Fuels Market News Spring 2022 by Fuels Market News

SPRING 2022

FUEL FLEXIBILITY FOR DIESEL ENGINES

In the Lead:

Pilot Company’s Joe Butler

UST Liabilities

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32 Fuel Flexibility for COVER STORY

Diesel Engines

The ability to run on a broad range of biodiesel can offer some surprising environmental efficiency benefits.

FuelsMarketNews.com

In the Lead: Joe Butler, The Pilot Company

UST Liabilities

How the fuel supplier and travel center operator moves billions of gallons of fuel and still maximizes the customer experience.

What to consider when assessing underground storage tank risks, financial responsibility, insurance and life cycle.

FMN Magazine SPRING 2022 | 1

04 From the Editor 06 NACS News 10 Fuels Institute

The Carbon Reduction Conundrum

12 Fueled for Thought RETAILER OPERATIONS 14 Failure is an Option

Embrace the risk of failure—but pull the plug when it arrives.

16 Remote Tanks and Generators

As essential businesses, keeping fuel sites operating reliably is crucial.

COMMERCIAL FUELS 20 Choosing Alternative Fuels

Your fuel choices can help you win bids with sustainability requirements.

24 How Much Is Too Much?

Why quarterly driver safety-related activities might be more effective than monthly training.

FUEL MARKETERS 26 A nother Look at Canceling Corrosion

Last issue we examined retail storage tanks; this issue we cover the fuel delivery process.

Net-Zero Heating Fuels by 2050 NEFI works to ensure heating fuels have a place in a low-to-no-carbon future.

50 Industry News 52 Remember This?

26 2 | FMN Magazine SPRING 2022

FuelsMarketNews.com

WHEN CAN YOU OFFER LOW-CARBON FUELS? AND WHAT’S IT GOING TO COST? HOW ABOUT NOW AND ZERO? Low-carbon energy is here right now with E15 and E85. Our team can help you make money with it. In fact, you can probably offer customers the cleaner choices they want with equipment you already have in your station. Find out today with Flex Check. And Go Your Own Road. FLEXFUELFORWARD.COM

FROM THE EDITOR

The Multi-Fuel Engine Our cover story this month is an interesting study into how diesel engines can benefit in the same ways gasoline engines can by being highly flexible on the amount of biocontent that can be burned. Biodiesel mixtures currently are found between B2 (2%) and B100 (100%). Diesel engines typically are approved by their manufacturers for blends up to B5, and in some cases B20. With proper materials compatibility, engines exist that can run on B100; however, at these higher blends there can be issues. The paper illustrates that a diesel blend can be tweaked to provide a range of performance results with some trade-offs involved. Generally, a “multifuel” diesel engine could be tweaked to provide optimized performance whether that is carbon reduction or fuel efficiency. This illustrates that while in some circles electrification seems imperative, there’s still significant development that can take place with internal combustion engines, increasing their competitiveness where carbon emissions are concerned. When the idea of this article was presented, it brought back some memories from my time in the military during the late Cold War. True multifuel diesel engines were a feature in a number of U.S. vehicles developed in the 1960s and from the former Soviet Union around the same time. These were multi fuel in the sense that they were designed to run on a range of fuels and still function at some reasonable level of performance. Fuels included gasoline, jet fuel (kerosene), heating oil (basically diesel), hydraulic fluid, etc. In some cases, for example gasoline, motor oil needed to be added to the mix. The concept made sense in the perspective of the Cold War. The ability to fill up with practically any hydrocarbon was seen as an enticing opportunity, 4 | FMN Magazine SPRING 2022

EDITORIAL Keith Reid Editor-in-Chief (847) 630-4760 kreid@fmnweb.com

given expected suppy chain disruptions. These engines tended to be found in 2 ½- and 5-ton trucks and the gas turbine used in the M1 Abrams tank. As you might expect, such vehicles (the Abrams tank excluded) are often sought out by today’s “end of the world” preppers as an almost Holy Grail solution to their Mad Max scenarios. The concept sounded better on paper than it performed in practice, and virtually all these engines spent their careers burning diesel motor fuel. While an engine can be engineered to run on a variety of remarkably different fuels, various mixtures provide varying performance results. In some cases, there was a lengthy setup procedure to get an engine prepared to run on a certain fuel. And not all of these engines were to the same quality, even on the base diesel fuel. Notably, the engine developed for the British Chieftain tank was notoriously unreliable and underperforming and was the component that made a potentially great tank mediocre. Today’s technology could probably take this concept to the next level, but it is assumed that we will be able to sufficiently maintain and protect the logistics pipeline to minimize such concerns. As the focus shifts back from counterinsurgency operations to fighting near-peer opponents, let’s hope that’s the case.

Kim Stewart Editorial Director (703) 518-4279 kstewart@convenience.org Lisa King Managing Editor (703) 518-4281 lking@convenience.org CONTRIBUTORS Linda Gelfand, Ed Kammerer, Maura Keller, Steve Klein, Dr. Vikram Mittal, Mark Murrell, Dr. Raj Shah, Karandeep Singhv, Roy Strasburger, Karen Turner DESIGN Imagination www.imaginepub.com Cover image by Artem_Egorov/Getty Images

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

PUBLISHING Erin Pressley Publisher (703) 518-4208 epressley@convenience.org Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org

EDITORIAL COUNCIL RETAILER/MARKETER MEMBERS Josh Asche, senior vice president, COO, Hy-Vee Fast & Fresh; Mark Fitz, president, Star Oilco; Derek Gaskins, chief marketing officer, Yesway; Kevin Smartt, CEO and president, Texas Born (TXB) VENDOR/SUPPLIER MEMBERS Regina Balistreri, director of marketing, ADD Systems; Gary Lackore, director of sales – Americas, MidContinental Chemical Company Inc.; Kaylie Scoles, marketing director, RDM Industrial Electronics Inc.; Jen Threlkeld, product marketing manager, Dover Fueling Solutions Fuels Market News Magazine is published quarterly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscription Requests: circulation@fmnweb.com POSTMASTER: Send address changes to Fuels Market News Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA.

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

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

FuelsMarketNews.com

Many Brands One Mission Your Success The fueling and convenience retail industries are uniquely complicated. There are so many products and services that must work seamlessly together for each system to function. In the past, owners would have to work with countless vendors and companies to build, operate and maintain even a single retail location. At Dover Fueling Solutions, we didn’t see this complexity as a challenge; we saw it as an opportunity to capture all the disjointed hardware and software into a single, integrated source. And that’s exactly what we did. We became the single source. We brought it all together. We made the system work for our customers. Why? Because it just made sense. Simplicity is what everyone is looking for — and simplicity is what we deliver.

DOVER FUELING SOLUTIONS

©2022 Dover Fueling Solutions. All rights reserved. DOVER, the DOVER D Design, DOVER FUELING SOLUTIONS, and other trademarks referenced herein are trademarks of Delaware Capital Formation Inc., Dover Corporation, Dover Fueling Solutions UK. Ltd., and their affiliated entities, registered or claimed in the United States and various other countries.

There are 148,026 convenience stores operating in the United States, a 1.5% decrease in the number of stores from a year earlier, according to the 2022 NACS/NielsenIQ Convenience Industry Store Count. Convenience stores sell an estimated 80% of the motor fuels purchased by consumers in the United States. The new store count shows that 116,641 convenience stores sell motor fuels (78.8% of all convenience stores). There were 4,897 fewer stores selling motor fuels compared to the year prior, but a direct comparison is imprecise because the 2022 store count reflects a slight methodology change for c-stores that sell fuel. The industry decline was led by a 3.1% decrease in single-store operators, which still account for 60.4% of all convenience stores (89,336 stores). The decline of single-store operators continues a multi-year trend; single-store operators made up a record 63.2% of the industry in 2017. Meanwhile, the percentage of single-store operators that sell fuel dropped to 54.6% in 2021, the lowest since the metric has been tracked in 2005. The decline in the convenience store count reflects the decline of other retail brick-and-mortar stores, except for dollar stores.

Store Count by Retail Channel Channel

2022

2021

Change

148,026

150,274

(1.5%)

Grocery

45,687

47,066

(2.9%)

Drug

40,402

41,000

(1.5%)

Dollar

35,501

34,215

3.8%

Convenience

6 | FMN Magazine SPRING 2022

In addition, there are “gas station/kiosk” stores that sell fuel but not enough of an in-store product assortment to be considered convenience stores. Overall, there were 14,826 kiosks in 2021. The kiosk format continued to decline—down 5.2% the past year and 32.9% over the past six years—as more consumers sought out stores that have robust food and beverage offers. Despite the fourth straight yearly decline in stores, the overall convenience store count is about the same as a decade ago (148,126 stores in 2012). With the U.S. population at 332.4 million according to the U.S. Census Bureau, there is one convenience store per every 2,245 people. “The new store count reflects ongoing changes that are happening in retail as our industry continues to invest in their operations and redefine convenience,” said NACS Vice Chairman of Research & Technology Chuck Maggelet, who is CEO and chief adventure guide of Maverik Inc. “Our industry had record in-store sales in 2020 and was equally optimistic about continuing that sales trend in 2021. These opportunities to attract consumers and grow sales require new technologies and often different footprints that were not possible with many of the legacy stores that closed,” Maggelet said. He added that about 1 in 7 Maverik stores were remodeled or improved in 2021 and that the company expects to do the same again this year. FuelsMarketNews.com

PHOTO©WENDELLANDCAROLYN/GETTY IMAGES

U.S. Convenience Store Count Stands at 148,026

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State Rankings Texas continues to have the most convenience stores (15,742 stores), or more than 1 in 10 stores in the United States. The remainder of the top 10 is the same from the year prior: California is second at 12,053 stores, followed by Florida (9,400), New York (7,848), Georgia (6,448), North Carolina (5,690), Ohio (5,537), Michigan (4,819), Pennsylvania (4,629) and Illinois (4,623). Texas is the only state in the top 10 that added stores (+47). Meanwhile, New York (-248), Florida (-219) and North Carolina (-200) lost the most stores. Alaska (174) has the fewest stores. The 2022 NACS/NielsenIQ Convenience Industry Store Count is based on stores in operation as of December 2021.

Kass Joins Fuels Institute Marjorie Kass has joined the Fuels Institute as director of marketing and communications. Kass comes to the Fuels Institute with a background in communications, marketing and brand management, with significant experience in the energy sector, including stints with ExxonMobil, NATSO and Constellation Energy, as well as the Smithsonian Networks and Showtime Networks. Her work has been recognized with numerous Telly, CTAM and BDA awards. She also was a finalist for a Clio Award for a spot that is in the permanent collection at MoMA. The Fuels Institute publishes fact-based research projects designed to answer relevant market questions for industry stakeholders—from those trying to make strategic business decisions to policymakers considering legislation and regulations affecting the fuels and vehicles markets.

Calendar of Events

MAY Conexxus 2022 Annual Conference May 01-05 | Loews Ventana Canyon, Tucson, AZ NACS Leadership for Success May 15-20 | Glen Allen (Richmond), VA NACS Convenience Summit Europe May 31-June 02 | Berlin, Germany

JULY NACS Financial Leadership Program at Wharton July 17-22 | The Wharton School, University of Pennsylvania Philadelphia, PA NACS Marketing Leadership Program at Kellogg July 24-29 | Kellogg School of Management, Northwestern University Evanston, IL NACS Executive Leadership Program at Cornell July 31-August 04 | Dyson School, Cornell University Ithaca, NY

OCTOBER NACS Show October 01-04 | Las Vegas, NV NOVEMBER NACS Innovation Leadership Program at MIT November 06-11 | MIT Sloan School of Management Cambridge, MA NACS Women’s Leadership Program at Yale November 13-18 | Yale School of Management New Haven, CT

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

8 | FMN Magazine SPRING 2022

FuelsMarketNews.com

PHOTO©QUISP65/GETTY IMAGES

APRIL NACS State of the Industry Summit April 12-14 | Rosemont (Chicago), IL

Release Your Potential

It starts with the right software Modern energy distribution presents unlimited opportunities for growth. Let ADD Systems help you realize all those possibilities as we meet today’s challenges of speed, accuracy, mobility, and ever more important, scalability.

ADD Systems has been providing solutions to the energy distribution industry – retail and wholesale fuel, propane, convenience stores and more – since 1973. Learn more at addsys.com 800-922-0972

Life-Cycle Carbon BY JOHN EICHBERGER

s the world pursues a vision of a decarbonized transportation market, the contribution of battery electric vehicles (BEV) will be significant. Yet, one must not confuse the lack of a tailpipe with a vehicle that has no carbon emissions. Likewise, the internal combustion engine vehicle (ICEV) will remain dominant in the market for decades, and we must simultaneously pursue options to reduce its carbon emissions. A new report from the Fuels Institute, “Life Cycle Analysis Comparison – Electric and Internal Combustion Engine Vehicles,” released in January 2022, takes an objective look at the carbon emissions from each phase in the life cycle of BEVs, ICEVs and hybrid electric vehicles (HEV) to help determine where opportunities exist to most effectively take carbon out of transportation. This article presents a short summary of the report. Written by Ricardo Consulting, the paper starts with a review of more than 150 documents evaluating life-cycle analyses (LCA) to determine commonalities and establish consistent parameters. Ricardo then engaged Argonne National Laboratory’s GREET model to develop a baseline LCA for the average U.S. market before evaluating various scenarios to see how they might affect carbon emissions. The paper was designed to move beyond the finger pointing between EV and ICEV advocates and establish a foundation upon which we might be able to encourage more constructive discussions about carbon mitigation strategies. THE NATIONAL AVERAGE While not the best way to optimize deployment of solutions, establishing a national average for life-cycle carbon emissions is a good way to start. The baseline assumes a vehicle is a small utility vehicle and runs for 200,000 miles over its lifetime. The ICEV operates on E10, and the BEV has a 300-mile-per-charge range and is powered by a utility system that reflects the average carbon intensity of the U.S. grid. Under these generic conditions, a BEV delivers nearly 41% fewer tons of carbon over its lifetime than a comparable ICEV. Meanwhile, a typical HEV delivers nearly 29% fewer tons of carbon. (These results are comparable with other LCAs presented in other reputable studies.) What is important to note about this data is that the carbon emissions of the vehicles occur at different stages of their life cycle. Because the BEV emits zero carbon when in operation, all its carbon emissions occur before vehicle operation. By contrast, the ICEV generates the majority of its emissions during the combustion cycle associated with driving. When we analyze the carbon emissions associated with material sourcing, manufacture and well to tank (that includes

10 | FMN Magazine SPRING 2022

electricity generation and petroleum refining and distribution), the BEV generates twice the carbon emissions as an equivalent ICEV. However, once the vehicle starts to serve its purpose (moving passengers and goods from here to there), the relationship changes dramatically. Over a 200,000-mile lifetime, the combustion cycle adds 48 tons of greenhouse gas emissions and increases the ICEV total emissions to a level that is 41% higher than the BEV. Similarly, the HEV’s operations increase its greenhouse gas emissions by 18 tons and results in a total footprint that is 21% higher than the BEV, yet 29% lower than the ICEV. What this demonstrates is that there are opportunities to reduce carbon emissions for all three vehicle types. If the carbon intensity of manufacture and assembly of the BEV can be reduced, these vehicles will represent a much better option for the market. Likewise, if the carbon intensity of the fuel being used by ICEV can be lowered, the overall carbon profile of ICEVs and HEVs could be reduced and the difference between the three vehicle types could be minimized. FACTORS TO CONSIDER As we consider the potential paths to reducing carbon emissions from each vehicle type, it is important to also understand how variable factors can influence the emissions of each vehicle. FuelsMarketNews.com

FIGURE 1 | Summary of GHG Emissions Cradle-to-Grave Analysis 66

Tons of CO2

47 48

Disposal, recycling Tank to Wheel Well to Tank

Manufacture

22 12 1 4

2 5

ICEV

HEV

Material Sourcing

6 5 BEV

-1

SOURCE: RICARDO CONSULTING

Tons of CO2

FIGURE 2 | Summary of GHG Emissions Cradle-to-Grave Analysis 39

28 17 12 1 4 ICEV

Well to Tank Manufacture

Material Sourcing

22 2 5 HEV

6 5 BEV SOURCE: RICARDO CONSULTING

The average presented above assumed the BEV was operating in an average carbon intense grid market, but not all markets are average. Where a BEV is operated can have a significant influence on its life-cycle carbon emissions. Different regions generate their electricity from different fuels, resulting in wide variation in overall carbon emissions. The other concept that jumps out of this analysis is the importance of reducing the carbon intensity of the liquid fuels that power combustion engines. From a prior study published by the Fuels Institute, we know that biofuels present a lower carbon profile than petroleum, and there have been developments that improve even upon this assessment. The challenge FuelsMarketNews.com

is the fact that most of these fuels are blended in small volume percentages, limiting their overall effect on carbon emissions. THE FULL REPORT This article presents a very quick sample of some of the findings of this new Fuels Institute report, available at www.fuelsinstitute.org. I encourage you to download your free copy because it contains so much more analysis. You will learn that the way one drives a BEV will have a significant impact on a battery’s range and how often a BEV battery might need to be replaced and that, even when considering the cost of replacing a battery, a BEV still represents a lower total cost of ownership than an ICE vehicle option.

If the carbon intensity of manufacture and assembly of the BEV can be reduced, these vehicles will represent a much better option for the market. Likewise, if the carbon intensity of the fuel being used by ICEV can be lowered, the overall carbon profile of ICEVs and HEVs could be reduced and the difference between the three vehicle types could be minimized.

John Eichberger is executive director of The Fuels Institute. For more information, visit www.fuelsinstitute.org.

FMN Magazine SPRING 2022 | 11

FUELED FOR THOUGHT

Here are five keys to selecting future-proof equipment. BY KAREN TURNER

hether purchasing solutions for a new store or upgrading existing systems, the equipment choices that retail fuel sites make in the next five to 10 years will directly influence how profitable and competitive they will be. With that in mind, here are five aspects to equipment selection that station operators should vet with their equipment suppliers to avoid making decisions that could marginalize their longevity. 1. ASSESSING VALUE REQUIRES A DEEP DIVE. Advanced capabilities typically come with higher price points that can sometimes cause sticker shock. Don’t let that halt equipment research. For instance, today’s cutting-edge fuel dispensers can include high-resolution touchscreens the size of computer monitors, contactless payment options and sophisticated platforms that provide personalized experiences. The primary features of these new solutions deliver value in their own right, but they are often only part of the product’s value story. Some value-adding features are obvious and easy to understand—like a POS that can double as a customer-facing self-serve kiosk. But as digital solutions play a larger role in forecourt and convenience operations, advanced technologies are challenging station operators to understand the value of product capabilities they literally cannot see. Cloud-based solutions that support remote operations, scalability and reliability, and open architecture platforms that eliminate limitations posed by proprietary closed architecture, are two prime examples. 12 | FMN Magazine SPRING 2022

2. FORECOURT EQUIPMENT THAT CREATES A WELCOMING, SAFE AND PLEASANT CUSTOMER EXPERIENCE HAS NEVER BEEN MORE IMPORTANT. Curb appeal has long been vital for attracting customers, but a modern, convenient and contactless experience—both inside and outside the store—is having an even greater impact in today’s health-conscious, security-focused and time-starved world. The forecourt needs to make a great impression from the street and then deliver a fast, easy and safe fueling experience. While lighting, branding and overall forecourt aesthetics are key drivers of this, the value a dispenser or EV charger’s footprint and customer interface yields should not be underestimated. Not unlike the vehicles they fuel, dispensers and chargers come in different shapes and sizes—from big and boxy to compact and sleek. How FuelsMarketNews.com

PHOTO© ANTONO_DIAZ/GETTY IMAGES

Station Staying Power

For those reasons, fuel site operators should ask their equipment supplier to explain how new fueling system and c-store technologies may contribute to a lower total cost of ownership or deliver added value. Considerations include: • Does the new technology replace or eliminate hardware components that are considered wear parts or potential failure points? • Will the solution be upgradeable to accommodate future technologies? • Will the solution relieve labor requirements (such as a need for an operator or technician to be on-site to perform updates or upgrades because the solution can facilitate them remotely)? • Is the solution built on an open or closed architecture? Can it facilitate integrations with adjacent businesses or other aspects of the operation? • Has the manufacturer designed features into the solution that may expand its functionality or otherwise bring additional value to the enterprise in the future?

these relate with the space around them contributes to the consumer perception of the brand, be it open and airy, rugged and sturdy, or perhaps cramped and cluttered. Additionally, the level of customer autonomy at the point of purchase is likely to increase. Ask suppliers how equipment will help them adjust for this transition. 3. SOLUTIONS THAT HELP STATIONS LEARN MORE ABOUT THEIR CUSTOMERS WILL CONTRIBUTE TO HIGHER SALES. Solutions that help marketers learn more about customers in order to provide them personalized experiences at multiple interfaces will increase higher-margin sales. The ability to link a single loyalty program via a mobile app, with the dispenser interface, on digital marketing displays, points of sale, self-checkouts and so forth, enables retailers to engage with customers in a way that is agile and responsive. Serving customers the right advertising or promotion at the right time will drive sales and help retain business. 4. SOLUTIONS THAT PROVIDE STATIONS REMOTE ACCESS TO OPERATIONAL DATA WILL CONTRIBUTE TO WORKFLOW AND MAINTENANCE EFFICIENCIES, LOWER MAINTENANCE COSTS, REDUCE INVENTORY LOSSES AND INCREASE UPTIME. For decades, operators have been monitoring underground storage tanks, piping and associated components for problems that will jeopardize safety or impact the environment. However, UST equipment is not the only system that benefits from consistent surveillance. In many cases, station operators don’t know about problems with other vital equipment until a customer tells them about it. At the dispenser, this often manifests itself as slow flow, receipt printer errors, malfunctioning nozzles or a down payment module. All of these scenarios contribute to a poor FuelsMarketNews.com

customer experience, unplanned downtime and inefficient maintenance. New products that capture equipment performance and diagnostic data alert operators to issues so they can be addressed before they result in a total breakdown. Imagine knowing that a cooler is beginning to fail before perishable items expire or if a car wash pump is starting to go bad. If technical assistance is required, remote access to diagnostic data such as error codes can contribute to a more expedient repair experience in fewer visits. 5. CONSIDER THE VALUE PROPOSITION OF THE EQUIPMENT MANUFACTURER, NOT JUST THE VALUE PROPOSITION OF INDIVIDUAL SOLUTIONS. As fuel site operators look to the future, to some degree they are planning for circumstances they can’t yet conceive (who would have imagined 10 years ago that c-stores would be advertising on cooler doors, for example?). Because of this, it is important to have awareness of a manufacturer’s commitment to helping fuel sites navigate uncharted waters and make meaningful change in a manner that will preserve maximum investment. Although obsolescence is inevitable, a manufacturer’s commitment to adapting an existing system for as long as possible rather than starting over benefits station operators in the long run. Product development capabilities are another consideration. There are a limited number of product development resources serving the fueling industry. Manufacturers who align with adjacent partners are more likely to bring solutions to market faster. Whether fuel site operators are planning their long-term profit strategies or how to position their business to make it attractive to a buyer, equipment investments can play a pivotal role in financial outcomes. Practicing due diligence to define solutions that provide value above and beyond their primary capabilities will be key to creating a competitive advantage.

Solutions that help marketers learn more about customers in order to provide them personalized experiences at multiple interfaces will increase highermargin sales.

Karen Turner is director of retail sales solutions at Source North America. She has more than 33 years of experience in the petroleum equipment industry in engineering, product management and sales. Contact her at kturner@sourcena. com or visit www.sourcena.com to learn more.

FMN Magazine SPRING 2022 | 13

RETAIL OPERATIONS

Failure Is an Option Embrace the risk of failure—but pull the plug when it arrives. BY ROY STRASBURGER

or a brief, shining moment, I was the quarterback of a football team. Granted, it was in middle school, but the coach looked at me and saw a kid who was too small to play on the line and too slow to be a receiver or defensive back, so he decided to give me a chance at quarterback—basically through the process of eliminating all the other options. Growing up in Texas, football is life. Especially in my hometown, where parents held back their sons for a year 14 | FMN Magazine SPRING 2022

(or two) so that they would be bigger when they got to high school. A couple of the guys on my 8th grade team were already shaving. I was an unexceptional football player. I didn’t have the skills necessary to be a standout, and my challenge was compounded by the fact that I had very poor eyesight and couldn’t see the receivers down field. I quickly came to the realization that I was never going to play in the pros. One day after practice, I gathered my

nerve and told the coach that I wanted off the team. In his office, I received what might have been the standard coach’s speech in early 1970s Texas (it was a speech and not a discussion)— that if I quit now, I would be a quitter for the rest of my life. Positive affirmation was not yet a thing. I can still remember how nervous I was to tell my father that I was quitting the team because I thought I was letting him down. But I was completely wrong. My father supported my choice and said that I should do what I felt was best. He wasn’t going to judge me. He told me that I would only be a quitter if I allowed myself to be. I had failed. But I was not a failure. Instead, I found that I enjoyed and was good at tennis. Eventually, I became captain of the high school varsity FuelsMarketNews.com

PHOTO©THOMAS BARWICK/GETTY IMAGES

RETAIL OPERATIONS

tennis team and made it to the state tournament. In an alternative universe, I would have sat on the bench in a football uniform for four years. Life is about taking risks. If you never wanted to fall, you would never have learned how to walk. If you never wanted to have an accident, you would never have learned how to drive. If you never wanted a broken heart, you would never have loved (OK, that may be getting too clichéd). My point is—nothing is accomplished without taking a chance. Taking a risk means that there is a very good chance that it will end in failure. Our human nature wants to avoid failure because it makes us feel bad or inadequate—not to mention feeling embarrassed. The problem with failure (which, by definition, means that something doesn’t work) is that it causes you to waste resources—either time, money, health or goodwill. If you keep putting the resources into a program that will not succeed, you are preventing yourself from using these resources for a different project that might be successful. I believe in “fast failure”—recognize when things are not working out, and quickly pull the plug rather than holding on and hoping that things will change for the better. You need to understand the concept of “sunk costs”—putting more resources into a failing project will not let you recoup the original resources you’ve spent. Sometimes you just must stop. When you decide to try a new FuelsMarketNews.com

program at your store, or invest in a new business, it is essential to know how you are going to define success and failure. This is different from a business plan, which focuses on the optimistic view (success). You need to clearly understand the minimum you need to accomplish and when you need to achieve it. Know what you must do to avoid failure. You have opportunities all the time—dedicating shelf space to a new product, trying out new technology, installing a foodservice item or opening a new store. You must try these things to improve and grow your business. But doing so will cost you resources. Your goal can be whatever you choose: sales, profitability, units sold, customer satisfaction or any other metric. The key is to identify something that can be quantified and measured. You need to know where the goal posts are (to use a football metaphor), and you should not move them unless you have a very clear understanding of what your new goal is. You also need to know your timeframe. When do you need to accomplish your objective? Set your timeline and keep to it. If you run out of time, move on to something else where you have a better chance of being successful. We cannot advance without taking risks, and we cannot take risks without sometimes failing. Try new ideas and programs. When they don’t work out, walk away. You may have failed, but you are not a failure.

I believe in “fast failure”—recognize when things are not working out, and quickly pull the plug rather than holding on and hoping that things will change for the better.

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

FMN Magazine SPRING 2022 | 15

Remote Tanks and Generators As essential businesses, keeping fuel sites operating reliably is crucial. BY ED KAMMERER

he onset of the global COVID-19 pandemic, especially in the early months of 2020, brought unprecedented attention to businesses that were regarded as “essential,” with great importance placed on those that were able to continue operating as expected while the full parameters and effects of the pandemic still were being determined. In reality, essential businesses have always existed and include such entities as hospitals, schools, 16 | FMN Magazine SPRING 2022

military bases and other governmental institutions that must be kept operational during periods of emergency. In addition to those operations usually associated with emergencies, another essential business sometimes overlooked is the retail fuel station, and, in many cases, there are regulations in place to ensure these types of businesses remain operating. For example, in times of emergency, Florida’s Statute Chapter

526 Section 143 (526.143)—Alternate Generated Power Capacity For Motor Fuel Dispensing Facilities—requires retail motor-fuel facilities to remain operational in the event of a “major disaster,” which is defined as “a disaster that will likely exceed local capabilities and require a broad range of state and federal assistance.” Specifically, the statute reads that “each motor-fuel retail outlet…which is located within one-half mile proximate to an interstate highway or state or federally designated route must be prewired with an appropriate transfer switch and be capable of operating all fuel pumps, dispensing equipment, life-safety systems and payment-acceptance equipment using an alternative generated power source.” To ensure operation if or when a state of emergency is declared, fuel retailers that must adhere to the statute, along with other essential FuelsMarketNews.com

PHOTO© IBNU ALIAS/SHUTTERSTOCK

RETAIL OPERATIONS

businesses such as hospitals and governmental facilities, will typically install a diesel-powered backup generator system to provide electricity if the power supply is interrupted. In these cases, the facility may have up to a 20,000-gallon (75,000-liter) tank installed either aboveground or underground to store diesel fuel dedicated solely for use in the backup generator. In some applications, there also will be a 200-gallon (750-liter) day tank to receive diesel fuel fed through a supply line when the generator is in use. An overflow return line also is used to prevent the tank from exceeding its capacity as it is being fed. Additionally, a growing number of fuel retailers are diversifying their operations to the point that they also serve as fuel suppliers, meaning they may have supply contracts with various hospitals, schools and governmental entities that must be kept operational. This means the fuel supplier may not only be delivering diesel for backup generators but also fuel oil for boilers and water heaters. OIL-BURNING EQUIPMENT STANDARDS In 1957, the CSA Group, a global nonprofit dedicated to standards development, testing, inspection and certification for public and private-sector industries, created standard CSA B139, Installation Code for Oil-Burning Equipment, which was updated for the 10th time in 2019 and is dedicated to supporting the safe operation of oil-burning equipment. This standard specifies requirements for the installation of large oil-burning equipment, particularly when it is used in water-heating and power-generation applications that feature stationary or portable oil-burning equipment, including boilers, water heaters and stationary internal combustion engines (i.e., generators) used in emergency power situations. CSA B139 also provides standards for the installation or altering of ancillary equipment, including piping and tubing systems, control devices, venting FuelsMarketNews.com

systems and underground supply tanks, aboveground outdoor tanks and aboveground tanks installed inside buildings. The need for emergency backup systems at many businesses and governmental institutions, along with the strict tenets of CSA B139, requires the development of an emergency fuel storage and supply system that will not only perform when needed—which, in some cases, may be after it sits idle for numerous years—but also will do so in a safe, environmentally sensitive way. The design and operation of these emergency systems are unique to the specific location, so there can be no “one size fits all” solution for these so-called snowflake installations. This means the operators of these places need to identify and work with a supplier that can provide all the necessary system components, which makes it easier to outfit unique system configurations.

In addition to those operations usually associated with emergencies, another essential business sometimes overlooked is the retail fuel station.

MITIGATING AN EMERGENCY Realizing the importance of keeping essential businesses operating during times of emergency, and well aware of the pivotal role that diesel generator sets and fuel oil boilers play in these situations, forward-thinking manufacturers and suppliers of fueling systems for emergency generators have begun designing systems that give the operator access to a reliable fuel supply for generators and boilers that are fed from remote tanks. A typical setup features a ¾-inch supply line and a 1-inch overflow return line that run from the remote aboveground or underground storage tank (AST/UST) to the emergency generator or boiler day tank. Both lines are inserted into a common flexible access pipe that provides retractable access to the fuel lines. The supply- and return-line piping are connected to the generator/boiler and AST/UST via a double-entry boot fitting. Flexible piping excels in these types of applications for several reasons: • Its increased flexibility lowers the FMN Magazine SPRING 2022 | 17

RETAIL OPERATIONS

18 | FMN Magazine SPRING 2022

amount of force required to bend the pipe, making it easier to fit the parameters of the site’s configuration, which also makes installation quicker and easier, especially in cold weather. • The piping system is installed in continuous runs where all fittings are situated in containment chambers; this helps eliminate buried fittings, couplings or joints in the ground, and therefore helps protect against accidental fuel leaks. • The pipe coupling or fittings are made of stainless steel to be compatible with any type of fuel and to withstand harsh environments both above and below ground. • The fuel oil or diesel piping can be installed in an access pipe that gives it the ability to be replaced, removed or repaired without the need to dig up the ground or disrupt the business to which it is supplying fuel and backup power. • The use of an enhanced fluoropolymer liner, such as Kynar, makes the piping denser and more permeation resistant to any type of fuel. Finally, the most effective of these piping systems will be engineered to be compatible with the site’s existing tank sumps, transition sumps, manholes and other ancillary components that may be needed to fit the demands of the specific installation. This eases the demands that are placed on system

design, installation and operation. For essential businesses, it is critical that they always operate as expected, even under challenging circumstances. In places like Florida, the definition of essential businesses includes fuel site operators that are situated along vital roadways or supply fuel to other essential businesses. Recognizing the importance for any and all essential functions requiring a diesel-powered generator or ready fuel oil supply to operate seamlessly at all times, targeted CSA 19-approved fuel supply systems are being developed that will help ensure the efficient and cost-effective operation of all oil-burning equipment when it is called upon in case of emergency.

Ed Kammerer is the director of global product management for OPW, based in Cincinnati, Ohio. He can be reached at ed.kammerer@ opwglobal.com. 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, go to opwglobal.com.

FuelsMarketNews.com

PHOTO© ALIAKSAB/SHUTTERSTOCK

The need for emergency backup systems at many businesses and governmental institutions, along with the strict tenets of CSA B139, requires the development of an emergency-fuel storage and supply system that will not only perform when needed—which, in some cases, may be after it sits idle for numerous years—but also will do so in a safe, environmentally sensitive way.

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Choosing Alternative Fuels Your fuel choices can help you win bids with sustainability requirements. BY STEVE KLEIN

any fleets are in the midst of bid season this time of year. With private and public sector organizations placing a growing importance on making environmentally responsible decisions, institutions that hire fleets are looking more closely than ever at their suppliers’ sustainability efforts. Let’s take a look at some tips for fleets seeking to convey strong sustainability data in bid responses. Then I’ll 20 | FMN Magazine SPRING 2022

break down some common alternative fuel options that can help you get there. 1. TRACK AND TOUT YOUR DATA. Organizations issuing RFPs are starting to ask for more and more data, both emissions-related and related to the fuel itself. If you have the numbers to prove that you’re a lower-carbon option, take the opportunity to show them how that could benefit their

business. If you aren’t tracking this kind of information yet, talk to your fuel partner to see if they can help. 2. SELL YOURSELF AS A SUSTAINABILITY PROVIDER… RIGHT NOW. A lot of attention is being paid to the development of electric trucks. That’s fine, but the infrastructure and technology are just not there yet for trucking applications and won’t be for a while. If you’re waiting for electric vehicles before getting on board with sustainability, you’re losing time and money. For 2022 and, really, the next few years, using drop-in solutions in your existing vehicles will help lower fleet emissions immediately. 3. TAKE ADVANTAGE OF THE FINANCIAL BENEFITS OF CLEANER FUELS. Sustainability is growing in FuelsMarketNews.com

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PHOTO©IÑIGO FDZ DE PINEDO/GETTY IMAGES

importance, but many RFPs still go to the lowest responsible bidder. Explore fuels that allow you to reduce your emissions and be more competitive with price. This means not just what you pay per gallon but also whether you need to upgrade your trucks to run on it, make changes to fueling infrastructure, search hard for supply and other issues. Maintenance can also be a factor. On top of all that, you may be able to take advantage of incentives like the federal Biodiesel Tax Credit. 4. DON’T BE AFRAID TO USE MULTIPLE FUELS TO ACHIEVE YOUR GOALS. There is no silver bullet solution when it comes to which fuel a fleet should use. For example, a fleet in the Midwest might use higher biodiesel blends. A national fleet might buy a renewable diesel and biodiesel blend for its West Coast operations (because it is more widely available there) but primarily use biodiesel blends elsewhere and test out a handful of electric or compressed natural gas (CNG) trucks. The point is, an integrated energy management approach is worth considering—and a good fuel partner can help you determine the right solution and explain the advantages of it in your bids. Speaking of finding the right mix, let’s dive into the most common and sustainable options, including their carbon intensity (CI) scores from the California Air Resources Board (CARB).* This “well to wheels” approach considers direct effects like fuel production and usage and indirect effects like land use. The lower the score, the better. For comparison, petroleum diesel’s score is 100.5. Electric Electric trucks are still in the early stages of development. While it is possible to convert an existing vehicle, switching to electric almost always involves buying a new vehicle. Charging infrastructure is also required, which is currently seen as the main barrier to adoption, particularly in trucking. FuelsMarketNews.com

Fully electric vehicles do not generate tailpipe emissions. With any fuel, however, it’s important to also consider the full life cycle: What goes into its production, delivery and end use? CARB’s standard value for electricity from the California grid is 82.9. Compressed Natural Gas Natural gas is a fossil fuel comprised primarily of methane. In transportation, CNG is produced by compressing the gas to less than 1% of its volume at standard atmospheric pressure. It can also be used in a liquid form, known as liquefied natural gas. Fleets would need to either convert vehicles to run on CNG or buy new vehicles. Fueling occurs with specialized equipment and, as with electric vehicles, fleets with their own fueling locations would have to install new infrastructure. CARB gives fossil-based CNG a CI score of 79.2.

If you’re waiting for electric vehicles before getting on board with sustainability, you’re losing time and money.

Biodiesel Biodiesel is made from renewable resources, including used cooking oil, waste animal fats and vegetable oils. Fleets can run on biodiesel blends without making changes to vehicles or fueling infrastructure. Some fleets have even started running on 100% biodiesel with a simple, affordable modification to their trucks. Compared with ultra-low sulfur diesel (ULSD), biodiesel has higher cetane, leading to more complete combustion, and more lubricity, which reduces wear and damage to fuel pumps and injectors. Also, its cleaner burn sends less particulate matter to diesel particulate filters, minimizing the impact on those emissions control devices. Among liquid fuels, biodiesel has repeatedly received the lowest CI score from CARB. Its average CI score as of October 29, 2021, the most recent available, is 28.5. Renewable Diesel Renewable diesel is made from the same feedstocks as biodiesel, but the FMN Magazine SPRING 2022 | 21

COMMERCIAL FUELS

Blend of Biodiesel and Renewable Diesel Traditionally, biodiesel has been blended with petroleum diesel, and renewable diesel has been used by itself. But biodiesel and renewable diesel can also be combined to give users the benefits of each fuel. No equipment changes are necessary. Blending renewable diesel and biodiesel results in a fuel that is stronger than the individual components. The concept is similar to alloys, in which different metals are combined to make the end product better than the beginning materials. Biodiesel is more effective than renewable diesel at reducing several key pollutants, including particulate matter, carbon monoxide and total 22 | FMN Magazine SPRING 2022

hydrocarbons. Renewable diesel, meanwhile, generates greater reductions of NOx. Blending them together results in a fuel with significantly lower emissions than petroleum diesel. CARB has not assigned a CI score to the blend yet; but using the same methodology, Renewable Energy Group has calculated that an 80/20 blend of our best-in-class renewable diesel and biodiesel would have a CI score of 17.6. Ultimately, what’s best for a fleet depends on its unique circumstances. *CARB CI score information (https://bit. ly/3o1zR5T); quarterly reporting tool (https://bit.ly/3AzXQOI)

Steve Klein is senior manager, marketing, at Renewable Energy Group Inc. REG is North America’s largest producer of biodiesel and an industry leading producer of renewable diesel. He can be reached at steve.klein@regi.com.

FuelsMarketNews.com

PHOTO©BIM/GETTY IMAGES

There is no silver bullet solution when it comes to which fuel a fleet should use.

feedstocks are reacted with hydrogen during the production process. It can be used in most diesel engines without any modifications. Like biodiesel, it has higher cetane than petroleum diesel and lower sulfur content and aromatics. Its Cloud Point, which is the temperature at which a fuel appears cloudy, is lower than biodiesel’s. Renewable diesel is often right behind biodiesel in CARB’s CI scores. Its current average score is 38.7.

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How Much Is Too Much? Why quarterly driver safety-related activities might be more effective than monthly training. BY MARK MURRELL

hat’s a question I never thought I’d be considering, but it turns out that there is such a thing as too much driver training. With a business that provides driver training, I acknowledge that it seems odd for me to be saying that. But there is a point at which assigning too much training ultimately loses its effectiveness. The “too much training” situation normally comes up when fleets are 24 | FMN Magazine SPRING 2022

doing monthly training assignments for drivers. They assign some block of training every month, and drivers need to complete it by month’s end. Assigning safety training for drivers every month without fail is counterproductive. It isn’t an effective strategy for improving driver knowledge, fleet safety or workplace culture. Here’s why: You can’t just drop content onto people and be done with it. You need to take time to review what

happens after that content goes out, adjust the plans, work on any lingering gaps and get drivers involved. To maximize the effectiveness of training, it’s important to watch the effect over time and make decisions based on those effects. Maybe the training worked beautifully and solved a problem, maybe it didn’t do much at all. If new things just keep getting assigned every month, there won’t be time to see if the training is actually working. On top of that, not everyone develops at the same pace. There are some people who may love having something new to learn every month, but refreshing their memory of existing regulations and best practices isn’t really going to fit the bill for that. Other people need more time to assimilate new knowledge and skills, so bombarding them with FuelsMarketNews.com

PHOTO©SMEDEREVAC/GETTYIMAGES

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monthly assignments robs them of that opportunity. Of course, with drivers having different experience and skill levels, it’s also unlikely that they’re all going to need exactly the same content every month. Finally, if it’s something that happens every month, it becomes a chore. There’s no way that people are going to find every monthly assignment timely and valuable, so it will just become one more thing they “have to do” at work. A BETTER APPROACH So, what should you do instead? How do you structure an ongoing safety improvement program that shows results, is more dynamic and is still manageable to develop and deliver? First, think of it in terms of a monthly activity instead of monthly training. Training is one of the elements, but there are other activities that can be incorporated to support that training that are just as effective. Start with a quarterly cycle of monthly activities centered around a specific topic area, perhaps structured like this: • Month 1 – training assignment in the topic area (traditional online course, 20-30 minutes required to complete) • Month 2 – survey collecting feedback from drivers on their work experiences related to the topic (e.g., real-world examples of it, stories from the road) • Month 3 – create custom content related to the topic, such as a video reviewing the information covered in the training assignment or a recap of the feedback gathered from Month 2. That’s just one example, but there are many variations available. There might be some live events in a FuelsMarketNews.com

particular month, or maybe someone finds a YouTube video that relates to the subject. Or drivers could be asked to post related pictures on Facebook for a contest. What matters is that the monthly activities incorporate content specific to the company, and that drivers have a chance to participate rather than just being told to complete something. TRAINING THAT STICKS By combining those elements, a more engaging program is created, the workforce becomes more invested in it, and the content gets ingrained more deeply into the minds and work habits of the participants. You want training to “stick.” By running it on a quarterly schedule, the pace of activities gives people time to think about the content and adjust their daily habits accordingly. There’s also more time to watch the results of those efforts in the field and adjust future plans as necessary. Note that there’s still monthly engagement with drivers. The practice of assigning new training every month may have stopped, but there’s still interaction with drivers, and the topic of the quarter gets a deeper focus. There’s also a better story when an audit or court case happens—not only is the fleet regularly training its drivers but it is also involving them in that process more actively and evolving the program to respond to industry and workplace changes. Since a more engaged workforce is less likely to leave, turnover can improve as well, making the story even better. Better engagement with drivers, better turnover numbers and a better story for auditors—those are things you can’t have too much of.

Assigning safety training for drivers every month without fail is counterproductive. It isn’t an effective strategy for improving driver knowledge, fleet safety or workplace culture.

Mark Murrell is co-founder of CarriersEdge, a leading provider of online driver training for the trucking industry, and co-creator of Best Fleets to Drive For, an annual evaluation of the best workplaces in the North American trucking industry produced in partnership with the Truckload Carriers Association. He can be reached at www.carriersedge.com.

FMN Magazine SPRING 2022 | 25

FUEL MARKETERS

Another Look at Canceling Corrosion Last issue we examined retail storage tanks; this issue we cover the fuel delivery process. BY KEITH REID

e started a review of best practices to preserve diesel fuel quality in the winter 2022 issue of Fuels Market News Magazine. The article, “Canceling Corrosion,” served as part one of an overview of why diesel fuel quality is so important today. It shared some of the recommendations from the Fuels Institute best practices’ report “Diesel Storage Tanks: Industry Practices to 26 | FMN Magazine SPRING 2022

Minimize Degradation and Improve Fuel Quality” aimed at retailers and their fuel storage and dispensing infrastructure. In this second part, we provide an overview of the Fuels Institute report “Diesel Fuel Loading and Delivery: Industry Practices to Minimize Degradation and Improve Fuel Quality” aimed at marketers/ wholesalers and reducing contamination concerns between the loading rack

and the retail tank. To summarize the concern, modern Tier 4 high-efficiency diesel engines using high-pressure rail systems are far more demanding and susceptible to damage when it comes to particulate and water contamination. It is important to reduce concerns such as the co-mingling of diesel fuel with other products (such as gasoline) or introducing water into the fuel delivery process. These best practices will help preserve the quality of diesel fuel as part of the routine procedures involved with loading and unloading by tanker and tank truck drivers. TERMINAL LOADING AND TRANSPORT As “Diesel Fuel Loading and Delivery” notes, unless a dedicated tanker or dedicated compartment is used to transport diesel fuel from a terminal to a storage tank, there is a chance the FuelsMarketNews.com

FUEL MARKETERS

PHOTO©ALYNST/GETTY IMAGES

diesel fuel can become contaminated with other products. Therefore, an initial recommendation is to use dedicated tank compartments (with split loading) or dedicated tank trailers for each fuel product. That is often not feasible except in operations where there are sufficient volumes in the individual products to make it worthwhile. Where more operational flexibility is required, and tanks and compartments must haul varied products like gasoline, they should be as empty as possible and then filled to the maximum capacity with diesel to prevent the retention of gasoline vapors. A note on split loading: Efforts should be made to minimize the possibility of accidental cross-contamination when dedicated compartments are involved. Also, it’s useful to load the diesel compartment first then the gasoline compartment(s) to avoid gasoline vapor back flowing into the diesel tank. DIESEL FUEL DELIVERY As “Diesel Fuel Loading and Delivery” notes: When unloading diesel fuel into a storage tank, ensure that water is not introducedintothestoragetankandthat the wrong product (such as gasoline), residual product in the tanker manifold or delivery hose is not accidentally introduced into the diesel tank. It may seem like common sense, but pay extra attention during the delivery fire process to verify that the storage tank to receive the diesel fuel is in fact the diesel storage tank. This starts with the appropriate API color code and product tag or label. If this is unclear, verify the appropriate tank with site personnel. Next, position the tanker to ensure proper drainage. Make sure it is on a level surface to promote complete drainage from the compartment. If the delivery is a split load, unload the diesel fuel first. As the Fuels Institute report notes, diesel fuel storage tanks typically do not have a vapor recovery connection, so unloading diesel first will keep recovered gasoline or other FuelsMarketNews.com

products vapors from being pushed into a compartment containing diesel fuel. Check for water and/or other debris around the fill pipe and take actions to ensure that these contaminants do not enter the tank. Verify the capacity of the storage tank and the product level inside the tank, and check the tank for water with an appropriate sensor system or stick with water-finding paste. If problems or discrepancies are identified, consult site personnel on how to proceed. And, of course, do not overfill the storage tank. Verify that the compartment is empty after delivery and confirm the volume of diesel fuel delivered to the storage tank. If the volumes do not match, +/-1%, residual product may remain in the compartment. OTHER ISSUES TO CONSIDER It is important to be aware of the same considerations when delivering product to a marketer/wholesaler’s bulk plant. These can involve both underground storage tanks (UST) and aboveground storage tanks (AST). As is the case with the retail delivery, it’s important to check product delivery levels and check for the presence of water. If contamination occurs, it’s important for it to be the “other parties’ fault.” Therefore, it’s imperative that the fuel delivery process be as button-down as possible to minimize the possibility of the wholesaler or common carrier being the source of potential contamination. In many cases, these best practices are in fact common practices; however, care should be taken to ensure that drivers are consistent and reliable with each load delivered. This article provides an overview of the best practices to consider with the delivery process. The 14-page “Diesel Fuel Loading and Delivery: Industry Practices to Minimize Degradation and Improve Fuel Quality” report provides significant additional detail on how to implement the best practices and is available free from the Fuels Institute at www.fuelsinstitute.org.

Where more operational flexibility is required, and tanks and compartments must haul varied products like gasoline, they should be as empty as possible and then filled to the maximum capacity with diesel to prevent the retention of gasoline vapors.

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

FMN Magazine SPRING 2022 | 27

FUEL MARKETERS

Net-Zero Heating Fuels by 2050 NEFI works to ensure heating fuels have a place in a low-tono-carbon future. BY MAURA KELLER

ast year, hundreds of industry professionals ratified a pledge to reduce emissions by 40% by 2030 and deliver a net-zero liquid heating fuel to consumers by 2050 at a NEFI-sponsored heating oil summit in Rhode Island. The Providence Resolution aims to facilitate the industry’s transition to low carbon, renewable liquid heating fuels. The National Energy & Fuels Institute works to promote government policies and industry initiatives to support the use of environmentally sound advanced biofuels in the home energy market. Sean Cota, NEFI’s president and CEO, said that market forces and 28 | FMN Magazine SPRING 2022

climate-driven policy changes encouraging greenhouse gas (GHG) emissions reductions in the past few decades have resulted in conversion of many Northeastern home heating systems from conventional fuel-based systems (heating oil/propane) to utility-provided systems (gas/electricity). “Currently, state and federal government policy is driving most of the changes, and largely without regard to critical scientific or economic analysis of the energy economy,” Cota said. “Heating fuels are at threat in a much more immediate term as it is easier to connect heating and cooling to the electric grid compared to motor fuels.

Motor fuels will have much more time to adapt and influence changes.” The ratification of the Providence Resolution was a commitment by the liquid heating fuel industry to remain competitive in the home heating market and position itself as a leader in combating climate change. Specifically, the resolution aims to establish a variety of systems to accomplish CO2/GHG emissions reductions. “Efficiency has already significantly reduced heating fuel emissions since the 1990 Kyoto/Paris Climate accords,” Cota said. “There will be variety of renewable liquid heating fuels and technology by 2050. They will include biodiesel, thermal heat pump technologies and a variety of cellulosic fuels that are already undergoing testing. Currently, plans are being carried out to ensure we educate lawmakers, effect legislative issues, stand up for the needs of our customers and follow the path forward for the further development of higher biofuel blends.” Industry experts agree that pressure around the world is building to reduce carbon emissions from all sources. On FuelsMarketNews.com

PHOTO© RAYMOND C. EICHELBERGER/SHUTTERSTOCK

FUEL MARKETERS

the electric side, many facilities are now incorporating renewable power solutions as part of their base, in addition to moving away from fuels with higher carbon intensity. The liquid fuels industry is also feeling pressure to reduce carbon emissions in all liquid fuels. “From aviation fuels to heating oil and diesel, these fuels are now being augmented with renewable fuels as part of the base fuel,” said Michael McAdams, president of the Advanced Biofuels Association (ABFA), which has partnered with NEFI to promote government policies and industry initiatives to support the use of environmentally sound advanced biofuels in the home energy market. “In many instances we see renewable diesel and biodiesel becoming a significant portion of the overall gallon. As we move forward, in the future legislative and regulatory pressure at both the state and federal levels are very likely to require more and more volume from lower carbon-based liquid fuels of all types.” McAdams said the ABFA and NEFI share a vision for a low-carbon future for the liquid fuels industry that is critical to both American competitiveness and environmental security. “I am optimistic that between the new technologies coming on line and the focus on reducing carbon around the world, that we will see significant volume growth over the next three decades,” McAdams said. “If the federal government adopts the right policies in Washington, this conversion could be enhanced more quickly, and the conversation will lead to a great deal more volume at affordable prices for all consumers—a victory for the environment and the people of the world.” Barry Knox, director of blended fuel sales at Renewable Energy Group (REG), said the environmental regulation is a major driver for transitioning to a low-carbon/zero-emission future. “Federal and state legislation has also driven greenhouse gas emissions goals and initiatives to take environmental FuelsMarketNews.com

responsibility,” he said. “The motor fuel industry is under pressure as well, and that’s why it’s important to meet the growing global demand for low-carbon energy sources. The biodiesel industry is here and poised to lead the way to a more sustainable future.” THE PLAN A comprehensive, targeted and factbased communications strategy was developed by NEFI to detail the timeline, approach, methods and messaging required for the industry to achieve net-zero carbon by 2050, as well as intermediary goals by 2030. As Cota explained, the messaging content drives a strong educational campaign about bioheat renewable liquid heating fuels that address concerns about fiscal feasibility, misconceptions about technical compatibility and environmental benefits, and a dearth of grassroots support to encourage renewable fuels as part of the solution. The nature of the grid and geography will require fossil fuels for decades. REG expects wider adoption of integrated energy management by 2050, which means incorporating many forms of renewable energy in ways that make the most sense. For example, this can mean solar and wind energy fueling the energy grid, electric vehicles for passenger vehicles, and biodiesel and renewable diesel used in long-haul trucking, rail and marine. “For heating, we believe the best and most cost-effective low-carbon option is biodiesel, which is available now to make this important transition even sooner than 2050,” Knox said.

The ratification of the Providence Resolution was a commitment by the liquid heating fuel industry to remain competitive in the home heating market and position itself as a leader in combating climate change.

ELECTRIFICATION AND HEATING FUELS Rob Underwood, president of the Energy Marketers of America (EMA), said the question that the industry needs to focus on is how fast will electrification hit the public and can liquid fuels be the solution to lowering America’s carbon footprint in a cost-effective way? There are a number of government policies in the works FMN Magazine SPRING 2022 | 29

FUEL MARKETERS

aimed at getting rid of gasoline and diesel vehicles, as well as oil-fired boilers and furnaces. “It doesn’t matter what these policies are called, the desired effect is that they will cumulatively make it too hard and too expensive to own any vehicle or appliance that isn’t electric,” Underwood said. Unfortunately, many of the core markets for heating oil have a direct overlap with states leading the charge for electrification. As Underwood pointed out, these states also have severe and cold weather in the winter, and that is why heating oil has been the best choice for those consumers. “Heat pumps are often advertised as being 300 or 400% efficient. However, that is at 55 degrees. When it gets cold, the efficiency falls. Additionally, solar panels will contribute very little to the electrical grid in the winter—the days are short, the angle of the sun is low, and it may be cloudy or snowy on a winter day,” Underwood said. “So, on those days when it is really cold, the heat pumps won’t be working efficiently, and keeping homes warm will put a real strain on the electrical grid. 30 | FMN Magazine SPRING 2022

Texas was hammered last winter when the grid went into collapse—pipes bursting, people freezing and no water for sanitation. If this were to happen to a state in the Northeast, you could have a man-made disaster like we have never seen before.” Underwood said government EV and electric heat pump mandates risk forcing a transition too quickly, hurting families. If government pushes electrification adoption too quickly, affordable public charging and heating infrastructure may not yet be available to consumers where it is needed.

to a low-carbon future,” Cota said. “We know we have the answer to reducing GHG. We know it works. We know we can make it better moving forward. We understand that our industry was seen as part of the GHG problem. But, over the last few generations we have worked hard to ensure that not only do we provide the necessary solutions to ensure the health and welfare of our country, but we also ensure the longevity of the mostly family-owned, generational businesses that make up our industry.”

LOOKING AHEAD There is more at stake today on the fuels front than altruistic environmentalism, or even forced compliance with legislative fiat. The heating fuels industry is made up of people working in businesses that have served their communities often for many decades and that feel they still have a role in meeting customer needs for more decades to come. “Our hope is that we are included in legislation that lays out the infrastructure needed to move our country

Maura Keller is an award-winning freelance writer, editor, book author and proofreader with over 22 years of experience, including significant content in the downstream petroleum and convenience store industries.

FuelsMarketNews.com

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REG expects wider adoption of integrated energy management by 2050, which means incorporating many forms of renewable energy in ways that make the most sense.

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The ability to run on a broad range of biodiesel can offer some surprising environmental efficiency benefits.

L FLEXIBI

ulti-fuel diesel engines, those that can run on a range of different fuels, offer an environmentally friendly alternative to single-fuel diesel engines. They also offer options to the user, allowing them to select the most economic fuel that is available at a given time. Further, it allows flexibility, especially for military applications, where the vehicles can use available fuels rather than shipping in specialty fuels. As such, it has become critical to develop engines that are flexible with regard to fuels. Multi-fuel engines are defined as engines that are used with different kinds of fuels simultaneously and can operate without changing any of the operating parameters. The bulk of gasoline engines in the United States are multi-fuel in that they allow gasoline, ethanol and blends of the two. However, diesel engines for passenger, commercial and military applications are typically limited to diesel fuel with up to 20% biodiesel blend. Research on multi-fuel engines has been done over the course of many years, but they have been gaining more interest now due to the introduction of new laws and regulations related to emissions and the efficiency of engines. It is important for new engines to be more versatile to comply with these regulations, and multi-fuel engines allow for the use of “greener” fuels. Moreover, certain fuels may be better for idling, while others would be better for operating at peak performance; multi-fuel engines would allow an engine to rapidly switch to the optimal fuel.

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FuelsMarketNews.com

L T I IY FuelsMarketNews.com

FOR DIESEL ENGINES By Dr. Raj Shah, Karandeep Singh and Dr. Vikram Mittal

FMN Magazine SPRING 2022 | 33

34 | FMN Magazine SPRING 2022

EFFICIENCY OF FUEL BLENDS Another paper by Murugupoopathi et al, “Energy and Exergy Analysis on Variable Compression Ratio Multi-Fuel Engine,” published in the Journal of Thermal Analysis & Calorimetry, focused on the energy output of the fuel blends from the previous study. A clear difference can be seen between each of the blends. The blends with 20% and 40% biodiesel in them are more efficient because the energy consumed is much less than normal diesel and the other biodiesel blends. Even this research, which only focused on a narrow range of different fuel types, shows the viability of multi-fuel engines. These alternative fuel blends have the possibility of being better than traditional diesel blends. A research paper by Carlo Beatrice, “Impact of RME and GTL Fuel on Combustion and Emissions of ‘Torque-Controlled’ Diesel Automotive Engines” published in the SAE International Journal of Fuels and Lubricants, discusses different FuelsMarketNews.com

PREVIOUS SPREAD: PHOTO©ARTEM_EGOROV/GETTY IMAGES

Multi-fuel engines have an additional benefit for military applications as they can operate on any available fuel. Rather than shipping specialized fuel around the world for use in their vehicles, troops could just buy whatever fuel is available off the local economy. Alternatively, military units could locally produce biodiesel from readily available organic material at forward deployed locations. In doing so, they avoid fuel convoys, which have historically been a large vulnerability for military operations. Fuel flexibility for an engine does not only depend on whether an engine can use a fuel but also how well it uses that fuel. There are many different factors that must be considered, including fuel consumption, combustion pressure, ignition delay, and the emission of carbon dioxide, carbon monoxide and nitrogen oxides as covered in “Energy and Exergy Analysis on Variable Compression Ratio Multi-Fuel Engine” (Murugapoopathi, S., and D. Vasudevan) and published in the Journal of Thermal Analysis & Calorimetry. As the study noted, not all fuels will give consistently good results for each of these factors, and some may have certain favorable qualities, such as lower flash points and higher fuel efficiency, while others do not. A multi-fuel engine should be able to work with multiple fuels as well as different combinations of these fuels. Murugapoopathi et al. conducted many experiments on how engines can run on different combinations of biodiesel and diesel fuels. The

group recorded different properties of various fuel blends including B20, B40, B60, B80 and B100. The number indicator in the fuel blend corresponds to the volumetric percentage of biodiesel in the blend. The data show that adding biodiesel improves some properties, such as the viscosity, but makes other properties, such as the flash point, worse. The flash point in particular is important since a higher flash point would make it harder to start the engine. The research indicates that different fuel blends have different factors which vary with the amount of biodiesel; in turn this affects the practicality of the engine. There is significant variation among the fuel blends, and numerous tests are required to find the optimal blend. When it comes to the thermal efficiency of the specific fuel blend, the ideal ratio was found to be 20% biodiesel to 80% diesel, although 40% biodiesel was also adequate. Regarding CO2 emissions, the regular diesel released less CO2, but since the biodiesel blends had a higher viscosity, the engine was more fuel efficient than with only diesel. This higher fuel efficiency meant that the biodiesel blends had less emissions overall because the engines required less fuel for the same amount of time. As such, incorporating the right biodiesel blend could allow for a reduction in fuel consumption for passenger, commercial and military applications.

PHOTO©ANUSORN NAKDEE/GETTY IMAGES

alternative fuels, including biodiesel and their potential applications. Beatrice found that biodiesel serves as a better alternative to diesel when used in multi-fuel engines because in general, biodiesel produces less emissions when used by itself or even when mixed with diesel (Beatrice 9). The use of biodiesel allows the user to interchange between different fuels and minimize the amount of emissions, which would more closely follow environmental guidelines. EXPERIMENTAL ENGINE General Aviation created an experimental multifuel diesel engine that surpassed the single-fuel engines used in aircraft as outlined in “The MultiFuel General Aviation Piston Engine” (Gonzalez, Cesar and Richard L. Jesik), published in SAE Transactions. The experimental engine burned the fuel with the same efficiency as aviation gasoline engines, while avoiding the shortcomings of aviation diesel engines, including emissions and efficiency issues. This experimental engine is proof that multi-fuel engines have the capability not just to match performance, but to even surpass engines that are currently on the market. This would obviously greatly benefit users since multi-fuel engines would be able to both decrease costs and increase the performance of all of their vehicles. Since the experimental engine was made for aerial vehicles, the findings can be applied not only to engines for vehicles on land but even to more complex and larger engines needed for aircrafts. While multi-fuel engines should have the capability to run different types of commercial fuels and maintain good performance, they should also be able to perform well with alternative fuels. One such alternative that has been researched as an alternative to diesel is vegetable oil. In “Vegetable Oil or Diesel Fuel—A Flexible Option,” published in SAE Transactions, Kenneth J Suda and his team tested the viability of vegetable oils in a modified, experimental engine and compared it to the performance of diesel fuel in a typical engine and in a modified engine. Suda found that running the engine with vegetable oils was more difficult since they contain a lower amount of energy and are more viscous than diesel. However, when used with the modified settings, they produced less emissions and almost as much energy as the diesel in the typical engine. FuelsMarketNews.com

The findings of this research showed that specific diesel and vegetable oils compositions, in this case specifically made from soybeans, and diesel

The amount of carbon dioxide emissions produced are so little that they can be counterbalanced by the plants used to make the biofuel, which is a great option in terms of environmental sustainability and reducing overall carbon dioxide emissions. fuels could be interchangeable and lead to a small energy difference only if no settings in the engine are changed. The emissions were about the same as well. Even though the emissions and performance of the blends and pure diesel are about the same, the use of the blends will decrease cost. ALTERNATIVE FUEL BLENDS The study “Investigation on Performance and Emission Characteristics of a Variable Compression Multi-Fuel Engine Fueled With Karanja Biodiesel–Diesel Blend” (Sivaramakrishnan, K.), published in the Egyptian Journal of Petroleum, researched the usefulness of alternative fuel blends using Karanja oil. His research goes in-depth into the emissions of these alternative fuel blends specifically and how they’d be beneficial to the environment. In this study, multiple alternative fuel blends were made with differing amounts of Karanja oil and diesel. These different blends were B20, B25 and B30, which are 20%, 25% and 30% Karanja oil blended with diesel. FMN Magazine SPRING 2022 | 35

DUEL-FUEL ENGINES Dual-fuel engines are a final type of engine that could be considered as outlined by Jacob Klimstra in “Fuel Flexibility With Dual-Fuel Engines,” which could be incorporated into future multifuel engines. Dual-fuel engines can use both liquid and gaseous fuels, which include, but are not limited to, natural gases. Multi-fuel engines could be capable not only of using different liquid fuel blends but also gaseous fuels and different blends of those as well, allowing for increased fuel flexibility. These different fuel types would not have to be used independently and could be used interchangeably or even together, depending on which variation would be more efficient. However, gaseous fuels themselves could not be used alone but would require a little liquid fuel, less than 1% of the total fuel amount, to start up. In conclusion, the potential of multi-fuel engines and the fuel flexibility they could provide is almost limitless. Fuel blends can be optimized to meet a variety of needs when it comes to greener engines and less emissions or higher performance and 36 | FMN Magazine SPRING 2022

higher power output. Specialized blends could be made, and since the engines would be able to use multiple types of fuels, it would reduce costs. Multi-fuel engines have a long way until they are fully optimized, but the experimental engines and prototype engines that can use different blends now are a step in the right direction.

Dr. Raj Shah is a director at Koehler Instrument Company in New York. He is an elected Fellow by his peers at NLGI, STLE, InstMC, RSC, CMI, AIC, IChemE, Institute of Physics and the Energy Institute. He holds a Ph.D in chemical engineering from The Penn State University and is a deemed esteemed engineer title holder from Tau beta Pi. An adjunct professor in the Department of Material Science and Chemical Engineering at State University of New York, Stony Brook, Dr. Shah has over 450 publications and has been active in the petroleum industry for three decades. Dr. Vikram Mittal is assistant professor at the United States Military Academy in the Department of Systems Engineering. He earned his doctorate in mechanical engineering at the Massachusetts Institute of Technology, where he researched the relevancy of the octane number in modern engines. His current research interests include system design, alternative fuels, model-based systems engineering and engine knock, and he is considered a worldwide expert on innovative fuel technologies. Karandeep Singh is a student of chemical engineering at SUNY, Stony Brook University, where Drs Mittal and Shah are part of the external advisory board of directors. Singh is currently an integral part of the thriving internship program at Koehler Instrument Company.

FuelsMarketNews.com

PHOTO©ANUSORN NAKDEE/GETTY IMAGES

Unburned hydrocarbons are an emission produced by burning fuels in which the fuel has only partially been used up. From the Sivaramakrishnan study, the fact that at each compression ratio, the alternative fuel blends release less hydrocarbons—about a third of what diesel releases—means that the fuel blends are more efficient and actually use up most of the fuel instead of just releasing and wasting it. Even if they did not produce as much overall energy, they would not be wasting as much, either, which would be better for the environment. Additionally, the level of carbon dioxide emissions of each of the alternative fuel blends is lower than that of diesel. The amount of carbon dioxide emissions produced are so little that they can be counterbalanced by the plants used to make the biofuel, which is a great option in terms of environmental sustainability and reducing overall carbon dioxide emissions. The increase in fuel efficiency would also help a user save money and get more use out of the fuels used. In the future, if research warrants, different blends might be made with multiple types of mainstream fuels and sustainable, alternative fuels, which could be optimized to get blends with maximum efficiency and minimized emissions.

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IN The Lead

How Pilot Company moves billions of gallons of fuel and still maximizes the customer experience.

By Keith Reid

JOE BUTLER

SENIOR DIRECTOR OF FUEL SUPPLY

ilot Company keeps North America’s drivers moving as one of the leading suppliers of fuel and the largest operator of travel centers. Founded in 1958 and headquartered in Knoxville, Tennessee, Pilot Company supplies more than 11 billion gallons of fuel per year and has an industry-leading network of more than 950 retail and fueling locations that offer a variety of products, amenities and innovative solutions to make road travel easier. The Pilot Flying J travel center network includes locations in 44 states and six Canadian provinces with more than 680 restaurants, 74,000 truck parking spaces, 5,300 deluxe showers, 6,200 diesel lanes and 35 Truck Care service centers. The One9 Fuel Network provides fleets and professional drivers with more places to stop at a variety of fueling locations. Pilot Company’s energy division supplies fuel, DEF, bio and renewables and provides hauling and

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FuelsMarketNews.com

FMN Magazine SPRING 2022 | 39

disposal services as the third-largest tanker fleet in North America. Pilot Company is ranked No. 10 on Forbes’ list of America’s Largest Private Companies. Joe Butler is a senior director of fuel supply for the Midcontinent, Gulf Coast and East markets and manages four regional teams. Butler reports to the vice president of fuel supply, Ted Brennan. Butler and Brennan buy all of the fuel that goes into the operation’s retail stores, as well as for its wholesale marketing demand. HOW CHALLENGING IS IT TO MANAGE THE VOLUMES THAT YOU SEE IN YOUR OPERATION? Butler: We operate nearly a thousand locations across North America and provide about 20 million gallons of gasoline, diesel and DEF daily to our guests and customers. In terms of managing that challenge, over the years we’ve developed an energy team of about a hundred individuals here in Knoxville and

about a hundred traders and supply specialists in Houston. We’ve got hundreds of years of collective experience weathering the different challenges that come our way. I would call us experts in fuel supply to our retail locations, and really our commitment to our customers is to provide quality fuel and amenities at a competitive price and do what it takes to continue their journeys. Supply chains are challenged globally for just about everything, and consumers see that whenever they see empty shelves. The challenges are exacerbated due to labor shortages for retail staff and drivers. Fuel supply chains are more strained than ever, and any event like a storm or the Colonial Pipeline hack in 2021 create disruptions that are felt longer and worse than in the past. HOW DO YOU MANAGE SUPPLY AND RISK MANAGEMENT? Market volatility demands we focus on security of supply through owning our own inventory and

We haul the majority of our loads on our trucks. We work to differentiate a driving experience with Pilot from anyone else. having great contract relationships with suppliers. Hedging our own inventory helps to create a greater sense of stability and security in the markets we operate. WHAT’S THE RELATIONSHIP BETWEEN THE GASOLINE CUSTOMER AND THE DIESEL CUSTOMER IN YOUR OPERATIONS? We sell about 7 billion gallons a year of diesel and probably 1 billion of gasoline. Obviously, we believe that truckers make America move. Practically everything has touched a truck at some point in its life cycle. I would say that because of our truck stop operation catering to a trucking guest—the amenities of a full-scale restaurant, 24/7 amenities, 24/7 lighting—those kinds of things end up benefiting the gasoline customer that decides, ‘I’m going to be driving all night long. Am I going to be able to find places to stop? Am I going to be able to find a place 40 | FMN Magazine SPRING 2022

FuelsMarketNews.com

that has a clean restroom? Maybe a hot sandwich or a slice of pizza?’ Those are the kinds of things that they’re going to get at a Pilot, 24/7/365. DO YOU GET ANY GASOLINE CAR CUSTOMERS THAT TAKE ADVANTAGE OF THE BROADER AMENITIES LIKE SHOWERS AND OVERNIGHT? Absolutely. We see it more with the Penske or U-Haul customer—someone that is traveling across the country. When I first joined Flying J back in 2007 after working for Exxon and Shell in Houston, I had to move to Ogden, Utah. It was a long drive that I had to make with a U-Haul, and I decided to have my customers’ experience. I wanted to understand what a guest would experience when they stop at a Flying J. And so I stopped, got a shower and had the full experience. I’m happy to say that you feel like you would want to feel in your home shower. They clean them after every use. The towels are fresh, and there’s a fresh bar of soap. HOW IS PILOT APPROACHING ALTERNATIVE ENERGIES AND ANY POSSIBLE ENERGY TRANSITIONS DOWN THE ROAD? Pilot’s one of the largest over-the-road distributors of renewable fuels. In addition to ethanol, biodiesel and renewable diesel, Pilot is one of the largest producers, retailers and distributors of diesel exhaust fluid. Essentially every one of our diesel dispensers has the option to fill in bulk with DEF. When we talk about legislation, Pilot is very much pro having a plan. But what we’ve seen in some of the current legislation is more of an end game, as opposed to a true plan that would see decarbonization over several phases. FuelsMarketNews.com

Fuel supply chains are more strained than ever, and any event like a storm or the Colonial Pipeline hack in 2021 creates disruptions that are felt longer and worse than in the past. Pilot is agnostic to the fuel that our customers need. We are committed to providing best-in-class hospitality and amenities to our guests. But as far as what they need from a fuel perspective—be it electrons, hydrogen, diesel, gasoline—we’re going to be there for them. Several of our large customers approached us in 2012 to say, ‘the spread between natural gas and diesel has blown way out. We need you to be able to give us a network of LNG across your network.’ And we said, OK, this looks like it is going to go forward. We found a partner and committed to a footprint at about 80 of our sites. WHAT ABOUT CNG AS A FLEET FUEL? We have some locations where we do CNG, and that is more of a hub-and-spoke kind of opportunity. Again, being fuel agnostic, if we had enough FMN Magazine SPRING 2022 | 41

of an interest in our customer base to have CNG and in markets where we have that kind of customer base—California, Texas—we have some CNG options but not much. HOW EASY IS IT TO FIND RENEWABLE SUPPLY? We’ve had several people in our Houston trading team that are dedicated to renewables for some time now—people that have a specialty in those players and relationships. They have brought a lot more gallons into our network than we would have otherwise without having that focus. Pilot also now owns an ethanol plant in Nebraska.

DO YOU DO YOUR OWN BLENDING AND RIN MANAGEMENT? We have blending operations in several of our locations but not across the board. There are some places where it doesn’t make sense from an investment perspective. It is just buying a blended B2 or B5 in Minnesota, Iowa, Oregon or Pennsylvania where you have a mandate, and it’s not really an economic incentive to try and diversify. HOW DO YOU KEEP AND ATTRACT DRIVERS NOW? It has been an incredibly challenging period over the past two years with the downturn in demand. A lot of the drivers were of an age where they 42 | FMN Magazine SPRING 2022

could retire and leave. We haul the majority of our loads on our trucks. We work to differentiate a driving experience with Pilot from anyone else. Our drivers are home every day. We offer great, competitive incentives including 401(k) and life insurance. We have six weeks of parental leave for both fathers and mothers, which is a big deal. We have industry-leading vacation and paid time off. We have hourly pay, which a lot of drivers like. We have free coffee and fountain drinks. Extra pay for night, weekend and holiday. Those kinds of things. I think the other thing in terms of our investments is our assets. We have a fleet where the average vehicle age is less than three years. So, they know they’re going to be driving good, clean, up-to-date safe technology. WHAT ROLE DOES TECHNOLOGY PLAY IN YOUR OPERATIONS? We’ve invested heavily in our upstream and downstream technology over the past several years to make it as transparent, easy and seamless for us in the central office as well as for our drivers. We have developed our own handheld mobile technology to communicate instructions with drivers to assist in BOL reconciliation. Then we work very, very closely with our suppliers, both rack and contract, to understand the right amount of transparency. Being able to aggregate supplier portals from a decision-making perspective to know what supply is available. Pilot is heavily investing in technology to deliver an outstanding experience to our guests. From high-speed Wi-Fi at our entire facility to use of the mobile app to map their routes, reserve a parking spot, or get pre-authorized to pump fuel to save them time, Pilot believes in creating a safe, fast, friendly and clean experience for our trucking guests. We are also launching an enhanced loyalty program for our gas and RV guests this year. HOW DOES PILOT APPROACH DIESEL QUALITY? We try to continuously monitor our tanks. We have systems that are constantly alerting in case there’s any kind of water ingress after a heavy rain or snow or whatever. Then we ensure that steps are taken to make sure that any problem is addressed. We have a contract with National Fuel Quality Group, a big operation, that helps us FuelsMarketNews.com

whenever we have issues. They do some routine maintenance as well as be on call if there’s a water intrusion. The other thing I would say is that we have strong connections and communication with our customers. When there is an issue, we can update our website and that will immediately flow through to them so that they know of the next three locations they can stop at. That gives them the transparency to make sure that they know when they pull off, fuel up and get what they need without any surprises. Keith Reid is editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb.com.

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What to consider when assessing underground storage tank risks, financial responsibility, insurance and life cycle.

UST LIABILIT

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FuelsMarketNews.com

By Linda Gelfand

TIES FuelsMarketNews.com

pills or leaks from petroleum product underground storage tanks (USTs) can contaminate soil and groundwater and migrate to surface waters or neighboring properties. They can also lead to thirdparty bodily injury and property damage and natural resource damage claims. Owners and operators must not only comply with regulations they also must manage their tanks and their finances to protect themselves against costly environmental cleanups, claims, maintenance and tank removal costs. The risk of a release varies based on the age of the tanks, construction of the tanks and associated systems, effectiveness of tank monitoring and maintenance, type of leak detection and other factors. One source of releases is the delivery of product into a storage tank, where the product delivery hose is connected to a fill pipe and pumped into the tank. Improper hose connections or leaving product in the hose following its disconnection can lead to spills. Spills can also occur when a tank is overfilled with more product than it can hold. In addition to spills from product delivery, leaks can occur from one or more areas of a storage tank system. Common areas where leaks can occur include underneath the dispenser island, from the spill bucket, from submersible pumps, along the piping that conveys the fuel from the tank to the dispenser, from UST system sumps and from the tank itself. For metal UST system components including piping or tanks, corrosion can occur over time, leading to holes and loss of product. Corrosion and installation issues have resulted in the highest cost releases in the past, according to the Association of State and Territorial Solid Waste Management Officials. FMN Magazine SPRING 2022 | 45

attractive quality of a fiberglass UST is its ability to resist corrosion.

Tank age is another significant risk factor. The longer storage tank systems are in use, the higher the risk for the tank, piping and other components to deteriorate and eventually have a leak.

FINANCIAL RESPONSIBILITY

UST regulations require petroleum UST owners to demonstrate financial responsibility. According to the EPA, the most-used financial assurance mechanisms are state funds and private insurance. Pollution liability insurance is the only financial assurance mechanism to provide legal defense costs. A storage tank policy can be used to cover losses specifically associated with UST systems. The losses include discovery of a leak from a tank or its associated piping, a leak migrating to an adjacent property, damage to natural resources, spills during loading and unloading, defense against third-party claims and costs associated with responding to an emergency where contamination is of imminent danger to human health or the environment. A storage tank policy cannot be used to cover the costs associated with tank removal and/or replacement or disposal of waste materials. It also does not cover costs associated with tanks that are not listed on the policy (e.g., discovery of a previous unknown tank). Furthermore, coverage is not provided for costs associated with any other releases from other sources, such as hydraulic lifts, oil/water separators, etc. 46 | FMN Magazine SPRING 2022

The longer storage tank systems are in use, the higher the risk for the tank, piping and other components to deteriorate and eventually have a leak. that may be present at locations where a UST may be operating. To cover the risks posed by these other sources, UST facilities may consider a premises pollution liability insurance policy. USTs must be individually scheduled on the policy. Most states require a certificate of financial responsibility for USTs, and a storage tank liability policy, or certain premises pollution liability policies, can satisfy that requirement.

INSURANCE POLICY SPECIFICATIONS

To satisfy financial responsibility requirements, insurance policies must have these provisions: • Separate defense limits with first dollar coverage FuelsMarketNews.com

s The most

• Six-month extended reporting period for claims-made coverage • Required wording on the endorsement or certificate of insurance, as indicated in the Code of Federal Regulations, 40 CFR 280.97(b)(1) and (2) • On-site and off-site cleanup and third-party claims for property damage and bodily injury • Cover both sudden and non-sudden releases • Cover releases from loading and unloading activities Storage tank insurance and premises pollution liability insurance policies are written on a claims-made basis, indicating that the loss must occur after the retroactive date and before the end of the policy period, and the claim must be made while the policy is in effect. The retroactive date is important for an insurance policyholder because no coverage will be provided for remediation expenses or thirdparty claims associated with contamination that existed prior to the policy’s effective or retroactive date. Ideally, the retroactive date would coincide with a UST’s date of original installation or equipment update; however, if any gap occurs in coverage or the site changes owners, the retroactive date will be reset to the inception date of the new policy. Other important insurance conditions that UST facility owners should be aware of that can impact their coverage include the following: • The definition for the terms “pollution condition” and “release” can be important to coverage. Many policies only cover remediation expenses for a confirmed release from a UST, where confirmed release means contamination that has been investigated and verified by, or on behalf of, an insured. The UST facility owner should be aware that tank tightness testing, site investigations or sampling may not be covered under the policy. Broader coverage would include language that covers suspected releases, including expenses to investigate and confirm a release has occurred. • Many policies have notification conditions that require the insured to notify the insurance company of any plans to perform a voluntary tank removal or replacement within a certain time frame prior to the removal or replacement. The insured typically must notify the carrier when they become aware of any contamination or incur an emergency expense that could give FuelsMarketNews.com

For many businesses, the cost to install new tanks is something they may not be prepared for, which is why it is important to start planning for tank replacement from the day your tanks are installed.

rise to a claim. Verbal notice may initially be given, but written notice must follow. If the policy claim notification provisions are not followed, a claim may be denied. • Some policies have exclusions for intentional noncompliance with environmental laws that result in a release. Failure to comply with environmental laws could lead to a denial of coverage. The burden is on the insured to demonstrate that the noncompliance was not intentional, according to EPA.

s Removal of an old underground gasoline storage tank from a gas station.

AGING TANKS CHALLENGE

Underground petroleum tanks are typically expected to have a life expectancy of 30 years, according to Yale Environmental Health & Safety. Aging tanks are a risk that owners and/ or operators must address. The longer they wait, FMN Magazine SPRING 2022 | 47

the chances of the tank leaking and the costs to maintain them increase. According to UCPM, a wholesale environmental insurance brokerage, most markets create financial barriers for tank owners and operators to avoid insuring older USTs. They can do this by only offering tank pollution liability coverage with higher minimum premiums and larger deductibles. Most carriers are leery of providing lower deductibles to older USTs because they have a higher likelihood of paying large cleanup costs after a release. As tanks age, the cost to insure them increases, with a sharp increase in the premium curve around the time that a tank reaches about 30 years in age. Insurance is a desirable financial mechanism even for those older tanks; however, as tanks age, it is advisable to explore options including removal, close in place, replacement and/or a switch to above-ground tanks. The clock is ticking on insurance for the older tanks, as all tanks will eventually need to be removed or closed in place. Preparing for this should be part of a facility owner’s financial planning and risk management strategy.

UST REMOVAL, REPLACEMENT AND REMEDIATION

There are a few reasons to remove a UST from service, including the age of the tank(s), business closure and confirmation of a release. You may also find that the UST is no longer needed for its original intended use. A typical UST removal including excavation, transportation, disposal and returning the ground surface to the original form ranges from $15,000 to $20,000 for a single tank. These costs assume the UST is in good condition, with no leaks or contamination found during removal. According to the EPA, cleanup costs associated with UST removal range from $10,000 for a leak with a small amount of contaminated soil, to over $1 million for leaks that have reached groundwater, depending on the extent of the contamination. The average cost of a cleanup is about $130,000 according to the EPA.

PREPARING FOR THE INEVITABLE

Currently more than half of the estimated 415,000 USTs in service are more than 25 years old. From the day the USTs are placed into the ground, owners and operators must assume that long-term operation of any UST system will 48 | FMN Magazine SPRING 2022

eventually result in removal, replacement and potential cleanup of contamination resulting from a release. As the UST system approaches 30 years in age, it may be time to consider replacing the system. Following removal, a new system must be installed unless the business is closing, being sold or the USTs are being replaced with ASTs. Assuming three 10,000-gallon USTs are being replaced with a similar system, replacement costs including new tanks, piping, dispensers and necessary testing can approach $300,000 or more and take several weeks. For many businesses, the cost to install new tanks is something they may not be prepared for, which is why it is important to start planning for tank replacement from the day your tanks are installed. As an example, for a UST system replaced in 20 years with an average inflation rate of 2.5% and a present value of $300,000, the annual value required to be set aside for the future replacement of the UST system would be about $22,100. This cost does not consider the business income lost during UST replacement, nor upgrades, maintenance and repairs that are required over the life of a UST. Facility owners need to plan for these costs, so they do not come as a surprise. Based on the increased risk for a spill or release for an older tank and the limited options for financial assurance as a tank ages, UST owners may want to consider replacing their tanks between the ages of 20 and 30 years old. By doing so, they reduce the likelihood of a significant release at their facility. UST facility owners must understand and financially plan for the eventual closure or replacement of their USTs.

Linda Gelfand is a vice president at Environmental Risk Professionals and has over 25 years of experience in pollution liability insurance and EHS management. Environmental Risk Professionals is a team of highly experienced risk professionals determined to help contractors and other business owners minimize pollution claims. For more information, visit www. Envriskpros.com.

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INDUSTRY NEWS SOUND PAYMENTS INSTALLS SOUND EASY PUMP AT SINCLAIR STATIONS

Sound Payments has installed Sound Easy Pump at 14 Sinclair stations. If a Sinclair station has not updated its pumps to EMV, store managers can contact Sound Payments directly. Additionally, Sound Payments is offering Sinclair stations free EMV hardware* for the first pump. This is in addition to the $500 rebate for each EMV reader announced by Sinclair. Sound Easy Pump is a semi-integrated secure solution that can easily and cost-effectively enable EMV at the pump in a couple of hours or less. It supports contactless service via card tap or NFC, QR code scanning, PIN-on-glass, remote key injection, MSR and EMV chip and PIN. Sound Payments does not require stations to change their in-store POS system or processors.

KALIBRATE PARTNERS WITH WEJO TO PROVIDE TRAFFIC INSIGHT FOR THE U.S.

Kalibrate, a provider of microlocal insight to organizations for making business-critical decisions with confidence, announced a new partnership with Wejo, an autonomous, electric and connected vehicle data specialist. The partnership will bolster Kalibrate’s U.S. data capabilities by adding Wejo’s vast car data set into its existing

TraficMetrix product, providing huge benefits to its end users. The new TrafficMetrix will provide comprehensive understanding of traffic flow—instead of just traffic. The addition of connected car data allows the same level of consistency in traffic data but with an added depth of granularity. Kalibrate can now offer traffic that includes traffic by hour, day of the week, month and direction.

WESTERN GLOBAL FUEL TANK WITHSTANDS 80-FOOT DROP TEST

Western Global, a leading provider of portable tanks and dispensing equipment for the storage and handling of fuels, lubricants and other fluids, successfully demonstrated the durability and strength of its TransCube Global fuel tank by dropping a tank filled with 260 gallons of water from 80 feet in the air. After the 80-foot drop test, the tank showed no signs of leakage or pressure loss. The tank was only slightly compressed due to the heavy weight and initial impact. The TransCube Global is a transportable, DOT approved, double-walled fuel tank designed specifically for auxiliary fuel supply and efficient on-site refueling. The cube-shaped tanks feature 110-percent fluid containment and meet global transportation standards to provide safe fuel transport.

FYI: RDM Defender One Alarm System FYI is used to spotlight new companies entering the industry, significant acquisitions or new product launches among companies currently offering solutions.

hen pay-at-the-pump became widely available, it was soon discovered that the gasoline dispenser was an easy target for thieves to steal personal credit card information. They did this by inserting skimmers inside the dispenser. Then, when the prices of gasoline hit the $3-mark, fuel theft became a major issue. By physically compromising the fuel dispenser, thieves can steal hundreds of gallons of fuel. Between the card skimmers and fuel theft, this has grown into a multibillion-dollar-a-year problem for card holders and business owners.

50 | FMN Magazine SPRING 2022

The Defender One alarm system was developed as a means of securing gasoline and diesel dispensers against credit card skimmers and fuel theft. Unlike the other solutions, the Defender’s unique U.S.- patented process helps protect the sensitive keypad encryption by not cutting the AC power to the dispenser. The power stays on, and the Defender simply disables the dispenser from pumping fuel. Also, this is not a subscription-based service. Arming and disarming is accomplished at the site with a small remote kept secure inside the store. RDM Industrial Electronics is a

leading remanufacturer of petroleum electronic equipment. RDM specializes in circuit boards, intercoms, displays, printers, card readers, motors, keypads and overlays, POS systems, consoles, tank monitors and probes with new replacement products available. Located in North Carolina, Colorado, Florida, Indiana and Texas, all branches are fully stocked with ready-to-ship inventory. RDM employs only degreed technicians and engineers and offers free technical support and training. RDM’s mission is to provide its customers five-star quality products and customer service with the quickest delivery in the industry. FuelsMarketNews.com

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

ADD SYSTEMS...................................................................................................................... 9

MIDCONTINENTAL CHEMICAL COMPANY INC.................................................7

AMERICAN COALITON FOR ETHANOL..............................................................3

OPIS BY IHS MARKIT................................................................Inside Back Cover

CUMMINS & WHITE.........................................................................................................37

OPW RETAIL FUELING ...................................................................................................31

DOVER FUELING SOLUTIONS...................................................................................... 5

SOURCE NORTH AMERICA CORPORATION..................................................... 23

EASTERN ENERGY EXPO............................................................................................. 51

TEKELEK......................................................................................................... Inside Cover

INVENCO GROUP LIMITED....................................................................Back Cover

THE GORMAN-RUPP COMPANY............................................................................. 19

Lock America, INC.........................................................................................................43

TRINIUM TECHNOLOGIES............................................................................................37

addsys.com

flexfuelforward.com

www.cumminsandwhite.com

www.doverfuelingsolutions.com EasternEnergyExpo.com

www.invenco.com/NACS www.petrodefense.com

www.mcchemical.com

info.opisnet.com/fuel-retailer-rankings opwglobal.com/loopsystem www.sourcena.com tekelek.com

www.grpumps.com

www.triniumtech.com/fuel

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FuelsMarketNews.com

FMN Magazine SPRING 2022 | 51

REMEMBER THIS?

Retail Dynamics 1930 to Today BY KEITH REID

he world of retail is in a state of flux as new channels bring products to market in disruptive ways. In the motor fuels industry, large-format retail made several runs at selling gasoline before the latest (and so far successful and self-supporting) efforts at hypermarkets such as Sam’s Club and Costco. In the 1960s and 1970s, Sears and large dedicated automotive service chains devastated the traditional service stations that had been the bedrock of the industry since the 1920s, leading to the gasoline c-store. The fuel side has seen branded versus unbranded, and ultimately the major oil “company store” or wholesale jobber versus the independent dealer or jobber. An article by NPN staff writer J.C. Chatfield in the March 19, 1930, issue of NPN magazine titled “Independent Marketers Make Capital of AntiChain Store Feeling” showcases the long-running battle between large- and small-format retail and the private versus major “branded” fuel site. It was the Great Depression, and anti-Wall Street/major corporation sentiment was running high at the grassroots level (another familiar theme). There was push back from local chambers of commerce (and newly formed activist organizations) against allowing chain stores such

as Woolworths, A&P and mail order house merchants, most notably Sears, into the community. If you were notable in the community at the time, you had to deal with the 1930s version of “cancel culture.” If you (or your spouse) were seen shopping in one of these large chain outlets, public pressure would be applied as a form of shaming. Local papers were pressured to not run advertising for chain stores, and politicians incorporated buying locally into their campaign messaging. Local merchants naturally saw these large, efficient, mass merchandisers as a significant threat. And they undoubtably had significant impact, though you could not open one in every small community and, as today, convenience has a value of its own. For this reason, the article notes that in the Western small town the mail order house was more feared than the chain store. Merchants in one Oklahoma town organized public bonfires of mail order catalogs, offering $1 (not a small sum at the time) for every catalog brought in and burned at public ceremonies. The local gasoline retailer benefited from this sentiment as well. It was noted that one independent retailer who was heading an anti-chain group obtained a remarkable 25% increase in

business. The group had been advertising the advantage of trading with local folk who “have their chief interest in the community.” NPN noted similar success stories were presented at an industry convention. As Chatfield stated: “These unsolicited accounts have given many jobbers the idea that they should push their natural advantage more vigorously, particularly in this period of national economic unrest.” There were many examples. One major oil company bought a number of stations from an independent but suffered a loss of 40% in local business from rebranding. However, and still valid today, it gained about 25% in business on the main highway through the city where transient customers tend to have more affinity for the national brands versus an unknown local brand. In Indiana, one very large distributor of gasoline met with hostility when it started to rebrand stations purchased from an established independent. As a result, the buyer decided to retain the local brand (another decision which is often considered today). The Great Depression was driving sentiments at the time, but the fundamentals have always been important. A well-established independent brand has tremendous value in the local community. Having a multi-brand approach can make a lot of sense on a site-per-site basis. Being a fixture in the community, having well-trained and friendly associates, and providing the convenience niche in a mass retailing universe—all of these are just as important today as they were in the 1930s. Keith Reid is editorin-chief of Fuels Market News. He can be reached at kreid@fmnweb.com

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

52 | FMN Magazine SPRING 2022

FuelsMarketNews.com

Discover every aspect of retail fuel brand performance for traditional gas brands as well as hundreds of convenience store and retail chain brands. Get competitor pricing behavior, estimated volumes, efficiency, and more for the past three years! Use this intelligence to sell more fuel and make smarter business decisions. Benchmark retail fuel brands with over 80 key measurements.

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Sometimes, the grass really is greener. Invenco’s secure, open and agile pay-at-pump systems and retail software services position each business for ongoing, independently-defined success. Come see what the hype is about. visit invenco.com/nacs for more details.

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