By Stephen Bennett
As fuel oil dealers adapt to the advent of ultra-low sulfur heating oil and diesel, and the marketing of biofuel, bulk plants are adapting to those trends to keep in step with their customers.
And, just as many fuel oil dealers have had to adjust to the idea of helping their customers burn less fuel—by marketing high-efficiency equipment, for example—some bulk plant operators are opting to downsize storage capacity at their sites.
In other cases older bulk plants that have become outdated are being decommissioned instead of upgraded to new standards, said Bob Ceppi, project manager for MPE, Inc., a bulk terminal developer based in Hebron, Conn. Demolition of such plants currently comprises a growing portion of his company’s business, Ceppi said. Bringing existing plants into compliance with environmental regulations, and updating or expanding existing sites drive the design and construction side of his business.
“We see a lot of small oil dealers who have old facilities basically shutting down—tearing down their facilities and going to bigger facilities for throughput,” Ceppi said. “The bigger guys are getting bigger and the little guys are disappearing.”
Ceppi said that most facilities that are built now are designed for two or three days of supply. “Oil dealers now are buying futures in the commodity markets. They buy ahead of time. They don’t do [high-volume] storage. In the old days they bought oil for 25 cents in the summer and sold it for 50 cents in the winter. Those days are over.” To replenish, they run to marine terminals and fill up their tanks, Ceppi said.
Some bulk plant operators opt to reduce the storage capacity of a facility because of the price of a commodity and improved transport. “Back in the day, when prices were lower, maybe they would store more and take more risk,” said Michael Trask, secretary of Trask-Hall Equipment Co. in Braintree, Mass., and Trask Petroleum Equipment in Providence, R.I. The companies design, build and service bulk plants.
“With the volatility of the market, and better transportation some operators are undergoing renovations that result in a reduction of total storage capacity,” he said. “We used to build plants where the customer would say he needed 150,000 gallons and then tell us to build capacity for 200,000 gallons.”
In contrast, Trask said, a recent project called for his company to replace 80,000 gallons of underground, single-wall storage with 30,000 gallons above ground. The 80,000 gallons of storage was never fully utilized, Trask said, estimating that the storage was “maybe half-full all the time.”
Before making a drastic change of that kind, Trask advises considering a number of factors, including one that the fierce winters of late serve to highlight.
“We’ve had an abundance of snowstorms,” Trask said. “Bulk plant operators should consider what transportation difficulties might arise in a season like this. You could have great transportation, but the roads get shut down in some cases. What happens if there’s a three-day storm? What volume do you need to keep you in business for three days without deliveries?”
Further, “when you’re changing from below ground to above ground you need more surface area,” Trask pointed out. He said the company that cut its storage to 30,000 gallons above ground still needed about the same surface area as had been taken up by the 80,000 gallons of underground storage.
Some bulk plant operators need their storage capacity to be more versatile—to include space for blending biofuel with diesel, to enable them to perform red-dye injection and to add winter additives, Trask said.
For an operator that just added 90,000 gallons of storage capacity at a facility in Connecticut, “we added an extra compartment because they are thinking about doing some bio,” Trask said. “Not now. They wanted it to allow for diversification in the future.”
A long-range plan executed over the long-term can pay dividends, Trask said, citing as an example a renewal project that began in 1997 and finished some 10 years later. “That was the customer’s choice,” he said. The plan featured five phases to be executed over the period, on a facility with 150,000 to 200,000 gallons, Trask recalled. “We removed some storage, and put in better containment and better off-loading positions.”
Every operator’s needs differ, Trask said, and those requirements must be identified before a design—whether for a remodel or for a new facility—begins. “It’s not all about state-of-the-art,” Trask said. “It’s all about what the customers’ needs are. We have customers that want basic.” Trask defined “basic” as “the ability to store fuel and deliver fuel to a vehicle under the required containment conditions.”
If the project involves a high-volume facility, speed—getting vehicles in and out—is a priority, Trask said. That’s where meters factor in, and the tracking of outgoing product “for inventory purposes or retail,” he noted.
A key to creating a state-of-the-art bulk plant, such as those that feature an inventory control system, bio-blending, red-dye injection and application of cold point depressants, is the efficient integration of devices and components. “The devices that we use… are really what make the facility successful,” Trask said, enabled by the technical know-how of his brothers Paul Trask, president of the two companies, Billy Trask, vice president and their father, Paul Trask Sr., who consults with the brothers and is involved daily.
The company emphasizes service once a project is completed, Michael Trask said. “These are facilities that are pumping millions of gallons, and there are going to be things that need to be maintained,” he said.
MPE has carried out a number of extensive makeovers and updates that have been prompted in part by environmental regulations. The company updated a site operated by Mercury Energy Distributors in Waterbury, Conn., a 2013 project that included removal of old horizontal tanks that were not environmentally compliant. That project included installation of three 30,000-gallon vertical tanks and the addition of a three-bay loading rack. The company also added concrete floors to an existing earthen dike and expanded dike areas, installed six top-loading arms and one bottom-loading arm, added a second off-load position for trailers and put in new electrical service, Ceppi said. The makeover included leaving a space for a 30,000-gallon propane tank, he added.
MPE’s ongoing projects include one for Wesson Energy, another dealer in Waterbury. The company is updating a Wesson facility to bring it into environmental compliance, Ceppi said. The project includes removal and demolition of some of the old tanks, adding an impervious fabric liner in the containment dike, and installing a canopy, a new loading arm and a new off-load pump. That project is expected to continue through 2015.
Another ongoing project is for Dennison Lubricants, Lakeville, Mass., which has a lubricants terminal in Worcester, Mass. Ceppi said his company is supplying and installing six 30,000-gallon aboveground vertical tanks, plus piping and pumps and a containment dike, as well as a new loading rack with containment and four new loading arms.
Meanwhile activity on the propane side is popping, said Ceppi, who has a professional engineer’s license for design and general contracting in northeast states. “We are designing and building propane facilities,” he said. “Almost every oil dealer wants to have a propane tank now.”