From tanks in the ground to digital payment in the “cloud,” technology and the equipment involved with pumps has created a gamut of storage, delivery and payment solutions in time-step response to a slew of regulatory and security obstacles.
Add to the mix the aging population of underground storage tanks (USTs) in general, with most upgraded last in the mid- to late 1990s when federal mandates kicked in.
“Marketers are acknowledging that nothing lasts forever,” says Bob Renkes, executive vice president and general counsel for the Petroleum Equipment Institute (PEI), Tulsa, Okla. “[Many tanks] were upgraded 25 years ago when we knew the rules. What’s [a tank’s] useful life? Who knows?”
That uncertainty may be igniting a new wave of equipment review among retailers, but whether it’s a ripple or tsunami has yet to be seen. Either way, manufacturers believe advancements in technology and equipment have mostly kept pace, especially with regard to key developments:
- Fuel formulation. Evolving regulations and government incentives surrounding fuel formulation have kept retailers guessing for several years, demanding flexibility and agility. Alternative fuel options have encompassed ethanol blends, compressed natural gas (CNG) and electricity, all of which require different dispenser components beyond traditional pumps and related equipment.
- Data-security mandates. Though deadlines for upgrading pumps to Europay MasterCard Visa (EMV) standards loom in 2017, retailers continue to assess the return on investment (ROI) and the fluid nature of the situation.
- Marketing and payment. Beyond data security, pumps are becoming places to market products as well as accept new forms of payment. TV screens in pumps are getting bigger, while mobile payments continue to be a hot topic if not common yet at most sites.
Meeting the changing needs of the market is what’s motivating change with monitoring devices produced by Gilbarco Veeder-Root, Greensboro, N.C., says Kent Reid, vice president of strategic development for the Veeder-Root side of the business. Historically, the company has focused on tank gauges and other supply products as they relate to compliance. But the focus going forward, he says, is equipment management and gaining efficiencies.
To that end, the company is launching a Web-based portal that allows marketers and retailers real-time access to equipment data. “Its capabilities will grow over time, but the focus will be ease of access, backing up archival data and exception-based management,” Reid says. “It’ll drive efficiencies in [fuel inventory] and lower risk going forward.”
While change may be inevitable, uncertainty seems to be a given with everything tied to fuel. Renkes of PEI outlines the ongoing issues in the fuel business and their obvious implications for fuel technology and equipment:
- Renewable Fuel Standards (RFS) and ethanol blending. With RFS and the price of ethanol both in continual flux, Renkes says the decisions surrounding them are also cloudy. In recent years, many marketers and retailers have paid to put in equipment that could handle E85 fuel, only to have the government subsidies backing that choice evaporate at the beginning of last year. If prices for E85 fall to where the market finds the option attractive, then there’s a future for it, Renkes says. Otherwise, operators will opt for E15 blends, even though the government must still make final recommendations on that formulation.
- UST fueling-system upgrades. While UST regulations may also change due to ongoing government review and uncertainty in some states as vapor-recovery rules fade, Renkes says the larger issue will be overarching concerns about aging tanks.
- EMV and mobile payment. Fixed EMV deadlines set for 2017 mean upgrading pumps to accept the chip-based card. Because EMV is backed by the major credit cards, Renkes says that despite opposition by many retailers, there may be no choice but to comply.
Marketers and retailers are approaching these dilemmas in a variety of ways, trying to balance cost with creating locations that will be viable fueling sites into the next decade. Some retailers have planned for enough tank capacity to handle a variety of alternative fuel options, Renkes says. Others are waiting for state and local governments to decide on specific standards, choosing to move when the dust settles.