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.”
At Issue
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.
“A lot goes into these decisions,” he says. “If I’m going to put in new dispensers, when should I do it?”
Gearing Up for Tomorrow
From a manufacturer’s perspective, the market is taking steps to meet the challenges of changing fuel formulation, EMV and loyalty marketing. Travis Bouck, vice president of marketing for Gilbarco, says all of those factors are driving a current rise in upgrading or replacing dispensers.
During the past year, Cary, N.C.-based The Pantry has rolled out an upgraded TV and marketing element to pumps at more than 1,000 sites, with other companies graduating from testing TVs at five to 10 sites to rolling it out to networks of 50 or more locations, Bouck says. While he would not give specific numbers, he says Gilbarco doubled the number of units it shipped last year and is now on track for another record year.
Gilbarco is seeing growing demand, he says, especially in large metro areas and higher-volume sites. In line with that growth is the demand for its larger 10-inch TV screens, double the size of its former standard.
“A big part of why the industry adopts … TV is to give customers information while on the forecourt, whether it’s a promotion or advertisement or news,” Bouck says. “But some do it to subsidize the price of the equipment.”
In terms of new equipment, Bouck mentions the company’s EMV retrofit kit, something he believes will become popular as deadlines approach. Similarly, as the dust begins to settle on the uncertainty of renewable fuels, equipment options have risen to address those needs, he says.
“As fuel margins decline, customers are asking us, ‘How do I get return on my forecourt investment?’ ” Bouck says. “They ask, ‘How do I drive traffic in store, where I have a vast majority of my profit?’ ”
Taking a futuristic turn, Bouck says Gilbarco is working with online-payment engine PayPal, San Jose, Calif., among other partners, to test mobile payment. Tying the option to lower transaction fees and customer discounts are crucial factors for this movement to gain momentum, he says.
“At the end of day, refueling points are about convenience,” he says. “That means simplicity … even though trends in the industry work against speed.”
Adding fuel grades and expanding the number of payment methods adds to confusion and slows down transaction speeds, Bouck says. “But we’re doing everything we can to innovate the user interface so that in the future, we deliver a faster, more convenient experience,” he says.
A Modern Take
For Austin, Texas-based Wayne, a GE Energy Business, refreshing its dispenser’s visual presence is an important part of pump upgrades. This fall, it announced an update to its Ovation dispenser.
“For 10 years, we’ve witnessed the success of the [Ovation] dispenser,” says Neil Thomas, president of Wayne. “And during that time, we’ve learned many things about how it’s used and how we can improve to make it even better for our customers.”
The new design is essentially a “refreshed, updated” look, says Patrick Jeitler, product manager for Wayne. It allows for increased “branding” or visual design space; sleeker lines; a change to glass over a clear composite on the main pricing and gallon display, as well as the price-per-gallon displays for a “crisper” look; and a shift to white font on a black background for increased readability both day and night.
Much in the way design evolves with other common devices such as kitchen appliances or cellphones, the company’s dispenser is evolving “to be more than just a functional piece,” he says. “We’re taking it to the next level.”
Walled In
In an effort to keep ahead of pending environmental rules, which are due for a revision in the coming year, manufacturers have been refining different elements of the fuel-delivery system.
One of the latest developments at OPW Fueling Container Systems, Smithfield, N.C., is a single-wall spill container that allows for accessible inspection and parts replacement, with much of the system housed within an outer shell. For many fuel operators, the prospect of having to replace anything already buried in concrete can be a costly undertaking, according to product manager Charles Liebal.
In addition, OPW’s tank-gauging solution has evolved, with the computing capability and physical room to tie in new devices that today may not be required. “People are building today but getting ready for tomorrow, if regulatory [bodies] were to do anything in the future,” Liebal says.
Containment, of course, is an issue throughout the on-site fuel-delivery system, as James Lawrence, president, of EMCO Wheaton Retail, Wilson, N.C., points out. With the formulation of fuel in question, a trend in equipment is to make components out of stainless steel. To that end, the company has produced stainless-steel buckets that surround UST fuel-nozzle receptacles. They retrofit into established units. Typically needing two man hours for installation, the retrofit will not require breaking concrete, Lawrence says.
“With new alcohol fuels and [other diesel] requirements, having more components with stainless steel was an obvious move,” he says.
And as the industry progresses through its numerous uncertainties, the business case for upgrades increase, leaving marketers and retailers continually looking to manufacturers to provide guidance and options.
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