most sparsely populated states, and it remains one of the largest oil producers. Figure 4:

Oil production per capita, 2018, bpd

Crude Production and Per-Capita Production in Seven Shale States Figure 3 shows the growth in oil production in the Seven Shale States from 2008 through the January – April period of 2019. During the decade 2008 – 2018, oil production in these states expanded at a robust rate of 14.8% per year. The volume of output jumped from 1.94 mmbpd in 2008 to 7.68 mmbpd in 2018, and it has averaged 8.5 mmbpd so far in 2019. This is equivalent to 71% of the U.S. total of 11.9 mmbpd. For purposes of comparison, Saudi Arabia currently is producing 9.8 mmbpd. The most rapid rates of growth have occurred in North Dakota, where output grew at over 22% per year over the decade 2008 – 2018. Production has grown nearly eight-fold in just ten years.

EIA for crude production, U.S. Census for population * Alaska is included for comparison

Seven Shale States Unemployment Rates: Steadily below the U.S. Average

Figure 3:

Crude Production Growth in Seven Key Shale Play States, ‘000 bpd

The Shale Boom had a dramatic impact on employment in the U.S., as shown in Figure 5. During the 2000 – 2005 period, the Bureau of Labor Statistics (BLS) reported approximately 120,000 – 125,000 employees in the oil and gas extraction industrial segment. This began to ramp up, exceeding 160,000 in 2008 before the Great Recession caused a downturn. The industry recovered, and employment rose strongly through 2014 – 2015, hitting a peak of 200,800 jobs in late 2014. Thereafter, employment in this sector began to fall. At this time, Saudi Arabia launched its oil price war to drive higher-cost producers out of the market and regain market share. WTI crude spot prices averaged nearly $100/b in 2008. They dropped below $50/b in 2015 – 2016. The U.S. active oil and gas rig count dropped from highs of 1800 – 2000 in the years 2012 – 2014 to just 400 – 500 by 2016. Production did not collapse entirely, however, since many wells were already producing, and the most efficient ones remained.

Source: Energy Information Administration (EIA)

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FUELS & SUPPLY

“ ”

Reversal of Misfortune: Oil in the U.S. The next series of charts compares the unemployment rate in the Seven Shale States with the average U.S. unemployment rate in 2000, 2005, 2010, 2015 and 2018. These years bracket the Shale Boom years: the year 2000 was before the major advances were made in hydraulic fracturing. The year 2005 was before oil production began to surge. By 2010 – 2015, oil production was climbing dramatically. The Saudi-led oil price war set the industry back in 2016 – 2017, but U.S. production continued to rise thereafter.

The timing of the Shale Boom coincided with the Great Recession of 2008, amplifying the importance of the jobs created in the oil and gas sector.

Without attempting to prove any type of statistical causality, the data on shale state unemployment rates compare with the U.S. average unemployment rate in a neatly logical fashion. In 2000, the U.S. unemployment rate was 4%, indicated by the straight line on the chart in Figure 6. Three of the seven shale states examined here (Colorado, North Dakota and Oklahoma), achieved unemployment rates below the U.S. average, while Wyoming was on par with the rest of the U.S. at 4% unemployment. Figure 6:

Shale States Unemployment 2000 Vs. U.S. Average, %

Figure 5:

Employees in Oil and Gas Extraction, Seasonally Adjusted, Thousands, January 2000 – April 2019

Source: Bureau of Labor Statistics

In 2005, the U.S unemployment rate was 5.08%. Five of the seven shale states (Colorado, Montana, North Dakota, Oklahoma and Wyoming) achieved unemployment rates below the U.S. average. Figure 7 presents this data. Figure 7:

Shale States Unemployment 2005 Vs. U.S. Average, %

Source: Bureau of Labor Statistics

The timing of the Shale Boom coincided with the Great Recession of 2008, amplifying the importance of the jobs created in the oil and gas sector. There are few things that resonate more than getting, or keeping, a job when unemployment rates are high. The seven states examined here had a strong oil industry presence, and more often than not, their unemployment rates were lower than the U.S. average. FMN Magazine

Source: Bureau of Labor Statistics

FuelsMarketNews.com

FUELS & SUPPLY

“ ”

Reversal of Misfortune: Oil in the U.S.

Finally, by 2018, the U.S. was in a prolonged period of economic expansion, and unemployment rates had fallen dramatically to 3.9%. Five of the seven shale states (Colorado, Montana, North Dakota, Oklahoma and Texas) managed nonetheless to achieve rates below the U.S. average.

In 2010, the Shale Boom was in full swing. The U.S. economy still was reeling from the Great Recession, and the unemployment rate averaged 9.61% that year. All seven of the shale states achieved lower rates of unemployment—North Dakota by a huge margin. In North Dakota, unemployment averaged only 3.8%. Figure 8 plots the data from 2010.

Figure 8:

Shale States Unemployment 2010 Vs. U.S. Average, %

Source: Bureau of Labor Statistics

In 2015, as noted, crude oil prices were suppressed by the Saudiled price war, and the U.S. active oil and gas rig count was falling. Nonetheless, six of the seven shale states (all of them except for New Mexico), achieved unemployment rates below the U.S. average of 5.27% that year. Figure 9 presents the comparison. Once again, North Dakota had an astonishingly low rate—a mere 2.7%.

Figure 9:

Figure 10:

Shale States Unemployment 2015 Vs. U.S. Average, %

Shale States Unemployment 2018 Vs. U.S. Average, %

Source: Bureau of Labor Statistics

FMN Magazine

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FUELS & SUPPLY

Reversal of Misfortune: Oil in the U.S.

During the shale boom years, the majority of the seven states examined in this article had lower rates of unemployment than the national average.

Conclusion: A Reversal of (Mis)fortune, Part 3 It is generally accepted that the Shale Boom has created wealth for the U.S., particularly to the states with hydrofracking operations and those with refineries who benefit from lowercost crude oil. It is difficult to pin down the precise economics, however, because the oil industry is so complex and far-reaching. Measuring the externalities, positive and negative, requires a major commitment of time, money and expertise. Moreover, such an effort is data-intensive, and the data required may be incomplete, expensive, and/or confidential and proprietary. In this article, we created a simplified method to calculate the money “saved” on the hypothetical volumes of crude that could have been imported on an annual basis from 2009 through 2018 if the Shale Boom had not caused a resurgence in U.S. crude production. The cost savings ranged from $22 million/day in 2009, rose to $358 million/day in 2014, dropped to $171 million/day in 2016 in response to the Saudi-led oil price war, and climbed to a new peak of $405 million/day in 2018.

Perhaps one of the most visible impacts was on employment. Direct employment in the oil and gas extraction sector rose from around 120,000 in 2003 to over 197,000 in 2014. Jobs in this sector remained a bright spot in a gloomy period during the Great Recession. U.S. unemployment hit a peak of 10% in October 2009, and the rate averaged 9.6% in 2010. As shown in Figure 8, however, all the Seven Shale States achieved better employment rates than the national average. During the shale boom years, the majority of the seven states examined in this article had lower rates of unemployment than the national average. While this does not prove causality, the correlation matches the observable facts and helps to tell the story of the day, namely, that the Shale Boom created enormous wealth in the U.S. The issue of costs and benefits, and how they are being distributed, is a contentious matter. Yet as always, we may continue with our theme that the resurgence of U.S. oil is a massive reversal of (mis)fortune. Interpreting it as good fortune or bad is beyond our scope and perhaps is a story for another day. n

Dr. Nancy Yamaguchi Nancy is an author and petroleum industry expert specializing in the advanced analysis of energy markets.Dr. Yamaguchi is the President of Trans-Energy Research Associates, Inc. focusing on a wide spectrum of fuel related issues such as economics and the environment. She possesses a strong interest in global oil industry, including supply, demand, trading trends, as well as transport, reﬁning, product blending, alternative and reformulated fuels, product quality and price behavior. Dr. Yamaguchi can be reached at nyamaguchi@trans-energy.com

As noted, this type of calculation does not attempt to capture externalities and knock-on effects, but it is impossible to view these numbers and fail to conclude that the Shale Boom has been an economic boon for many. It also is logical to assume that some of the wealth has trickled down through various economic sectors. FMN Magazine

“ ”

FuelsMarketNews.com

Gasoline prices are a very emotional issue for consumers, especially when there is high volatility or extended periods of higher prices. The natural impulse can be to blame the retailer. This is understandable as they are the source of contact with the consumer, and the complex petroleum infrastructure tends to be opaque. In fact, any ire should be directed elsewhere. From the EIA, here’s where the cost comes from: Crude oil—56% Federal and state taxes—17% Distribution and marketing—13% Reﬁning costs and proﬁts—13%

Bottom Line: With state and local fuel tax increases on the rise and policies being pushed that could drive crude prices higher, it’s important for the industry to make these basic facts clear to the fuel-buying (and voting) public.

at FuelsMarketNews.com

by Randy Robinson

Ensuring Retailers Receive the Correct Fuel Type and Amount Every Time

FMN Magazine

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RETAIL OPERATIONS

“

It’s much easier to determine that the delivery of five cases of tortilla chips is incorrect when the purchase order says four than to know if the right fuel found its way into the USTs.

”

The operators of retail-fueling

sites—especially those outfitted with a convenience store—have a whole host of concerns on a daily basis. Are all of the fuel pumps operating properly? Does that unreliable cooler need to be repaired? How are inventory levels looking? Did that kid who looks 18 years old get carded when he bought that 12-pack? Is the night-shift cashier going to be on time?

With all that—and much more—rattling around the mind, the last thing a site operator needs to fret about is whether, during a fuel delivery, the correct fuel was delivered into the correct underground storage tank (UST) or whether the total amount of fuel ordered was actually delivered. Delivery mistakes are costly, but they are also more difficult to immediately detect due to the product being stored underground and not visible. It’s much easier to determine that the delivery of five cases of tortilla chips is incorrect when the purchase order says four than to know if the right fuel found its way into the USTs. So, what can fuel retailers do to ensure that their newly-delivered fuel ends up where it’s supposed to or that the correct amount has been delivered?

To Err Is Human Make no mistake, ensuring that the correct type and amount of fuel is delivered each and every time is the responsibility of the fuel supplier. Still, studies show that an incorrect octane mix will occur once out of every 14,000 gasoline deliveries. Also, one out of every 45,500 deliveries will see gasoline mistakenly dropped into a diesel UST or vice versa. The explanation for this is simple: tank-truck drivers are human, and humans can fall prey to making mistakes. In fact, that’s the No. 1 reason for an incorrect fuel drop: a distracted driver connects the delivery hose to the wrong underground storage tank. Another cause is improper or unclear fuel-identification markings of the USTs at the delivery site.

“

To avoid fuel mis-drops, many delivery fleets have instituted a diesel-first policy for their drivers, meaning that the driver will always unload diesel first in the hopes that many mistakes can be avoided.

”

To avoid fuel mis-drops, many delivery

fleets have instituted a diesel-first policy for their drivers, meaning that the driver will always unload diesel first in the hopes that many mistakes can be avoided.

Beyond mis-drops, a second major concern is a disputed delivery amount. This occurrence is around three times more likely to happen than an octane mixup, with one in every 4,000 deliveries questioned. With the average trailer making 3,650 deliveries a year, this is just slightly less than one disputed delivery per year per trailer.

There are four main causes of a disputed delivery amount:

The effects of an incorrect fuel drop can be far-reaching. The most obvious is that the station may need to be shut down for several hours as the tanks are emptied of the contaminated fuel and cleaned, all before a batch of new fuel must be trucked in and unloaded. Secondly, any vehicles that are filled with either improper or contaminated fuel can become damaged, and the driver could come back to the retailer for reparations, or at the very least, choose to do business elsewhere. Finally, any cleanup operation or vehicle damage can generate bad press that can scar the retailer’s reputation and result in lost customers and business. FMN Magazine

FuelsMarketNews.com

n The trailer may have lost air pressure as it was being unloaded, which causes a valve to close before the fuel compartment is completely empty n The driver forgets to unload a compartment, or never opens it n The trailer is parked on an unlevel surface while being unloaded, which can prevent the full product load from completely draining into the UST n The driver closes the fuel compartment too early To help indicate whether the fuel compartment has drained completely, drivers will perform a bucket test after offloading. In this exercise, a bucket is placed under the

RETAIL OPERATIONS

Ensuring Retailers Receive the Correct Fuel Type and Amount Every Time

“

The most detrimental outcome of a disputed fuel delivery is the damage that can be caused to the relationship between the fuel-delivery company and the retailer.

” Conclusion

trailer’s piping outlet while the compartment is opened to see if any residual fuel drains out. However, this is not a reliable check for an empty compartment because empty piping does not necessarily mean an entirely empty fuel compartment. The most detrimental outcome of a disputed fuel delivery is the damage that can be caused to the relationship between the fuel-delivery company and the retailer. If this error occurs too often, it can lead to relationship-related damage that is not easily undone and can ultimately result in the fuel retailer looking for a new fuel supplier.

Make No Mistake

If an incorrect truck-to-UST connection is attempted, the trailer’s valves will not open and the delivery will be unable to commence. At the conclusion of the delivery process, which only ceases when the compartment is empty, the touchscreen notifies the driver that the compartment is empty and that all hoses, elbows and adaptors can be safely disconnected. 30

both the fuel supplier and the fuel retailer. Help has arrived, though, in the creation of a new fuel-delivery monitoring system that virtually ensures all types of fuel mis-drop incidents will be relegated to the dustbin of history. n READ MORE

Thankfully, incidents of fuel mis-drops or incorrect delivery amounts may soon be a thing of the past. This is thanks to new, highly-engineered—but easy-to-use—tankmonitoring technology that uses an easy-to-read graphic touchscreen display that communicates wirelessly with the trailer’s fuel-delivery and operation-monitoring components. Through the touchscreen display, the system consolidates the driver’s access to the many different control systems on a fuel trailer—including overfill detection, pneumatic (air pressure) control, product-crossover prevention, electronic product grade indicators (PGIs), system troubleshooting and usage history.

FMN Magazine

Tank-truck drivers are the undisputed lifeblood of the fuel-delivery industry, combining to perform millions of fuel drops in any given year. The vast majority of the drivers are fully committed to performing their job without fail, but even the best, most conscientious of them can fall victim to a delivery mistake such as unloading the wrong fuel into the wrong UST or dropping an incorrect amount of fuel. When incidents like these occur—rare though they may be—there can be far-reaching negative effects for

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Randy Robinson Randy is Engineering Manager for Civacon, Hamilton, Ohio. He can be reached at (800) 560-6601, or Randy.Robinson@opwglobal.com. Civacon manufactures products and systems to safely load and unload petroleum, dry bulk and petrochemical cargo tanks. Civacon is part of OPW, a leading equipment manufacturer in the retail fueling, ﬂuid-handling and car wash industries and is part of Dover Corporation. To learn more about how Civacon is delivering what’s next in the cargo tank industry, visit civacon.com.

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The Data Pipe to the Site We focus on quality of service because you can run even highspeed networks into congestion. It won’t be for long, but you still run the risk.

“” by Keith Reid

FMN spoke with Dan Rasmussen, Hughes’ Senior Vice President of North America Sales and Marketing about general connectivity issues and data security issues for convenience retailers, and the Verifone and Gilbarco developments.

Hughes Network Systems, LLC developed its reputation in the convenience retail industry as a leader in broadband satellite technology. Before the wide availability of reliable terrestrial high-bandwidth internet connectivity, VSAT (very small aperture terminal) was the only game in town for those that needed such capabilities. And it can still serve that purpose in remote areas lacking other forms of broadband access.

FMN: How universal is broadband connectivity today?

However, Hughes has adapted along with the industry as retailers embraced alternatives like DSL and cable. The company’s HughesON™ managed network services provide complete connectivity solutions. Payment card industry (PCI) requirements have further resulted in Verifone and Gilbarco needing to address security issues relative to point of sale (POS) help desk connectivity. Both have chosen similar routes that involve third-party service providers, with Hughes being certified as an alternative solution for both platforms.

Rasmussen: Inside of any of Dan Rasmussen

FMN Magazine

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the large networks that we’ve deployed, we’ve found anywhere from a minimum 20% to sometimes as high as 40% can’t get above 10 megabits per second. It’s just not physically available in certain geographic locations.

RETAIL OPERATIONS

FMN: How much bandwidth do today’s retail sites require?

Rasmussen: : Just supporting credit transactions is no longer satisfactory. One of the interesting trends that we’re seeing now is sites wanting 50 megs (megabits) down and 5 megs up, which is a substantial amount of input bandwidth. I think it’s driven by the fact that while pumping gas on the forecourt is still important, the successful operators are focused on getting people inside and building and developing relationships, marketing and merchandising, and your network must be able to facilitate that complete customer focus.

FMN: Do they really need that much bandwidth?

Rasmussen: It gets interesting. An operator might look at the expected usage and say I’m going to process credit and pull-down video occasionally, but it’s stored and not streaming. Guest WIFI might eat up 30 or 40 megs of it. Surely, that is enough.

Just supporting credit transactions is no longer satisfactory. One of the interesting trends that we’re seeing now is sites wanting 50 megs (megabits) down and 5 megs up, which is a substantial amount of input bandwidth.

“”

But what people don’t recognize is there might be 20 or 35 computing devices at the site, and they occasionally do things like pull patch updates. So, suddenly you get three Windows devices trying to suck down a 500-meg file while you’re trying to process payment. You can find yourself throttling a network and delaying payment processing. We focus on quality of service because you can run even high-speed networks into congestion. It won’t be for long, but you still run the risk. To address that we focus very hard on quality of service configurations for their sites. What we say is, let’s assume for the sake of argument that you will always deal with congestion. Instead of overpaying and putting in 200 meg circuits, put in quality of service. Whether you’re congested for two seconds or two minutes, the payment processing and interactive applications are handled.

FMN: How significant is data theft today?

Rasmussen: It’s significant, but I think it has gotten downplayed recently for several reasons. The brands aren’t as focused on it, and then we have this bifurcation where the small locations,

which are the majority, aren’t aware of it. There’s not been a real major breach recently outside of your typical card skimmers and other physical security issues. That said, as EMV has made it into the larger retail population and attacking big box retail is becoming much more difficult, retail petroleum is one of the leastguarded frontiers until EMV becomes fully deployed in this industry. And the bad guys are going to chase the easiest path to money. They really don’t want to be skimming data from one gas station. They want to use that as a point of entry to where data is consolidated.

FMN: How do the data security needs vary with the different scale of operators?

Rasmussen: The simpler locations are relying on connectivity for basic retail petroleum operations: tank level monitoring, credit card payment processing and maybe a little bit of back office for labor management. What we see happening from a security perspective is a little bit of basic avoidance. They are very cost conscious. Even if they are broadband-enabled, they’re not using the network much beyond the old capabilities of the dial up network. So, whether it’s Hughes or another vendor, the marketer brings in the broadband and we put the security on top and they may only be paying $60 to $120 for connectivity and security. They’re saying I don’t think I’m going to be breached and I’m just not going to worry much about it.

FMN Magazine

FuelsMarketNews.com

RETAIL OPERATIONS

The Data Pipe to the Site

FMN: What about the larger players?

Rasmussen: In the last 18 months I have seen them moving aggressively to full, robust security models. These would often be the “mid majors”—the Circle K’s and such—that would have hundreds to thousands of sites. A lot of them have a long-term perspective. The larger people want a managed switch infrastructure. They want ports enabled or disabled. They want the logging and more proactive identification. For example, a station had 15 devices attached yesterday and today, device 16 showed up and it appears to be a Windows machine and a notification is sent. These guys are now paying maybe $275 to $350 a month for a much higher class of service. They’re wanting proactivity and security in a full managed service environment much closer to what some of the bigger box retailers have been doing. They are much more aware of the security ramifications of a breach.

The argument we’ve had with the brands is if “Dan’s Petroleum” gets breached, it’s not that exciting. But if the company is flying the BP flag, for example, the public associates the breach with the brand.

“ ”

security, WIFI, VOIP, etc. For both VeriFone and Gilbarco, it really just applies to providing connectivity for the POS help desk support.

FMN: What is driving these developments?

FMN: How does this impact

Rasmussen: The first development

branded retailers, who may be smaller operators but part of a larger network?

that kicked things off was VeriFone’s decision to vacate its EZR router. A retail petroleum site, say one branded BP, would buy a VeriFone POS system. When the VeriFone POS system arrives, it has its computing devices and it used to come with the EZR router.

Rasmussen: The argument we’ve had with the brands is if “Dan’s Petroleum” gets breached, it’s not that exciting. But if the company is flying the BP flag, for example, the public associates the breach with the brand. The brands went through a phase with PCI where, from a legality perspective, they might have felt that if they completely shoved responsibility down to the marketer, they would have no responsibility—which from a strict interpretation of the rules is probably accurate. However, in recent times the (public) marketing side of some of the brands have awakened and decided why don’t we help those guys to be in the best possible position so that we’re not facing backlash from this at all.

FMN: Hughes is listed as a certified VeriFone managed network services provider, and you play a similar role as an alternative with Gilbarco. First, what is an MSP?

Rasmussen: MSP is the acronym for managed service provider. In industry terms it’s much broader—transport,

If the location had a problem, that EZR was maintaining a tunnel from the site back to the VeriFone help desk so they could troubleshoot the POS system. The sole function of that device was to provide connectivity for help desk support. However, that means you have a tunnel that is always established, which presented a bit of a security risk. If you had Hughes, for example, as a managed network provider with a router supporting the wide area network, we would be able to security-scan any of the devices connected to us, but the EZR router would prevent any scans going down into the POS systems and such. From a security perspective that means you could not technically finish your PCI compliance, and each of the marketers had to scan behind the EZR on their own. The technical wherewithal for that could be lacking. This created a bit of a battle between the brands and VeriFone about how to do this. FMN Magazine

FuelsMarketNews.com

Not to mention, from the brand perspective, the solution had an extra router that people were paying for. VeriFone’s response was to stop using the EZR and rely on the managed network provider’s routers. What happens now is if you need help desk support, VeriFone reaches out through a tunnel to Hughes, and then from Hughes through a tunnel down to the site. And you can now finish your PCI compliance scans. On the plus side, once you have that as the foundation, the MSPs can then offer additional higher-level security if your business warrants it and you’re interested.

FMN: This seems to be PCI driven, but we also have EMV coming into play. Do they relate? The HughesON solutions are also EMV-compatible.

Rasmussen: They are parallel and tangential. There is the need for the EMV infrastructure to be in place and the understanding that the cost is very high. Not only do the dispensers have to go in place, but now you’re dealing with effectively a bunch of IP-connected devices that need to go through a switching infrastructure and get tied into the POS.

FMN: Are retailers addressing this in a unified manner?

Rasmussen: That ideally would be handled at the same time the MSP switchover is taking place, but I think a large number are doing it as two separate projects. From a Hughes perspective as well as the other MSPs. We’re saying, look, if you’re already going to pay for a site visit, let’s go ahead and put the switch infrastructure in place now so that when these pumps show up, you are ready and you can write down the infrastructure for it. I see this approach being valued in the mid majors and above, but smaller operators aren’t there yet because they just see it as an additional cost to be handled later. At the end of the day, none of this helps them sell on extra gallon of gas or an extra Twinkie, and for a small businessperson, that money’s coming out of their bank account. n

FMN FUELS MARKET WATCH

FuelsMarketNews.com

DISCERNING

THE E15 KERNELS OF TRUTH

RETAIL OPERATIONS

by Joe O’Brien

“”

A recent report from the U.S. Government Accountability Ofﬁce found that the RFS has “likely had a limited effect, if any, on greenhouse gas emissions.”

FAQ BIOFUELS

What is the difference between conventional biofuels and advanced biofuels? Conventional biofuels such as cornstarch ethanol, which are known as ﬁrst-generation biofuels, are made from the sugars and vegetable oils found in traditional food crops. Advanced biofuels, known as second-generation biofuels, can be manufactured from animal waste and nonfood plant materials. These materials consist of the residual non-food parts of food crops (such as stems, leaves and husks that are left behind once the food crop has been harvested) and other crops that are not used for food purposes and by products that result from industry waste.

The U.S. Environmental Agency’s EPA’s approval of E15 is about more than offering motorists a higher-octane lower-priced gasoline. Much more. The approval of E15 illustrates a fundamental ﬂaw in U.S. policy-making that prevents federally guided initiatives from achieving long-term goals. Sure, fuel site operators need to stay abreast of the latest station management tools, products and regulations. But it is equally important they fully understand that this ﬂawed approach to policy-making exists and how it will continue to hinder true advancement in agriculture, environmental protection and retail fuel. Without question, E15 is the single most important issue in retail fuel right now. The consequences of its approval will impact the U.S. fueling mix for at least the next two decades, while the consequences of misguided efforts by our leaders may linger much longer. To bring the bigger picture into focus, let’s break the situation down by untangling the issues one by one.

Q: A:

Let’s remind ourselves: what is the purpose of the Renewable Fuel Standard (RFS)?

According to the EPA’s RFS webpage, “Congress created the RFS program to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector while reducing reliance on imported oil.”

Q: A:

Has the RFS achieved its goals?

Dependence on foreign oil has been reduced and thenation’s renewable fuels sector has expanded, but not to a degree that it is having a positive impact on the environment. A recent report from the U.S. Government Accountability Office (GAO) found that the RFS has “likely had a limited effect, if any, on greenhouse gas emissions.” The RFS has, to date, primarily required the blending of a conventional biofuel—corn-starch ethanol—that isn’t particularly effective at reducing greenhouse gas emissions. Advanced biofuels achieve greater greenhouse gas reductions than corn-starch ethanol, but progress in the production of advanced fuels has been significantly stymied by technical challenges and changing economics that have led to high production costs.

FMN Magazine

FuelsMarketNews.com

RETAIL OPERATIONS

Discerning the E15 Kernels of Truth

“”

The RFS has contributed to an outcome that is not expressly included in the scope of the renewable fuels program: it has created a market for American-grown corn. The science of corn production has enabled corn farmers to increase their yield, and they rely on ethanol as a market for their crops. Growth Energy reports that the U.S. ethanol industry purchased over $23 billion worth of corn in 2018 alone.

Q: A:

What changes should be considered for future renewable fuels programs?

The reason the RFS has failed is because the administrative leadership that directed its development reverse-engineered a rationale to support the politically-expedient result they desired, with little regard for outcomes influenced by scientific or economic factors. To achieve results, policymakers need to take one of two approaches: • Set a goal for the nation in which all the economic players have a stake. This requires rewards for reaching a target and penalties for not hitting the target. • Allow the market to decide, and encourage investments in new technology through tax policy.

How could E15, and consequently the retail fuel industry, be impacted by a ﬂawed approach to policymaking?

Although E15 is being ushered in through a different group of leaders than those who established the RFS, the E15 policy could suffer a similar fate because the same flawed approach to policy-making is being applied. And retail fuel will likely be caught in the middle.

Not only has the supply network not been tested by a nationwide demand for E15, the requirements for the maintenance of infrastructure storing and distributing E15 for the next 20some years is not 100% clear. A recent bulletin from the Petroleum Marketers Association of America cautions that although most underground storage tanks (USTs) currently installed are shown to be compatible with E15, many UST components may not be compatible. That distinction will require ongoing efforts to evaluate and maintain materials, such as polymers and elastomers, that may be vulnerable to damage in gasoline blends higher than 10% ethanol. Another important consideration: the RFS program in its current form will establish volume requirements only through 2022. The EPA itself reports that advanced biofuels provide 30% more reduction in greenhouse gases compared to conventional renewable fuels such as ethanol. With this in mind, what the future holds for the RFS—and ethanol as a way to reduce greenhouse gases—beyond the 2022 volume requirements is extremely uncertain. If the RFS is extended, and if reducing greenhouse gases remains an authentic driver of the program, and if the status quo continues to linger, conventional renewable fuels such as E15 will not be able to achieve greenhouse gas reduction goals. On the other hand, if the next incarnation of a national renewable fuel program successfully accelerates the production of advanced biofuels, the fuel industry will (again) need to reevaluate its entire supply chain and associated infrastructure—from the terminal to the dispenser nozzle.

Conclusion The RFS crossroads approaches at a time when campaigns from ethanol groups are heralding the revenue E15 will generate for fuel retailers (several industry oil companies and c-store chains are moving forward with plans to sell and promote E15 year-round). Unfortunately, the promotional E15 messages may be overshadowing, and likely obscuring, the longer-term public policy issues at hand. Agriculture is part of the fabric of this country. But the federal administration stepping in to favor ethanol doesn’t encourage innovation in farming. It is unfortunate that U.S. election cycles now seem to mirror the short-term fiscal structure of publicly traded corporations. This renders us incapable of truly committing to—and achieving—any forward-looking plans that serve to “promote the general welfare,” something the Preamble to the Constitution instructs our leaders to do. n

READ MORE at FuelsMarketNews.com

Consider this: With its attractive price-point, E15 has indeed grown sales for marketers who have added the fuel to its product mix. That notwithstanding, the public isn’t exactly clamoring for it. The largest expansions of E15 are currently clustered in the Midwest, the MidAtlantic and Florida. The proximity of terminals supplying E15 to these clusters is proportionate. FMN Magazine

Joe O’Brien Joe is Vice President of Marketing at Source™ North America Corporation. He has more than 20 years of experience in the petroleum equipment fuel industry. Contact him at jobrien@sourcena.com or visit sourcena.com to learn more.

FuelsMarketNews.com

14 Tips to Help Select

the Perfect Car Wash Site by David Dougherty

FMN Magazine

FuelsMarketNews.com

RETAIL OPERATIONS

“

It should be obvious: where the vehicles are is where the car wash should be.

”

Finding the perfect plot of

land on which to place a car wash can resemble a scene from “Goldilocks and the Three Bears.” This one’s too small. This one’s too remote. This one’s juuuuust right! However, finding that “just right” location can be very difficult, and failing to do so can spell the difference between success and failure for a car wash operator. With the size of the investment required for land acquisition, permitting, construction, equipment, staffing and operational costs, it behooves car wash operators to leave no stone unturned when performing their due diligence during the site-search phase. To lend a hand, we offer this comprehensive checklist: The Top 14 Things to Consider When Selecting A Car Wash Location.

1 Area Profile It should be obvious: where the vehicles are is where the car wash should be. But aside from population demographics, there are areas that are more likely to produce the vehicle traffic that is the lifeblood of the car wash operation. In descending order, the most desirable areas are retail/shopping corridors, business centers, residential areas and industrial parks. Major retail areas are the preferred spots because of the traffic they create, especially from drivers who are categorized as “soccer moms” or “service seekers;” these folks make up the largest percentage of wash customers.

2 Market Profile In general, people are naturally attracted to things that are shiny and new. In the retail marketplace, people will flock to new and developing areas to see what the buzz is about. That makes those areas ideal for a car wash site. After that, the most desirable are growing or stable established areas, while declining areas offer fewer opportunities.

3 Type of Traffic Not all traffic is created equal. As noted earlier, shoppers form the sweet spot amongst car washers. After that, local business and residential traffic can be profitable, while the operator may want to think twice before locating the wash where the majority of traffic comes from commuters.

4 Traffic Speed A driver zooming down the road at 70-plus miles an hour isn’t likely to slam on the brakes and pull into a car wash—even if they are able to read the signage as they fly by. That makes traffic speed an important consideration. In fact, it is not recommended that a wash be located along a strip of road where the speed limit is higher than 50 mph. The best areas are those with a 30-mph speed limit, with the attractiveness decreasing as the posted speed limit increases.

5 Location of Lot There are generally four configurations that must be considered: • Best: Corner lot at light • Good: Inside lot near light • OK: Corner lot with no light • Caution: Inside lot with no light

6 Site Access Ease of entrance and exit to and from the roadway is critical: • Optimal: Easy ingress and access at a corner lot • Good: Easy ingress and access with medium traffic strip • Caution: Difficult ingress and access • Avoid: Difficult access due to divided highway

7 Site Visibility A car wash that cannot be seen by drivers will not be visited. Operators should strive to find a site that offers visibility—from both directions—of at least 500 feet, while any sight lines less than 200 feet should be avoided. Other things to note—and avoid—when considering site visibility are large setbacks, especially when nearby buildings do not have similarly large setbacks, and difficulty viewing the site or signage due to surrounding trees/vegetation or bridges/overpasses. FMN Magazine

FuelsMarketNews.com

RETAIL OPERATIONS

The site must have easy access to water/sewer, electrical and natural gas service.

8 Traffic Counts Traffic-count totals can usually be found on municipal or state Department of Transportation websites. Obviously, areas with higher traffic counts are most desirable, with counts in excess of 10,000 vehicles a day the best option.

9 Hours of Operation A site that stays open 24 hours a day, seven days a week offers the best bang for the buck, but state or municipal laws may restrict the number of “open” hours a site can offer. Short of 24/7 operation, being able to operate for at least 75 hours a week (nearly 11 hours a day) is the best option, with the benefits receding as the allowable hours of operation diminish.

13 Vehicle Stack

Among the types of zoning requirements that must be considered before selecting a site are noise ordinances, lighting ordinances, hours of operation ordinances and utility consumption, especially as it pertains to peak-usage regulations.

Access to Utilities

14 Location of Competition There are two variables to consider when evaluating the competition. The first, and simplest, is the physical distance between the sites. A location where the closest competitor is at least seven miles away is preferable, with the threat of the competition increasing as the distance between the sites decreases. Secondly, the type of wash and services that are being offered by the competition must be considered. Is the competitor’s wash an in-bay automatic or a tunnel? Full service or exterior only? Friction or touch-free? Self-serve or manned? Standalone or attached to a gas station/convenience store? What other services are offered (vacuums, detailing, etc.)?

The site must have easy access to water/sewer, electrical and natural gas service. Water must be available at flow rates up to 30 gallons per minute at pressures of 30 – 50 psi. While there are a lot of variables, the typical site should have an electrical service to accommodate a 200-amp breaker panel at 208 VAC 3PH. The location must also have access to reliable Internet service.

12 Size of Lot Lot size needs can vary greatly depending on the type of car wash. The size and shape requirements differ between a tunnel and in-bay automatic wash. Contacting your local car wash expert—your distributor—will be the best option to help determine if a parcel of land is the correct shape and size to maximize your chances of success.

”

Knowing the average length of a vehicle, is there enough room to accommodate two, three, four or five-plus vehicles per bay? Is there enough room to feed a tunnel wash with multiple lanes? Is the site conducive for a left hand turn? Thinking beyond just the number of cars a site can stack is critical. Orientation, visibility and direction can all play a role in vehicle stacking.

10 Zoning Requirements

“

Select the Perfect Car Wash Site

With so many variables to consider, it becomes difficult to completely satisfy all of them, so a bit of give-and-take will be required during the site-procurement process. By using these 14 considerations as a guideline, car wash operators can make a very reasoned and, hopefully, successful site-selection decision. n

FMN FUELS MARKET WATCH

FuelsMarketNews.com David Dougherty David is the Senior Product Manager for In-Bay Automatics at PDQ Manufacturing, Inc., De Pere, WI, and can be reached at david.dougherty@pdqinc.com. PDQ is part of OPW Vehicle Wash Solutions, a business unit within Hamilton, OH-based OPW. OPW Vehicle Wash Solutions was formed in January 2019 and consists of PDQ Manufacturing, Inc. and Belanger, Inc. Together, they create a revolutionary single source for all vehicle-wash needs. For more information on OPW Vehicle Wash Solutions, please visit opwvws.com. FMN Magazine

FuelsMarketNews.com

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The Loyalty Technology You Should Know About 3 Ways to Leverage It by Brandon Logsdon

Convenience store and fuel retail industry leaders are continuously innovating how to make shopping easier and frictionless. Within the last two years alone, we’ve seen interactive gas pumps and scan-and-go technology that lets consumers accelerate their payment and checkout process. These types of innovations generate a lot of coverage, but there’s other groundbreaking technology within the c-store sector that deserves more attention for the essential way it’s changing retailers’ marketing and loyalty operations. Let’s start with the integration of customer loyalty and marketing solutions, which helps operators increase efficiency, generate ROI faster from effective marketing initiatives and grow their overall business. This approach takes advantage of powerful cloud technology that connects an operator’s point-of-sale

system with customer loyalty and marketing communications to drive both program and business growth at scale. If you’re a retailer and you’ve never considered using cloud technology, you should get familiar with it fast. If you’re among those who are already using cloud solutions for your marketing, there are ways to optimize for better results.

Three Ways to Leverage Cloud Technology for Your Marketing Needs The most fundamental way that a comprehensive customer loyalty and marketing solution can change your operations is through seamless automation. There’s an abundance of software solutions in the market, but a system specifically designed for the unique needs of c-store and fuel

FMN Magazine

FuelsMarketNews.com

RETAIL OPERATIONS retailers should bring together enterprise resource planning (ERP), pricing, loyalty and overall customer marketing features. That’s just for starters. A robust platform should provide you with the following capabilities that will help you reward your existing loyalty program members, attract new customers and members and increase both their store visits and spending.

What if operators could collect and use data more effectively to gain insights into how and why their customers interact with their stores or brand? With better data and customer insights, fuel and convenience retailers can send personalized messaging and communications, with offers and rewards that are likely to drive greater repeat traffic and profitable interactions with customers.

#2 #1 Optimizing Customer Data: The most important component of a customer marketing strategy that drives revenue, maintains margins and encourages repeat customers is data. Fuel and convenience retailers have an abundance of data at their disposal: information about how and when customers purchase fuel, instore sales figures and historical data that indicates fluctuations in cost and demand. Our latest c-store shopper report shows that 72 percent of cstores collect customer information, which is a great start. However, most retailers consider data sets individually and they have difficulty utilizing the data.

Understanding Customers Better: Your loyalty program offers a window into the shopping behaviors and preferences of your best customers. It allows you to track member interactions across all areas of the business: at the pump, in the store, online or interacting with a mobile app. Most importantly, a loyalty program allows you to associate these activities with an individual customer, including what items they typically buy, if they visit the store after they’ve fueled up, and how much they spend. Once you’re able understand them better, you can create personalized communications and meet their shopping preferences and expectations more effectively.

READ MORE at FuelsMarketNews.com

Brandon Logsdon Brandon Logsdon, SVP of Marketing Cloud Solutions for PDI Software, oversees the company’s loyalty division, in addition to its MarketLink and data monetization services. PDI Marketing Cloud Solutions is a complete end-to-end solution that combines the secure and scalable PDI Marketing Cloud Platform with the industry knowledge and ﬁrst-hand experience of the PDI Marketing Solutions Practice. To learn more about Brandon or how PDI Marketing Cloud Solutions can help your convenience retail operation, visit the PDI Marketing Cloud Solutions website. FMN Magazine

Imagine if you can use these insights to help understand customers in general, including nonmembers? You could be holding the key to recruiting more customers and driving more profitable growth.

FuelsMarketNews.com

Connected Data for More Effective Marketing: As previously stated under #1, the most important component of a customer marketing strategy that drives revenue, maintains margins and encourages repeat customers is data. Connecting data from multiple sources, analyzing that data in real time, automating customer marketing campaigns and managing offers and settlement will allow you to spend more time on activities that drive business value and less time on administration and manual marketing processes. There’s no shortage of marketing and loyalty solutions in the market. It’s a question of picking the right solution that works best for your convenience store or fuel retailing operations and the right technology partner that can give you a competitive edge through their industry know-how and effective support. A unified loyalty and marketing platform designed specifically for your industry will help you wear different hats with ease and confidence as a business operator, marketer, problem solver and a driving force for your organization’s long-term success. n

15 Reasons You Should Consider Prefabricated Fueling Systems for Your High-Volume Site Not until 10 or so years ago, that is.

by Ed Kammerer

Not many people would prefer to purchase a smartphone “kit” and construct the device themselves. The same goes for a microwave oven, lawnmower and, heaven forbid, automobile. Most consumers would rather have the “experts” at the factory take care of that for them. Purchasing a prefabricated, “plug-and-play” fueling system for a retail fueling location, however, was traditionally not an option for contractors and site owners.

That’s when the Loop System for underground fueling was created. This innovation signaled a paradigm shift in fueling-site construction. The genius behind it is that all of the components in the underground fuel-delivery and containmentsump systems, along with all ancillary equipment, are prefabricated and pre-assembled at the factory. This design eliminates more than 50% of the in-ﬁeld fabrication and assembly work that used to be required when installing an underground retail-fueling system.

FMN Magazine

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fuelmarketernews.com FuelsMarketNews.com

RETAIL OPERATIONS

“

The overriding beneﬁt of the underground fueling loop system is that the reduced amount of complicated in-the-ﬁeld plumbing work that needs to be done correspondingly reduces the risk that errors will occur during assembly.

” Loving the Loop

The ways that the prefabricated underground fueling loop system can streamline installation at the site are many:

Installation times can take as little as one day, as opposed to three or four

Eliminates the need to try to make a curved pipe go straight

Drastically reduces the number of pipe fittings and associated assembly labor

Prefabricated quick-couple dispenser sumps come from the factory with entry boots, stabilizer bars and impact valves already in place, making them fast and simple to install

Shallow, angled dispenser sumps resist groundwater forces and are quicker and less expensive to hydrostatically test

One part number for the sump and all components means fewer parts to stock and install, which makes it easier to spec out the material list when ordering the system

Eliminates the need to measure, cut, thread and install steel or flexible riser pipes

Eliminates the need for expensive flex connectors, which can be prone to failure that will result in fuel leaks

Built-in test fixtures eliminate the need for the installation of rubber test boots

Prefabricated and installed rigid entry fittings (REF) prevent groundwater intrusion and fuel contamination

UL971-listed coaxial pipes have no exposed joints or fittings, meaning they require no adhesive or welding to be installed

Stainless-steel, double-wall couplings (DPC) eliminate the need to cut back the piping’s secondary jacket to access to the pipe’s interstitial space

Eliminates the need to adjust the height of the dispenser sumps in the field

Prefabricated tank sumps do not need holes cut in them for conduits, which eliminates a notorious leak point

Pre-assembled emergency shut-off valves protect against low-impact fractures in the fuel dispenser’s shear groove, which reduces the risk that undetected dispenser leaks will occur FMN Magazine

35 47

The overriding benefit of the underground fueling loop system is that the reduced amount of complicated in-the-field plumbing work that needs to be done correspondingly reduces the risk that errors will occur during assembly. These errors can later manifest themselves in leaks that may go undetected for a period of time, meaning that the safety of the site and the environment may be compromised. The leaks will also eventually need to be repaired, which is an expensive proposition in and of itself, while also leading to fuel island downtime that will negatively impact the fueling operation’s bottom line. The reduction in installation complexity that the underground fueling loop system offers also serves to enhance the long-term reliability of the system. This allows the fuel-site operator to attain a higher level of overall environmental protection and identify any potential problems that may develop before there is a safety issue.

FuelsMarketNews.com FuelsMarketNews.com

RETAIL OPERATIONS

Prefabricated Fueling Systems for Your High-Volume Site

Hey, What About Us?

u Prefabricated loop sumps to accommodate high-speed dispenser footprints, which allow high-volume ﬂow rates while also accommodating fuel dispensing on both sides of the truck, including a satellite lane

The new standard set by the underground fueling loop system is reflected in the thousands of installations that have been completed in the 10-plus years since its introduction. The original loop system was truly designed to meet the needs of traditional service stations and convenience stores that have a fuel offering. The system’s 1.5- to 2-inch coupling, coaxial pipes, shear valves and entry fittings were the perfect size to deliver the typical 10 gallon-per-minute (GPM) flow rates that are required when fueling automobiles. The retail-fueling landscape, however, is constantly evolving, and since the introduction of the underground fueling loop system, there has been a noticeable uptick in the number of high-volume fueling sites that are being built. Namely, these sites are the large truck stops that can feature 10 to 20 fueling lanes and the “hybrid” convenience stores that have traditional automobile fueling in the forecourt and separate trucks-only fueling lanes elsewhere on the property.

u 3-inch (up from 1.5- and 2-inch) double-sided flexible/rigid entry fittings (RBF) that provide double containment protection that prevents fuel contamination and ground-water intrusion u 3-inch (up from 1.5- and 2-inch) UL971-listed coaxial pipe that is easy to install, requires no adhesive or welding, and eliminates leak points and exposed joints and fittings u 3-inch (up from 1.5- and 2-inch) double-wall, stainless-steel pipe couplings (DPC) that eliminate the need for a rubber test boot and the trimming back of secondary jackets, while allowing for continuous monitoring u 6-inch (up from 4-inch) access pipes that resist crushing and allow easy access and pipe retraction for maintenance, repair, removal and replacement without ever breaking concrete

These sites could not be serviced by the traditional loop system because it could not produce the 30-gpm and higher fuel flow rates that are required to expeditiously fill a long-haul truck’s fuel tanks. In addition, the offset product inlets in high-speed dispensers created a challenge for prefabricated sumps.

Of course, all of these components are prefabricated and pre-assembled at the factory. In fact, this capability may be even more beneficial to the operators of high-volume truck-fueling operations. Most of these types of locations generally use large-diameter fiberglass pipe over long piping runs that require lots of labor-intensive connections and gluing. Additionally, while a typical gasoline station may have 50 connections in its fueling system, a truck stop may require upwards of 300 to 400 connections to be made since there are trunk and satellite fuel lines branching out of every piping run. n

Recognizing the requirements of this growing market segment, the developers of the original underground fueling loop system have created a “high-flow” version. Essentially, the high-flow system takes the components of the original system and “supersizes” them so that they can deliver the flow rates needed by truck stops and hybrid c-store fueling sites:

Shear Magic

Ed Kammerer Ed is the Director of Global Product Management for OPW, based in Cincinnati, Ohio, USA. He can be reached at ed.kammerer@opwglobal.com. OPW is deﬁning what’s next in fueling solutions and innovations worldwide. OPW delivers product excellence and the most comprehensive line of fueling equipment and services to retail and commercial fueling operations around the globe. For more information on OPW, please go to opwglobal.com.

Knowing that any fuel leak, no matter how small, is significant, the developer of the highflow looping underground fuel system has also created a 2-inch version of the emergency shut-off valve that is used to protect against the hazards that can arise from undetected shear-groove leaks that are caused by low-impact incidents at the fuel dispenser. The upsized valve matches the high-flow inlets of the dispenser while allowing the larger diameter 3-inch pipe to connect to the valve. The patent-pending design of this valve prevents fuel from leaking into dispenser sumps, which helps reduce the risk of fire, explosion, personal injury, property damage, environmental contamination, product loss and exorbitant site cleanup costs. In the event of a dislodged or pulled-over dispenser, the valve’s fusible link releases to automatically close the valve, which greatly reduces the fire hazard. The valve features a cast-iron top and body and has been quality and field-tested to ensure that it will operate effectively in a truck stop or hybrid c-store installation. The valve is also listed by both UL and ULC. FMN Magazine

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Where Are You

Losing Fuel?

by Richard Browne

Fuel variance happens across your supply chain. Some of this is loss that needs to be understood for bookkeeping and does not have a financial impact, while other areas of loss are controllable and can contribute to improved financial performance for fuel retailers and jobbers.

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RETAIL OPERATIONS diversions, where a third party takes part of a shipment before it reaches the site; and tank siphoning, where thieves steal fuel from a site’s underground or above ground storage tanks. Other cases include theft at pumps by tampering with pulsars, site staff bypassing the point of sale, or the use of some unauthorized device installation. Each of these forms of variance can be quantified and used to drive corrective actions to reduce or eliminate their financial impact.

Controllable Loss

Other Variances

By measuring and monitoring fuel through the supply chain, from rack to cash, several points of loss can be identified and improved. The most common areas of loss are:

There are several areas of fuel loss that result in reconciliation issues where the actual fuel volume change is due to other factors. By getting greater insights into these areas, it is easier to ensure that your balance sheet is aligned between fuel inventory purchased and gallons sold. These areas of variance include:

1 Meter Over-dispensing Gas dispenser meters generally drift in a positive direction, resulting in more fuel being dispensed than when calibrated. Between calibrations, this positive meter drift can result in significant fuel volume being giving away. As dispensers age, this drift can accelerate. All meters do not drift at the same rate, which combined with the dispenser’s age and gallons pumped, can result in a wide range of meter accuracy across a single site. Having an accurate reading of meter drift can help drive the correct balance between timing of meter calibration and fuel variance .

1 Temperature Impact On Volume When fuel is loaded and measured at the terminal, it is at one temperature. As it travels to your site, the fuel temperature will change based on weather conditions and other factors. When the fuel is dropped at the site, its volume will change again as the fuel adjusts to the in-ground tank temperature. Across this flow, the volume of the fuel may expand and contract resulting in different volume readings at each stage, creating inventory variances.

2 Delivery Variance

There are several potential reasons why the amount of fuel on a bill of lading does not match the amount of fuel delivered. These reasons include delivery shortages, undocumented fuel left on board, theft and inaccurate tank calibration. Having a process that identifies, analyzes and investigates this variance can provide the information and documentation needed to resolve discrepancies with your fuel logistics provider.

There are several potential reasons why the amount of fuel on a bill of lading does not match the amount of fuel delivered.

3 Fuel Theft

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In monitoring the fuel supply chain, we’ve identified several types of theft that result in significant financial impact. These thefts can include intentional short deliveries, where a driver does not drop the full contents of a compartment; fuel

DELIVERY SHORTAGES

THEFT

METER UNDER/OVER-DISPENSING

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FRESH BREWED COFFEE

99p PUSH TO BUY

TANK & LINE LEAKS

TEMPERATURE CHANGES

RETAIL OPERATIONS

Where Are You Losing Fuel?

By identifying and dispatching maintenance to address issues such as slow or low flow rates, retailers can avoid disappointing customers and improve their site’s throughput.

“”

2 Administration or Paperwork Errors Administration or paperwork errors. These mistakes can be due to errors in a bill of lading being filled in inaccurately, resulting in errors in the reporting of actual gallons sold at the pump.

3 Tank and Line Leaks Leaks big or small can have huge financial impact, from remediation costs to fines, especially if undetected for a period of time. A spill during delivery that is not properly documented and reported can also result in an unexplained fuel variance. Risk mitigation and early detection is key in reducing the financial impact of these situations.

Tank Calibration

Over a period of time, tanks are subject to environment changes whereby the shape or angle of the tank can change. Tank calibration versus the height to volume conversion can have an impact on accuracy of the reading and can also mask some real losses. Having an accurate tank chart can help with reducing unexplained variances that result in write offs.

While variance analysis can be tackled in house, many operators prefer using a third-party managed service to identify and manage sources of variance. The advantages of outsourcing fuel variance analysis include access by trained experts whose only job is working to find and fix these variances. When done in house, variance analysis is often performed as “one more thing” by an overworked associate in accounting or fuel ops. Using an outsourced service leverages advanced algorithms, artificial intelligence and other technology that may not be accessible or affordable for operators to build on their own. In an increasingly competitive fuel wholesale and retail market, capturing and addressing every source of inventory loss and understanding areas of variance can provide immediate benefits in both improved profits and customer satisfaction. Can you afford not to understand and address variance on your sites? n

READ MORE at FuelsMarketNews.com

5 Equipment Issues If a site has defective equipment, including tank probes or meter drive wheels, inaccurate information could be reported, making error-free reconciliation difficult. In addition to capturing sources of fuel loss and returning this lost fuel to your income statement as enhanced margins, a variance management program can help improve a convenience store’s customer satisfaction and customer experience. By identifying and dispatching maintenance to address issues such as slow or low flow rates, retailers can avoid disappointing customers and improve their site’s throughput. FMN Magazine

Richard Browne Richard Browne, Growth and Business Development Leader at InSite360, a Veeder-Root company. Browne is a fuel and c-store veteran and leading authority in downstream petroleum logistics and operational excellence. As a leading global supplier of fuel management solutions, Insite360 is the analytics business unit of Gilbarco Veeder-Root. The company optimizes commercial and retail supply chain operations with purchasing, logistics and environmental compliance. Contact Richard at rbrowne@insite360suite.com.

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by Roy Strasburger

Why is it so hard to get a good cup of coffee in a c-store? It’s early morning. While the darkness of the previous night is slowly starting to dissipate, the fog inside your head is not. You’ve managed to start your daily journey, but you need something to energize your day. A cup of coffee seems like the right move. You don’t want to pay the exorbitant prices charged by the national artisan coffee shops, so you pull into your local convenience store.

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How hard can it be to have hot fresh coffee available all of the time? If you operate a c-store, you know it can be hard.

RETAIL OPERATIONS

The store is well lit and inviting. The staff are friendly. You walk to the back of the store and approach the coffee counter. At this point, you know that one of three things will happen—and two of them bad. If all goes well, you will pour yourself a fresh cup of joe and all will be right in the world. If things don’t go well, the coffee that pours into your cup will either taste stale, bitter or cold from having been in the pot for too long. Alternatively, there will be no coffee as the pot has been drained. While it is true that you will be lucky, and caffeinated, most of the time, we’ve all gone through the trial of not having our expectations met. How hard can it be to have hot fresh coffee available all of the time? If you operate a c-store, you know it can be hard. Coffee is one of the most perishable products that the average c-store sells. It needs to be replaced between 45 minutes (if held in an open glass carafe) and three hours (if using a sealed air pot or urn). If the product isn’t replaced in time it becomes bitter. The two main types of coffee dispenser (glass carafe and air pot) have positive and negative aspects. As I mentioned earlier, the coffee in a glass carafe has a short shelf life due to it being exposed to the open air. The upsides are that they release a coffee aroma into the air and the employee can see when the pot is empty. With air pots and urns, the coffee stays fresh longer because it is in a sealed container. The main downside is that the employee can’t see how much coffee is left in the pot and it often runs out. This problem is compounded by the fact that most air pots and urns take 15 to 20 minutes to brew and ﬁll. Most of our customers don’t want to wait that long for a fresh cup of coffee. Ironically, it is in the busiest coffee stores that running out of coffee is a major problem. If there is not enough staff on hand during the rush, the employee is so busy manning the cash register and selling coffee that they don’t have time to check to make sure that air pots and urns haven’t run out. Ultimately, we are hamstrung by our own success.

So how do we overcome these issues and provide a consistent quality coffee program? The ﬁrst thing is to size your coffee equipment to the volume of your business. If you sell a lot of coffee, you may want to consider using glass carafes because they are easy to monitor and can be reﬁlled quickly. If your coffee sales are slower, consider using air pots and urns because they will keep the coffee fresh tasting and hot longer.

as to maximize sales and proﬁts. Keep in mind that demand changes as the weather and temperature change—the colder it is, the more coffee you will sell.

Some c-store retailers are going with a bean to cup program. This is where the coffee bean is ground at the time of serving and each cup is fresh. The main challenge with this program is that it does not handle large volumes of Regardless of the type of equipment you traffic well because it decide on, the next and most important takes several minutes element is training your staff to “respect the to grind and brew a coffee.” Coffee should be treated like a fragile cup of coffee. plant that will die without the proper care. A second The coffee program needs to be nurtured and challenge is checked on regularly. This includes not only that the checking to see whether the pots are full, but equipment that new coffee is brewed at regular intervals is expensive (whether there is coffee left in the pot or not), to acquire that there are plenty of cups and the proper- and to sized lids, that all of the condiments are set maintain. out and are full, and the coffee area is clean The upside and wiped down (coffee drinkers are very is that you clumsy until they’ve had their first cup). If always have you are using cartons or bottles of milk and fresh coffee on cream, make sure that they have not passed hand (as long as their expiration date and that they are you keep enough staying constantly chilled. coffee beans in the hopper) and you can Setting up a regular brewing schedule is charge a premium for the always a challenge. When coffee should be coffee—just like the national brewed depends upon how much is being sold and how old the brewed coffee is in the artisan coffee chains! dispenser. Many retailers use timers for each The person who came up with soaking coffee pot or carafe that sounds an alarm after the beans in hot water created one of the great allocated period of time. Timers are very tastes of all time. The person who came up helpful for air pots to remind employees with selling the caffeinated water created a to fill them, but the timers are not a potential gold mine. n substitute for checking the dispensers on a regular basis. It needs to be top of mind FMN FUELS MARKET WATCH FuelsMarketNews.com and repetitive. Once you’ve set up your coffee program, watch your sales. Do you sell coffee all day long or are you only a morning coffee stop? How much decaf do you sell? Should you be brewing more decaf after 4 PM than regular coffee? Are your customers adding flavors to their coffee (and do your retail prices cover the costs of the flavors)? After a month or two, you should be able to fine-tune your coffee offer so

Roy Strasburger Roy is the President 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 from the most experienced team in the industry.

Most of the products we use are transported by 165 million trucks, which account for 70% of all goods shipped in the U.S., representing $700 billion in value. The balance is shipped by trains with diesel engines. In addition, most construction, farming, and military vehicles and equipment also have diesel engines. As a transportation fuel, diesel fuel offers a wide range of performance, efﬁciency and safety features. Diesel fuel also has a greater energy density than other liquid fuels, so it provides more useful energy per unit of volume. In 2018, diesel/distillate accounted for about 20% of total U.S. petroleum consumption and about 22% of total petroleum consumption by the transportation sector. Trucking is an underappreciated industry—often under assault—but integral to our way of life and a free society. While we talk of transformative industries like technology and medicine let us not forget the original transformative industry, over-the-road transportation. Source: Energy Information Administration

Bottom Line: The 1972 musical drama Cabaret noted in song how money made the world go around. No doubt true, but you could make a good argument for changing the word “money” to “diesel.”

at FuelsMarketNews.com

by Michael O’Brien

Wet Hosing versus Onsite Fuel Tanks Providing solutions to customers is a complex balancing act. On one hand you have internal budgets, strict revenue goals and sales objectives. On the other hand, you have equally important customer relationships to maintain. This delicate balance can be said of just about any industry and is especially evident in fuel distribution and the correlation between wet hosing and onsite bulk fuel tanks. As customers request wet hosing operations, it’s important to educate them on alternative methods and benefits of bulk fuel storage. Distributors must balance the needs of customers with their own budgets for fleet and personnel. Determining the right service and educating customers can help save on budget and grow profits, all while keeping customers happy.

Challenges of Wet Hosing Sometimes called wheel-to-wheel fueling, wet hosing can be labor intensive and expensive. Drivers require Hazmat-endorsement and a CDL. The service is often demanded at night when equipment on the site is not working or the trucks won’t be in the way of day-to-day operations, so refueling can take all night. With 50 large fleet customers, wet hosing likely requires 50 separate drivers and trucks, resulting in a considerable amount of overhead and budgeting difficulties. Because of the demands of the job, there’s often a high turnover rate of these drivers.

Underestimating fill times and overscheduling a driver is easy to do, as is accidentally missing a stop on a busy night. Drivers call in sick and equipment breaks down, making the potential for a missed delivery and an unhappy customer even more possible and costly. If a refrigerated truck goes down, it can result in the costly loss of a truck full of product and claims against the distributor. At the very least, such an error could result in a lost contract. So even though wet hosing appears at first glance to be a great way to boost profits with value-added service and additional drop fees, a hard look at the numbers and associated headaches quickly indicates some serious evaluation of contracts is necessary. With new technology and equipment, fuel distributors can capitalize on the applications that truly require wet hosing service while efficiently and effectively serving the majority of their customer base with onsite tanks that allow customers to take responsibility for their own fueling demands.

The potential of missed deliveries poses another challenge with wet hosing. Wet hosing relies on people, consistency and a keen focus on logistics and scheduling—all things prone to mistakes.

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COMMERCIAL FUELS

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”

While the technology exists to control theft and track fuel usage with onsite storage tanks, few manufacturers offer an integrated and comprehensive solution.

Many customers look to wet hosing as a solution for theft prevention, accurate fuel tracking and budget forecasting. Because the distributor always maintains control of the fuel, the chances of theft are virtually eliminated, and fleet managers receive a detailed report of how much fuel went into each piece of equipment with each fuel drop. This allows for easily forecasting future fuel usage. While the technology exists to control theft and track fuel usage with onsite storage tanks, few manufacturers offer an integrated and comprehensive solution. Knowing the technology exists and finding the right manufacturer to partner with substantially increases confidence in selling alternative onsite methods to customers. Integrated onsite systems offer technology that locks the tank to any user without a card key to unlock the dispense controls, preventing unauthorized use or theft. In addition, since each card key is unique, the system determines which driver is taking fuel, along with refueling frequency and amount of fuel used. This remote monitoring capability aids in tracking how and where fuel is used and in forecasting consumption and costs for the life of the job. These systems allow operators to track inventory levels

Determining the Wet Hosing Need Wet hosing provides a valuable service for fleets in many industries. While the method provides convenient portability for fueling, it’s not always the best choice for every situation. For stationary equipment like reefer trailers or generators, wet hosing may seem like the only option, but a contractor-employed service truck equipped with a trailer-mounted tank easily fulfills the mission for those willing to invest in drivers, tank technology and certifications. Success depends on finding a tank that can be easily and safely transported full. Square tanks with the proper licensing can be transported full and are conveniently trailer mounted. This allows for crews to do their own wheel-to-wheel fueling, which offers the best of both worlds. Fuel is always available, and usage can be monitored. Assisting customers in making this decision requires a keen attention to their needs, the right tank offering and an ability to help them work through the added profit potential of buying fuel in bulk and controlling their own supply. Wet hosing often offers the preferred option for customers in cities and jurisdictions with rigid regulations regarding above-ground fuel tanks. In these instances, the number of tanks available to meet the strict codes is very limited and wet hosing is often the most practical solution. While convenient for the customer, wet hosing presents an array of challenges for the fuel distributor. By integrating an onsite tank and wet hosing strategy —reserving wet hosing for those applications that strictly demand it—fuel distributors can best utilize their resources and efficiently service all customer needs.

Hunter Pump Islands is a custom made, retro-fit system that uses both stainless steel and concrete to reface your gas pump islands. We don’t shut your station down or pull your pumps. Let us save you time and money by eliminating the cost of repairs and annual painting associated with your islands.

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COMMERCIAL FUELS

Wet Hosing Versus Onsite Fuel Tanks

and tank location at any time, helping them take control of fuel supply and avoid downtime associated with a depleted fuel inventory. Offering the comprehensive tank package for customers can reduce the required wet hosing contracts and assist in controlling costs and personnel demands. Often, fuel distributors approach the tank as a free product, making the profit in the distribution of fuel. While this system may have been adequate for round tanks, new technology and the development of cube fuel tanks has led to another revenue stream for innovative fuel distributors. Many distributors who recognize the value of the advanced technology and design now provide the more advanced tank systems with no immediate cost but rather a fuel surcharge amounting to anywhere from one to three cents per gallon. This billing structure provides a revenue stream that outlives the initial price of the tank.

Helping Customers Decide The greatest thing a distributor can do for their customer is ask questions and become a true partner in the situation. Ask customers if they have the internal infrastructure to perform their own fueling onsite. Since there are regulations and licensing required to hold fuel onsite, bulk storage is sometimes not an option for everyone. Some customers may not be willing to take on the liability or insurance fees associated with bulk storage. For them, wet hosing will be the best option. The key to finding the best solution and long-term loyalty is finding a solution to all the customers’ pain points. In some instances, that solution may be wet hosing, but in others, the solution is education. As understanding of the capabilities of onsite fuel storage minimize the demand for wet hosing to those specific instances, distributors will be able to adequately balance their own budgets with customer satisfaction. n

Benefits of Selling Onsite Bulk Fuel

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While onsite storage can offer most—if not all—of the benefits of wet hosing, perhaps the greatest draw is the opportunity for the customer to independently fuel a fleet. Customers always have fuel and full control over their supply along with the ability to adjust as the demands of their site fluctuate. The opportunity to purchase at a bulk rate and have a steady supply can often offset their determination to secure a wet hosing contract. Once they experience the security and freedom of controlling their supply, their loyalty to the solution partner often grows. Relinquishing some of the control of day-to-day fueling gives distributors better control over their own staffing needs and scheduling.

Michael O’Brien Michael O’Brien, Regional Sales Manager—South Central U.S., Fuel Channel at Western Global. Western Global is an international designer and manufacturer of industry-leading tanks and equipment for fuel and fluid handling. Building on a legacy that spans five decades, Western Global offers a wide range of solutions for the safe transportation and storage of fuel, diesel exhaust fluid, lubricants and more. Learn more at www.western-global.com or connect on social media.

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Multifuel Truck Engine by Jamie Musmacher

Energy efficiency and the use of alternative fuels are central to many commercial vehicle OEMsâ&#x20AC;&#x2122; strategies for meeting the stringent emissions limits that are being set in air quality policies. Natural gas is a low-carbon, cleaner-burning fuel that is economical and in abundant supply. The Natural Gas Vehicle Association (NGVA) reports that replacing a diesel burning heavy-duty truck with one running on natural gas is the emissions equivalent to removing 119 traditional combustion engine cars from the road. On the face of it this makes natural gas a good option for use as a transportation fuel. But, infrastructure is still limited, with only 31,000 filling stations globally (60% in

Asia Pacific) and this, combined with slow refueling, limited vehicle range, higher purchase price and lengthy return on investment periods, means the uptake of vehicles powered by this fuel has been slow. Currently it is estimated that some 26 million of the more than a billion vehicles in use today are powered by natural gasâ&#x20AC;&#x201D;95 percent of which are light-duty vehicles. With more than 200,000 natural gas heavy-duty trucks and buses, China is the largest gas for transport market in the world. Looking ahead, we can expect these numbers to grow as China announces that by the end of 2020, it will replace more than one million outdated heavy-duty diesel trucks with more modern electric or liquefied natural gas (LNG) trucks that are capable of complying with China VI emissions limits.

â&#x20AC;&#x153;

With more than 200,000 natural gas heavy-duty trucks and buses, China is the largest gas for transport market in the world.

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Lubricant Technology Natural Gas Engine Technology Developments Engine technology is continuing to develop—rapidly closing the performance gap with diesel. The new generation of commercial vehicles now emerging are increasingly attractive to operators and offer a viable alternative to electrification. In Europe, Volvo Trucks, for example, says it is offering liquefied natural gas as an option to meet customer demands for lower carbon monoxide (CO) emissions without compromising on performance or productivity. The OEM has outlined the technical solution behind the LNG driveline—saying it builds on proven diesel technology. When the truck runs, the liquid natural gas is heated and turned to compressed gas and, before it is injected, a very small amount of diesel is added to the cylinder to initiate ignition. Volvo Trucks expects that one of the big challenges of working with these high-pressure gas vehicles will be to ensure the system is tightly sealed, which means all the seals must offer long-term durability. Volvo Trucks says this set up gives all the advantages of diesel—including high horsepower and torque—but emits 20 percent less CO. And, when the truck is fueled with liquid biogas, which can be derived from organic waste such as green waste, animal residue and sewage, the OEM reports that tank-to-wheel CO emissions can be reduced by 100 percent. In North America, Cummins has announced that its ISX12N 400 hp natural gas engine is certified to the California Air Resources Board’s optional low NOx standard of 0.02 g/bhp-hr, throughout a range of duty cycles. The OEM says that the engine has “electric-equivalent” emissions when running on renewable natural gas. The engine utilizes proprietary sparkignited, stoichiometric (or theoretical) combustion with cooled exhaust gas

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Volvo Trucks expects that one of the big challenges of working with these highpressure gas vehicles will be to ensure the system is tightly sealed, which means all the seals must offer long-term durability.

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recirculation technology and maintenance-free three-way catalyst after treatment. No diesel particulate filter or selective catalytic reduction aftertreatment is required. The ISX12N has been in production since February 2018, and Cummins says that over 1,000 have been produced for its North American customers.

Natural Gas Lubricant Speciﬁcation These latest natural gas engines demand higher performance from the lubricant. And, as oils trend to thinner SAE 10W-30 viscosity grades for improved fuel economy, it is essential to ensure they can deliver robust wear protection over an extended oil drain interval. To protect its natural gas engines using stoichiometric combustion over longer drain intervals, Cummins has introduced a new mobile natural gas engine oil performance specification: CES 20092. One of the key requirements is a two-year field test across multiple natural gas platforms, which demonstrates wear and corrosion protection, oxidation and nitration control, cleanliness performance and emulsion resistance. A second requirement of the new standard is to pass an engine dyno test designed to stress the oil’s oxidation and thermal stability in the natural gas environment. With the use of CES 20092 approved oils, Cummins has recommended increasing FMN Magazine

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the oil drain interval for its ISX12N gas engine to 40,000 miles/64,000 km for vehicles with average road speeds of greater than 25 mph/40km/h. Cummins says all its natural gas engines using stoichiometric combustion will benefit from a transition to CES 20092 oils, which require a more modern oil additive system than previously used for CES 20074 or CES 20085 oils. The new specification requires a much stronger antioxidant combination to provide protection at the high temperatures experienced in modern mobile natural gas engines.

Multifuel Technology Beneﬁts End Users As more fleets operate multiple engines on different fuel types, it is increasingly advantageous for engine oils to offer protection in a multifuel world. What is needed for these fleets is a single oil that is approved across the fuels—meeting the latest Cummins CES 20092 gas engine standard, offering protection for diesel engines above API CK-4 and OEM specifications and carrying API SN approval for gasoline engines. Diesel, gasoline and natural gas engines have very different requirements from the lubricant standpoint. By using innovative technology and advanced formulation know-how, it has been possible to meet, and exceed, the various needs of engines operating on all these fuel types in one package. n READ MORE

at FuelsMarketNews.com

Jamie Musmacher Jamie is Infenium’s Commercial Vehicle Portfolio Manager. Infineum is a world leader in the formulation, manufacturing and marketing of petroleum additives for lubricants and fuels. Established in January 1999, Infineum is a joint venture of two of the most respected names in lubricants and fuels, ExxonMobil and Shell. Infineum has a rich heritage of creating oil additives for commercial vehicles, designed to protect and enhance the performance of engines operating over the road or in off-highway applications.

The EIA predicts the steepest decline in energy intensity from 2018 to 2050 will be in the transportation sector, with the level of energy used per highway vehicle-mile declining by 32% as a result of increasingly stringent fuel economy and energy efďŹ ciency standards for cars and light-duty trucks. Source: EIA Annual Energy Outlook 2019 with Projections to 2050

NOTE: In 1975, U.S. fuel consumption for cars and light-duty trucks was 14 mpg with a goal of 27.5 mpg by 1985. CAFE targets were revised in 2007, raising mpg to 35 by 2020 and 54.5 by 2025. The facts, however, are that today the U.S. has only achieved 16.6 mpg nationally. So, we have only moved the needle 2.6 mpg in 44 years, still a full 37.9 mpg below the target for 2025.

Bottom Line: With the current EPA proposal to roll back CAFE standards and freeze them at 2020 levels, it is hard to predict that a decline in the transportation sector will actually occur when coupled with U.S. population growth and the explosion of second and third car salesâ&#x20AC;&#x201D;60% of households now own two cars and 25% own three or more autos. Fuel consumption should continue to rise even with the incorporation of better gas mileage, alternative fuels, hybrids and electric vehicles.

at FuelsMarketNews.com

BUSINESS OPERATIONS

What Could Possibly Go Wrong?

by Brian Reynolds

They say you canâ&#x20AC;&#x2122;t teach an old dog new tricks! Maybe so, but teaching an old dog a new trick might be easier than teaching everyone in the organization how to operate a new system. Old habits are hard to break and automation is supposed to make work processes easier, more efficient and faster. But stopping the presses and learning new tricks can be very difficult. It helps if everybody knows up front what the true challenges are after a decision has been made to implement new software. Before a purchase is made, the business operator should be seriously reviewing these common challenges.

Length of time

How to conduct business as usual while learning and moving to a new system Training Setting up the new system Support during and after the implementation Return on investment (ROI) FMN Magazine

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BUSINESS OPERATIONS

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What Could Possibly Go Wrong?

Making sure that timelines have been level set and adhered to are crucial for success, and not sticking to a schedule is almost always the point of failure.

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Length of time

Everybody wants to see their new software applications get installed. But it is very easy to set overly optimistic goals for going live. That is especially the case if the new product must be installed in multiple locations. Human resources are always going to be the most valuable commodity, from the vendor to the client. Making sure that timelines have been level set and adhered to are crucial for success, and not sticking to a schedule is almost always the point of failure.

How to conduct business as usual while learning and moving to a new system If you’re going to be successful with a new software solution, somebody must be the boss! Trying to work around people and processes is difficult, but somebody has to make decisions of when to flip the switch! It’s not fun making changes, even when the end result will be a better quality of life. Taking baby steps may be the best way to proceed, but even with baby steps someone needs to be there to hold your hand. If something can go wrong, it will, so having a good plan to keep moving forward while working out the kinks is extremely important. Lack of resources and unwillingness from the employees often leads to disaster. So, making sure a good and steady plan is adhered to is crucial for success.

Training Poor training is worse than no training. Nothing is worse than talking to a brick wall that just wants you to leave. Knowing up front what success looks like will make training easier. Lack of training or an unwillingness to be trained is a great way to fail. If clear goals and time lines are not laid out from the beginning, the implementation process can become pure chaos. It is also very important to establish a “go-to” trainer. Somebody that can be a friend and a coach where a good trusting relationship can be had. FMN Magazine

Setting up the new system If I had a dollar for every time somebody asked about how hard is it to set up the new system, I would have a lot of dollars. Everybody knows this is the hard part. No matter how good a system is, it must be set up correctly. Which means lots of data entering and making sure it is done correctly. Today business systems are pushing the 30-year mark; some older systems may not have the ability to easily export files for things such as site profiles. The most time-consuming part of software implementation is data migration from the old to the new system. Regrettably, it is something you must do, and it is an important part of the process for staying on track. Focusing on doing this part right can also be a big part of the training.

Support during and after the implementation This is where due diligence and probably a visit to where the support will be conducted will pay off. Go check out the home office and see for yourself. Talk to the help desk people. If the help desk is in the back of a nail salon, it’s probably not a good idea to expect much help after the sale. Support is vital. Find out how quickly a webinar can be put together. Find out how long the support team has been working with the product. Find out from other users how good support is.

ROI Realizing the real return on investment following software implementation takes time, but a good rule of thumb is 12 to 18 months. Less than 12 is a great ROI, be it in the form of reduced overhead to improved efficiencies to reducing shrink, all the way to the oldfashioned making more money. 66

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BUSINESS OPERATIONS

â&#x20AC;&#x153;

What Could Possibly Go Wrong? Like any aspect of a technology investment decision, you want buy-in from leadership and all end users. End users will help you check your assumptions about the real costs and benefits. Initiating and leading an ROI analysis is best led by a leader who is capable of thinking strategically about technology and the profitability of the business.

Talk to the help desk people. If the help desk is in the back of a nail salon, itâ&#x20AC;&#x2122;s probably not a good idea to expect much help after the sale.

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ROI is not the law. Sometimes you wonâ&#x20AC;&#x2122;t be able to show positive ROI with numbers, yet there is still a strong business case for your investment. Do your homework and you will be able to make a deliberate, well-informed decision. When it comes to implementing new software for a business with well-established processes, itâ&#x20AC;&#x2122;s not about teaching an old dog a new trick, but instead, tricking old dogs to accept being taught new ways for being more productive and profitable. n

FMN FUELS MARKET WATCH

FuelsMarketNews.com Brian Reynolds Brian began his career working as a teenager in his family-owned jobbership in Cisco, Texas and was at the forefront of many signiďŹ cant industry milestones. Reynolds was an early adopter of cardlock systems in the 1980s, a pioneer of high-volume supermarket fueling centers in the 1990s and one of the key architects of inventing reward-based fueling loyalty in the 2000s. He currently works for Dover Fueling Solutions in ClearView, wet stock management sales. Contact Brian at Brian.Reynolds@DoverFS.com or cell 325-733-6490.

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Fool-Proof Way for Marketers to Increase

Inside and Outside Sales by John J. Kimmel While some sales factors vary from industry to industry, certain things are constant for all salespeople. One of those constants is the effect call volume will have on your results. Whether you sell face to face or on the phone, you must be actively pursuing as many customers as you can without lowering the quality of your calls. So, if you are an inside sales person spending your day making outbound calls to potential clients, how many calls is enough?

To answer that question, we need to work backwards. How many appointments, on average, does it take for you to make a sale? For the sake of this example, let’s say that you close one out of every four appointments. Next, how many calls does it take for you to get an appointment? Let’s say you can turn one out of every five calls into an appointment. Last, how many sales per day do you need to stay on budget? Let’s say that you need two sales per day to hit your quota. That means that you need 5 (calls per appointment) x 4 (appointments per sale) x 2 (sales per day) = 40 calls per day to reach your quota.

x2 =

“”

If you are an inside sales person spending your day making outbound calls to potential clients, how many calls is enough?

FMN Magazine

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BUSINESS OPERATIONS

“What”you need to start considering is “How do I increase my call volume?” I don’t know about you, but I don’t just want to hit my goals—I want to crush them. If you want to do the same, then make more than 40 calls per day. Make 60 calls and beat your quota by 50 percent. Make 80 calls and double your sales. Did you just roll your eyes? Are you thinking, “No one could make that many calls” right now? You are wrong. Someone is doing it, and it’s likely a competitor. That lady or man that seems to be everywhere, taking all your customers… she is making 80 calls per day. Do you want to be better? Do you want to win? What you need to start considering is “How do I increase my call volume?” First, take the time to analyze how you spend your time. How many minutes per day do you spend chatting with your co-workers, taking personal calls, surfing the internet or stopping for coffee? While there is nothing wrong with any of these activities, they are burning precious selling time during the day. If you want coffee, leave home fifteen minutes early. Stop for gas on the way home from work, not during your precious, limited work time. You get the point. If you have never really done an accounting of how you spend your time, you will be shocked at the incredible amount of time that is wasted. You will almost certainly find it is hours per day and not just minutes that you are wasting. Use that time for calls and you will be rewarded. Next, examine your call processes. If you are an outside salesperson, look at your call routes. Are they efficient or are you running back and forth across town for no reason? Many salespeople enter their day with some idea of who they plan to see but end up reacting to phone calls and emails that change their plans and make their travel time very inefficient.

Let’s say that you have a customer that you need to see once per week. Does that customer have an expectation that they will see you walk in the door every Thursday morning around 10:00 AM, or are your visits random? It is amazing how conversations change when you create service expectations with your customers. The phone call that you likely get right now goes something like this, “Good morning Joe, this is Susie from XYZ Stores. I need to go over that new program you mentioned. Can you drop by this afternoon?” And you respond with, “You bet Susie, I need to pick up some materials from the office and should be able to get it to you by about 2:00 pm.” After the phone call you drop what you are doing and drive all the way back to the office and then an hour in the opposite direction to get to XYZ Stores.

But that’s okay because this is your biggest customer, right? You want them to know how much you value their business. Well, frankly, sometimes it is just a huge waste of time. When you have a consistent call plan, you will find the phone call usually goes more like this, “Good morning Joe, this is Susie at XYZ Stores. I need to go over that new program you mentioned when you come in this Thursday.” How much better is that? No special trip to the office, no trip back across town and your customer still knows how much you value their business because you are professional and consistent. What about the times when Thursday is not good enough? What if your customer says, “Good morning Joe, This is Susie FMN Magazine

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“”

How we pursue leads will have a dramatic impact on not only our income and company’s revenue, but also on our reputation.

from XYZ Stores. I know you are coming in on Thursday, but I really need to talk over that program before then. Can you drop by this afternoon so we can review it?” Most of us will immediately respond with a “Yes,” drive all over town and think we are the best sales rep ever. Few of us will ask questions like “Susie, thank you for thinking of our new program, we are all excited about getting it into the market. I am across town right now and don’t have the right materials with me, but I have some at home that I could bring you first thing in the morning and would be willing to be at your door when you open. Would that be soon enough?” In many cases, it will be. You can make your customer happy and keep selling without wasting half the day in your car. How we pursue leads will have a dramatic impact on not only our income and company’s revenue, but also on our reputation. Take the time to look honestly at your schedule and the way you service customers with the intent of looking for ways to cut wasteful time out of your schedule. When you do, you will have more time to make more calls. More calls will mean more sales and when you get that bigger paycheck, you will be glad that you did. n READ MORE

at FuelsMarketNews.com

John J. Kimmel Johnis the author of Selling with Power and has spoken for many state and regional petroleum marketer associations. John 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.

The technologies and expertise continue to improve; perhaps the biggest mistake the anti-fossil fuel business continues to make is to underestimate or downright ignore the ongoing advancements in the coal, oil and natural gas industries. As prices increase, the more access we have to our massive offshore resources and the more desirable they become. Source: Jude Clemente’s “The Quiet Rise In U.S. Offshore Oil Production,” Forbes, April 10, 2019

Bottom Line: With all the advances in offshore exploration and the remarkable success of onshore fracking, it’s important to keep track of the full spectrum of success in U.S. oil production. Every barrel of crude counts.

at FuelsMarketNews.com

FUELS MARKET NEWS

INDUSTRY NEWS

AmeriGas Common Unitholders Approve Merger With UGI UGI Corporation and AmeriGas Partners, L.P. announced that, at the special meeting of the Partnership common unitholders the partnershipâ&#x20AC;&#x2122;s common unitholders voted to approve that certain Agreement and Plan of Merger, dated as of April 1, 2019, by and among UGI, AmeriGas Propane, Inc., the general partner of the Partnership, AmeriGas Propane Holdings, Inc., an indirect, wholly owned subsidiary of UGI, AmeriGas Propane Holdings, LLC, an indirect, wholly owned subsidiary of UGI, and the partnership, and the transactions contemplated thereby, including the merger of Merger Sub with and into the Partnership, with the Partnership surviving as an indirect, wholly owned subsidiary of UGI. n

WEX, Phillips 66 Sign Exclusive Multi-Year Private Label Extension WEX, a leading financial technology service provider, today announced it has signed a multi-year extension to be the exclusive provider of private label and universal fleet card services for Phillips 66. WEX and Phillips 66 have partnered since 2010 to develop a comprehensive sales and marketing engine that relies on emerging payment technologies to support fleet customers and independent marketers and dealers at more than 7,000 fueling locations. n

Low-Carbon, Neste MY Renewable Diesel Now Available in Oregon Neste, a leading producer of renewable diesel fuel, has announced an exclusive partnership with a distributor in Oregon: McCall Companies. Through this partner, fleet owners now have access to highFMN Magazine

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performance low-carbon Neste MY Renewable Dieselâ&#x201E;˘, making this the first time the fuel is available in Oregon. Neste MY Renewable Diesel is produced from 100 percent renewable and sustainable raw materials that cut greenhouse gas emissions by up to 80 percent, compared to fossil diesel. n

OPW Launches 14BP Nozzle, Completes 14 Series Nozzle Family OPW, a Dover company and a global leader in fluid-handling solutions, has announced the release and availability of the new 14BP Nozzle, the final member of the 14 Series of cleaner-fueling nozzles introduced by OPW. The 14 Series fueling nozzles are designed to deliver the cleanest and greenest customer fueling experience in the industry. The 14BP nozzle uses the patented, free-draining and CARB-approved dripless-spout from the 14E ECO nozzle combined with technologies from the industry standard OPW 11BP to achieve a cleaner fueling experience without the cumbersome interlock required in some jurisdictions. n

INDUSTRY NEWS

Tuthill and FuelCloud Announce Technical Partnership to Create Fill-Rite FMS Tuthill and FuelCloud have announced a technical partnership to develop Fill-Rite FMS, a fuel management system that provides advanced fuel monitoring and control for organizations managing their own fuel. Fill-Rite FMS combines Tuthill’s expertise in fuel equipment with FuelCloud’s patented technology to create a fuel management system that is easy to install, intuitive to use and comprehensive for any organization’s needs. Fill-Rite FMS has three components: on-site hardware that tracks fuel and controls tank access, web-based software for managers to monitor and control fuel use, and a mobile app that drivers use to authorize transactions. n

Skupos Digital Platform Tops 9,200 Skupos announced that its digital platform grew beyond 9,200 stores and has more coverage than 7-Eleven, long

the largest c-store group in America. While some Skupos retailers operate chains of several hundred stores, 58% of Skupos locations belong to independent owners with five or fewer stores. For cstores in particular, Skupos has focused on new analytics and reporting. Skupos also continues to expand supply-chain solutions to support direct store delivery (DSD) and wholesale order automation. And in May, Skupos announced the release of Skupos Engage, a platform which allows retailers and CPG brands to deliver brand-funded discounts to consumers directly at the point of sale. n

network, bringing the network to more than 1,000 sites in North America. The companies have spent the last four months traveling the country with six training trailers, putting more than 1,000 technicians through classroom, online and hands-on training to ensure customers have a consistent experience, whether going to a Love’s, Speedco or International Truck dealer. n

Navistar’s Service Partnership with Love’s and Speedco Goes Live

Comdata Inc., a FLEETCOR company, announced a new National Tire Discount Program that gives trucking fleets substantial discounts on commercial tires. Under the new program, Comdata is joining with industry-leading tire manufacturers to offer Comdata fuel card customers access to National Account pricing on truck, trailer and retread tires nationwide. Discounts can average over $200 less than the lowest advertised tire cost. Comdata’s MyFleet Program is a package of services that allows trucking

Navistar’s warranty performance and service partnership agreement with Love’s and Speedco is now fully operational. The partnership, initially announced in March, adds more than 320 Love’s and Speedco locations and more than 1,000 technicians to Navistar’s International® Truck service

Comdata Launches National Tire Discount Program

WHOLESALE FUEL & LUBRICANTS CARDLOCK MANAGEMENT INTEGRATED ACCOUNTING

Business Software for Fuel Marketers of All Sizes “Trinium has enabled us to upgrade our technology to a more modern and functional system, while providing us the necessary flexibility to customize the system to fit our specific needs." Dave Olson, Partner Ernie’s Fueling Network www.erniesfuelingnetwork.com Call (310) 214-3118 to schedule your one-on-one demo today or email sales@triniumtech.com

www.TriniumTech.com/Fuel

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INDUSTRY NEWS fleets to address their most critical operating challenges—lowering costs, staying compliant and accessing the capital they need to run their businesses. n

Renewable Energy Group Opens First Fueling Station

Scully Announces New CEO

Renewable Energy Group, Inc. a leading national advanced biofuel producer, celebrated the grand opening of the company’s first diesel fueling station in Seneca, Illinois. Construction on the around-the-clock, fully-automated station began earlier this year. Diesel customers from trucking fleets to local diesel vehicle owners will be able to fill up with biodiesel blended fuel to conveniently reduce harmful greenhouse gas emissions. REG Seneca, a 60 million gallon-per-year biorefinery located adjacent to the fueling station, will provide the low carbon biodiesel used in the diesel blends between B11 and above. n

Scully Signal Company, a fluid handling products manufacturing company, has announced the appointment of Katrina Scully Ohl as President and CEO. Katrina Scully Ohl is the granddaughter of the founder, Francis P. Scully, and daughter of Robert Scully. Ohl has a wealth of experience in the industry and has held numerous positions within the company, most recently Interim President and Executive Vice President. Ohl has been instrumental in the last few years at Scully in driving initiatives to invest in new product development, improve operations and focus on customer support through active, open communications. n

PDI Releases New C-Store Shopper Report on Customer Behaviors Crucial to Loyalty Program Success PDI, a global company with leading enterprise software solutions serving the convenience retail, petroleum wholesale and logistics industries, has released a report that provides insights into c-store shoppers’ behaviors toward loyalty programs and recommends actionable strategies on how c-stores can improve their programs to attract new members and increase foot traffic. Study results confirmed the popularity of convenience stores and their loyalty programs alike. The vast majority of U.S. adult consumers—89 percent—have visited a cstore in the last six months. Meanwhile, loyalty program membership is expanding, with 42.5 percent of consumers saying they belong to a c-store loyalty program, up 6 percent from 2017. n

FMN FUELS MARKET WATCH

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ATEK Access Technologies’ New Model TSC Digs into Underground Storage Tank Data ATEK Access Technologies launched its new TankScan TSC Fuel Inventory System. The TankScan TSC connects to existing automatic tank gauging (ATG) systems and transmits the tank data to the ATEK Intelligence Platform (AIP). The TSC system allows fuel jobbers to better manage fuel deliveries, avoid run-outs

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FuelsMarketNews.com/advertise Bill Kaprelian 262-729-2629 FMN Magazine

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and optimize fuel purchases while also reducing trucking-related costs, enhancing inventory management, improving customer service and optimizing their profitability. With the AIP, customers can remotely monitor one to 100,000 tanks because AIP provides tank level information anywhere an internet connection is available—via computer, tablet or smartphone. n

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Blackmer® Extends its Line of GNX Series Pumps with New 3- and 4-Inch Models Blackmer®, part of PSG®, a Dover company and a global leader in specialty pumps and reciprocating compressor technologies, is pleased to announce that its GNX Series Sliding Vane Pumps are now available in 3- and 4-inch models. The market’s only alignment-free reduced-speed positive displacement pumps, the Blackmer GNX Series have been designed to optimize the transfer of non-corrosive, non-abrasive industrial and petroleum products for both portable and stationary applications. n

DTN Names Steve Matthesen as New CEO DTN announced that Steve Matthesen will serve as the company’s CEO, succeeding Ron Sznaider, who will remain with the organization as the Vice Chairman of the Board. The appointment comes during a period of global growth and expansion for the company. Matthesen brings a wealth of experience in working with organizations who rely on key data and analytics to drive better business decisions. He has a proven track record of driving innovation and growth within organizations. Matthesen joins DTN after serving as the CEO of Acosta, a B2B sales and marketing agency. He has also held key roles within Nielsen and Boston Consulting Group. n

INDUSTRY NEWS

Gilbarco Passport Releases Outdoor EMV-Acceptance Software for CITGO retailers Gilbarco Veeder-Root announced that after extensive testing of Passport® version 11.04B, CITGO Petroleum Corporation officially released EMV acceptance software for retailers at the forecourt. Along with EMV, Version 11.04B brings Passport EDGE to the CITGO network and is now available to CITGO branded sites with Gilbarco Veeder-Root dispensers. Passport EDGE is Gilbarco’s new tabletbased POS system, which is streamlined for small businesses, available as a low cost subscription and EMV-ready indoor and outdoor acceptance. n

Dover Fueling Solutions and Avanceon Team Up to Offer First End-to-End Retail Fueling Solutions in Pakistan Dover Fueling Solutions has announced that it has signed a distributorship agreement with Avanceon to offer high-end integrated control and automation solutions for retail fueling stations in Pakistan. Under this agreement, Avanceon will serve as a local distributor, sales representative and service provider for all of the DFS product brands, promoting all of DFS’ products, services and solutions, including the product brands of OPW Fuel Management Systems, ProGauge, Tokheim and Wayne Fueling Systems. n

Lube-Tech Selects SkyBitz SMARTank Monitoring Solutions for Rapid Deployment

devices across multiple service industries starting this month. SkyBitz will provide a broad range of its LTE compliant hardware to support a variety of fuel, lube and caustic chemical applications. In addition to reliable hardware, SkyBitz’s web-based software, SMARTank™, provides comprehensive data analytics to deliver enhanced visibility and configurable reporting that drives actionable and intelligent decisions. n

What Does That Mean? Test Your FMN Acumen The list below represents acronyms used in this issue of Fuels Market News. /b

Per Barrel

API

American Petroleum Institute

ATG

Automatic Tank Gauging

b/d

Barrels Per Day

B20

6% – 20% Biodiesel Blend

BLS

Bureau of Labor Statistics

British Petroleum

bpd

Barrels Per Day

Proterra Launches Proterra Energy ™ Fleet Solutions

BTU

British Thermal Unit

CAFE

Corporate Average Fuel Economy

CARB

California Air Resources Board

CDL

Commercial Driver License

CFFP

Cold Filter Plugging Point

Proterra has announced the launch of Proterra Energy™ fleet solutions, a full suite of options that enable turnkey delivery of a complete energy ecosystem for heavy-duty electric fleets, including design, build, financing, operations, maintenance and energy optimization. With this comprehensive solution, operators of medium- and heavy-duty vehicle fleets such as transit bus, school bus, truck and others can lower upfront cost, reduce risk and simplify the transition to electric vehicles. n

Carbon Monoxide

Cloud Point

CTA

Chicago Transit Authority

DPC

Double-Wall Pipe Coupling

DSD

Direct Store Delivery

DSL

Digital Subscriber Line

E15

15% Ethanol Gasoline

EIA

U.S. Energy Information Administration

EMV

EuroPay, Mastercard, Visa

EPA

U.S. Environmental Protection Agency

ERP

Enterprise Resource Planning

EZR

(VeriFone) Enhanced Zone Router

GAO

U.S. Government Accountability Ofﬁce

GDP

Gross Domestic Product

GHG

Greenhouse Gas

GPM

Gallon Per Minute

IGEN Selected as Excise Tax Compliance Solution for Kwik Trip, Inc.

HAZMAT Hazardous Materials

IGEN Fuels, LLC, a leading provider of automation solutions geared toward motor fuel tax professionals, has been selected by Kwik Trip, Inc., the 14th largest convenience store retailer in the country, to automate their motor fuel excise tax compliance process. Kwik Trip is utilizing IGEN’s tax compliance solution to bring greater efficiencies to their tax filing needs. At its core, IGEN provides data automation solutions with a primary focus in motor fuel taxation reporting. n

Lube-Tech, a leader in advanced lubrication and energy solutions, and SkyBitz, a leader in IoT telematics solutions, announced that Lube-Tech would be deploying thousands of tank monitoring FMN Magazine

FuelsMarketNews.com

IoT

Internet of Things

Internet Protocol

ISA

Illinois Soybean Association

kbpd

Thousand Barrels Per Day

kWh

Kilowatt Hours

LNG

Liqueﬁed Natural Gas

LTE

Long-Term Evolution

LTO

Light Tight Oil

Million

mmbpd Million Barrels Per Day mph

Miles Per Hour

MSP

Managed Service Provider

NGVA

Natural Gas Vehicle Association

NOx

Nitrogen Oxide

OEM

Original Equipment Manufacturer

OPEC

Organization of Petroleum Exporting Countries

PCI

Payment Card Industry

PGI

Product Grade Indicator

PMAA

Petroleum Marketers Association of America

POS

Point of Sale

REF

Rigid Entry Fitting

RFS

Renewable Fuel Standard

ROI

Return on Investment

Underwriters Laboratories

ULC

Underwriters Laboratories of Canada

ULSD

Ultra-Low Sulfur Diesel

UST

Underground Storage Tank

VOIP

Voice Over Internet Protocol

VSAT

Very Small Aperture Terminal

WTI

West Texas Intermediate

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American Coalition for Ethanol.....................................49 ADD Systems................................. 31 Biobor Fuel Additives.....................35 Cummins & White, LLP................... 21 Fuels Market News.........................61 Hunter Pump Islands.....................59 IGEN...............................................13 Innospec................ Inside Back Cover Lock America, Inc........................... 67 MidContinental Chemical Company, Inc.................................11 North American Bancard................ 43 OPW Retail Fueling........................ 23 RDM Industrial Electronics, Inc.................. Back Cover SkyBitz Petroleum Logistics................ Inside Front Cover Source North America Corporation... 5 Thunder Creek Equipment............... 3 TMC............................................... 39 Trinium Technologies.....................73 WPMA........................................... 53 FMN Magazine

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