what’s happening out there?mseca.org/media/gt13conbobrenkes.pdfwhat’s new at pei • rp200 –...
TRANSCRIPT
What’s Happening Out There?
Bob Renkes Executive VP | General Counsel
Petroleum Equipment Institute
Tulsa, OK
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2013 GTEC Convention February 23, 2013
Savannah Marriott Riverfront Hotel
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Agenda
• About PEI
• Business Conditions
• Industry Issues/Opportunities • DEF
• ULSD
• Ethanol – E10; E15; E85
• Stage II Vapor Recovery
• CNG
• EPA UST Regulations
Agenda (…Con’t)
• What’s New at PEI • Recommended Practices
• Directory
• PEI Journal
• PEI Convention
• Questions/Comments
About PEI
Business Conditions
• 2011 Data
• October 2012 Survey
• February 2013 Impressions
Typical
PEI Distributor
Net Sales/ $254,004 $282,801 Employee Gross Margin 29.8% 28.2% Percentage
Operating Expense 27.7% 21.8% Percentage Personnel Expense 16.9 14.7
Operating Expense 10.8 7.1 Profit 2.0% 7.0%
ROA 5.8% 23.1%
High Profit
PEI Distributor
Where Did the Distributor Go?
• 2 Bankrupt
• 4 Purchased
• 1 Left the Industry
• 4 Closed Up Shop
• 1 Resigned
• 6 Didn’t Pay Dues
Business Conditions as of
October 6, 2012
6.8
Projection for 2013
7.3 (2013) vs.
6.8 (2012)
What’s Going Well?
• Construction: 25%
• Service, Inspections, Testing: 20%
• Sales: 15%
• Upgrades/Remodels: 13%
• CNG: 7%
• DEF: 6%
• Less Competition: 3%
What Is Disappointing?
• Margins/Profitability: 33%
• Labor/People: 13%
• Manufacturer Issues: 12%
• Economy/Gov’t/Banks: 11%
How optimistic are you on your company’s
prospects through 2017?
• Extremely Optimistic: 8%
• Very Optimistic: 40%
• Moderately Optimistic: 50%
• Ambivalent: 2%
• Somewhat Pessimistic: <1%
• Very Pessimistic: 0%
• Extremely Pessimistic: 0%
Recent Anecdotal Information
• Tampa
• Committees
• Las Vegas
Industry Issues/Opportunities
• DEF
• ULSD
• Ethanol – E10; E15; E85
• Stage II Vapor Recovery
• CNG
• EPA UST Regulations
DEF
• Truck stops – Nearly 1,000 dispensing DEF • Loves – 158/234 = 234 by end of 2012
• Pilot – 325/550 = 375 by end of 2012 = 550 by end of 2013
• TA – 103/150 = 150 by end of 2012
• 3,000 Truck Stops • 1/3 are already there
• 1/3 will be there in the next 18 months • 1/3 will never be there
• Commercial locations
• Conclusion: 2013 will be big for DEF
ULSD
• Phase I Conclusions
• Phase II Efforts
• What’s next? What to do until then?
Corrosion in Systems Storing and Dispensing
Ultra Low Sulfur Diesel (ULSD), Hypotheses
Investigation (146 pages)
www.pei.org or www.clean-diesel.org
Hypotheses From Phase I
ULSD stored in underground storage tanks is
contaminated with ethanol, and the ethanol is oxidized
by Acetobacter into acetic acid which is diffused
throughout the vapor and liquid space causing severe
and rapid corrosion of metals associated with ULSD
systems at retail stations. It is hypothesized that the
presence of ethanol in USTs storing ULSD is the result
of switch loading or from legacy retail sites whose
ventilation system remains intact allowing ethanol
vapors to back feed into the ULSD tank.
Questions For Phase II
• What are the other possible sources of contaminants that can lead to acetic acid formation? Where do they enter the system and contaminate the ULSD?
• Find a “clean site” to run tests
• Run tests upstream (bulk plants and terminals)
• Pulls samples from locomotive fuel tanks, tank trucks, saddle tanks
• What about non-retail stations?
What’s The Next Step?
What Should We Do Until
We Figure This Out?
Ethanol
• Problems with E10
Stagecoach 800023 Prem. Sump
Mar. 2010 Aug. 2010
Ample ethanol in vapors
Water condensing on
fixtures
Ample production of
ti idacetic acid
Extensive corrosion
800023 Premium Sump Water Vapor Samplers
mg/L mg/L
Eth l N S l 14850Ethanol No Sample 14850
Acetic acid No Sample 125
Benzene No Sample 1
Total BTEX No Sample 21
no standing water, STP 2 years old, pH condensate 5.3
Ample ethanol in vapors
Water condensing on
fi tfixtures
Ample production of
acetic acidacetic acid
Corrosion
800128 Premium Sump Water Vapor Samplers
mg/L mg/L
Eth l N S l 24000Ethanol No Sample 24000
Acetic acid No Sample 778
Benzene No Sample 2
Total BTEX No Sample 10
no standing water, STP 2 years old, pH condensate <4
A l th l iAmple ethanol in vapors
Water condensing
on fixtureson fixtures
Ample production
of acetic acidof acetic acid
Corrosion
800128 Regular Sump Water Vapor Samplers
mg/L mg/L
Eth l N S l 13700Ethanol No Sample 13700
Acetic acid No Sample 667
Benzene No Sample 2
Total BTEX No Sample 5
no standing water, STP 2 years old, pH condensate <4
Ample ethanol in p e et a o
vapors
No water
Little acetic acid
N iNo corrosion
18 DOT E85 Gasoline Sump Water Vapor Samplers
mg/L mg/L
Eth l N S l 1340Ethanol No Sample 1340
Acetic acid No Sample 0.332
Benzene No Sample 0.002
Total BTEX No Sample 0.030
Minimal ethanola et a o
in vapors
No water
No acetic acid
N iNo corrosion
560100 Premium Sump Water Vapor Samplers
mg/L mg/L
Eth l N S l 24 3Ethanol No Sample 24.3
Acetic acid No Sample <0.005
Benzene No Sample 0.13
Total BTEX No Sample 1.41
no water, STP 4.5 years old
Minimal ethanol
in vapors
Adequate water
Little acetic acid
Normal amount ofNormal amount of
corrosion
800023 7 Regular Sump Water Vapor Samplers
mg/L mg/L
Eth l 1 87 12 21Ethanol 1.87 12.21
Acetate or Acetic acid 1.34 2.07
Benzene 0.22 0.72
Total BTEX 2.59 6.36
7" water, STP 2 years old, pH 5.8
A link exists between
ethanol in motor fuels andethanol in motor fuels and
the corrosion of metals in
th fthe sumps of an
underground storage tank.
In the summer, the contents of a UST tend to be cool
with respect to the atmosphere. There is a tendency
for water to condense from the air onto cool metal
fixtures in a sump The sump can also collectfixtures in a sump. The sump can also collect
precipitation.
The vapors in the ullage of the UST contain high
concentrations of ethanol.
If the vapors escape the UST, they can dissolve in
t di t i th i t th t hstanding water in the sump or in water that has
condensed on metal fittings.
Acetic acid bacteria can use oxygen
f th t h t idlfrom the atmosphere to rapidly
transform the ethanol to acetic acid.
2 CH3CH2OH + O2 2 CH3COOH + 2 H2O
The acetic acid produced by p y
biological degradation of ethanol can
facilitate the corrosion metals.
Corrosion Characteristics
• Severe STP sump corrosion occurs
in sumps with limited ventilation.p
• Corrosion deposits have globular
shape (tubercles) which could beshape (tubercles) which could be
indicative of MIC.
• Corrosion rate seems related to• Corrosion rate seems related to
sump temperature.
Corrosion Rate Related to Temperature
L ft t Ri ht C t l Wi i S O t DLeft to Right: Control, Wire in Sump Oct.-Dec.,
Wire in Sump 2 weeks in Aug.
Controlling STP Sump Corrosiong p
• Detecting & Reducing vapor leaks• Detecting & Reducing vapor leaks
• Use more corrosion resistant stp
tcomponents
• Improve STP sump ventilation
• Corrosion resistant coatings
examples: Tape Coat TC-7100 or 3M p p
323
• BiocidesBiocides
• Fuel additive: corrosion inhibitor
How serious is the STP sump
corrosion?corrosion?
STP sump picture from Edwin C. French IV, p p ,Senior Env. Compliance Specialist, Storage Tank Section, Leon County, Florida
Corrosion on vapor sampler wire in sump
for 66 days compared to control wirefor 66 days compared to control wire.
Corrosion on vapor sampler wire in sump for
66 days compared to control wire, notice the
globular shape deposits.
SUMMARY
Rapid corrosion has been observed in somep
ethanol blended gasoline stp sumps with
limited ventilation; these sumps contain high p g
ethanol vapor concentrations with microbial
activities forming acetic acid. Water g
condensate and temperature appear to
influence rate of corrosion. Future studies
need to be performed to determine the
severity of the stp sump corrosion, and best y
ways to control the corrosion.
QUESTIONS/BRAINSTORMINGQUESTIONS/BRAINSTORMING
Ethanol
• Future of E15 • Political: “All of the above plan” – 2/12/13 SOU address
• Political: API: Repeal RFS
• Political: Is a divided Congress interested in RFS repeal?
• Potential impact on vehicles – AAA
• Potential impact on corn prices
• Potential impact on station owner liability
• Blend wall issues
• Underground compatibility issues
• The Bottom Line
Underground Compatibility Issues
• EPA Guidance July 5, 2011
• >E10 and >B20
• Federal law: “Owners and operators must
use an UST system made of or lined with
materials that are compatible with the
substance stored in the UST system.”
UST Components That Must Be Compatible
• Tank or internal lining
• Piping
• Line leak detector
• Flexible connectors
• Drop tube
• Spill and overfill prevention equipment
• Submersible turbine pump and components
• Sealants (including pipe dope and thread sealant, fittings, gaskets, o-rings, bushings, couplings and boots)
UST Components That Must Be Compatible
(…Con’t)
• Containment sumps (including submersible
turbine pumps and under-dispenser
containment)
• Release detection floats, sensors and
probes
• Fill and riser caps
• Product shear valve
Three Options for Meeting the Compatibility Requirement
• Use components that are certified or listed by a
nationally recognized, independent testing
laboratory for use with the product stored;
• Use components approved by the manufacturer
to be compatible with the fuels stored; or
• Use another method determined by the
implementing agency to sufficiently protect
human health and the environment.
Acceptable Form for Manufacturer Approval
• In writing
• Affirmative Statement of Compatibility
• Range of biofuels the equipment is
compatible with
• From the manufacturer itself.
UST Component Compatibility Library @ www.pei.org
Ethanol
• Future of E15 • Political: “All of the above plan” – 2/12/13 SOU address
• Political: API: Repeal RFS
• Political: Is a divided congress interested in RFS repeal?
• Potential impact on vehicles – AAA
• Potential impact on corn prices
• Potential impact on station owner liability
• Blend wall issues
• Underground compatibility issues
• The Bottom Line
Stage II Vapor Recovery
Stage II Vapor Recovery Map
Covers 30,600 stations in 19 states and Washington D.C.
Stage II Vapor Recovery
• Atlanta metro only
• Vermont – New Hampshire – Maine already started
• Connecticut – Ready to get started
• St. Louis starts March 17
• Texas, Louisiana, Tennessee, Atlanta, Pennsylvania, Indiana have the ball rolling
RP300
CNG
New EPA Regulations
• Will they happen?
• When will they happen?
• When will it impact my business?
Retail Customers
• Relatively healthy
• Station churn
• 62% is holding
• New builds/upgrades
Transportation Fuels of the Future
• Good for our industry
• Tough on our customers
National Objectives
• Reduce U.S. reliance on foreign oil
• Increase efficiency (CAFE Standards)
• Transition to non-petroleum-based energy sources
Uncertain Process
• Leadership changes/decisions amended
• Technologies are developed
• Previous assumptions wrong and/or irrelevant
• Regular Gasoline
• E10
• E15*
• E85
• E?*
• CNG
• Electricity
• DEF
• LNG
• Diesel
Transportation Fuels of the Future
EMV
• Europay Mastercard Visa
• Two important deadlines • October 1, 2015: Liability shifts to merchants for in-store
fraudulent credit card transactions
• October 1, 2017: Dispensers are either EMV compatible or marketer accepts resolving potential liability if they don’t
What’s New At PEI
• RP200 – Installation of ASTs – March 4 in Chicago
• RP800 – Installation of Bulk Plants – March 18 deadline
• RP1300 – Fixed Base Airports
• RP1400 – Installation of Emergency Generator Systems – February 26-27 meeting in Memphis. Available 2013.
• RP1500 – Installation of CNG Refueling Equipment – April 23-24 meeting in Baltimore. Available 2014.
• RP900 – Inspection & Maintenance of UST Systems – After the new federal UST rules come out
Directory
Convention
PEI Journal
Questions/Comments?