HomeMy WebLinkAbout2007-05-22
Bulk Fuel Committee Meeting
Meeting Minutes
May 22, 2007
Present: Whitey Willauer, Chairman, Brian Chadwick, Al Peterson, Dual Macintyre
Also Present: Libby Gibson, Town Administrator, E. Foley Vaughan, Hadwen Fuller (Had) and
Darren Fuller (Darren), Ascent Aviation Group, Inc. and Janine M. Torres, Administrative
Assistant
Mr. Willauer began the meeting at 11 :35 A.M. noting Had and Darren Fuller of Ascent Aviation
Group, Inc. were invited to this meeting to share their expertise in the petroleum business. Mr.
Peterson explained the Fuller's extensive relationship with the Airport and the committee's needs
to have someone with their expertise offer their perspective on the project.
Had Fuller began by giving a brief history of their company noting their growth into the largest
ConocoPhillips distributor of jet fuel and aviation gasoline in the United States. Ascent is also
involved in the aircraft deicing business, leasing and selling of fuel and deicing trucks, fuel farm
construction and run consortiums. They have also become involved in supplying airports with
ground fuels, diesel, gasoline, ultra low sulfur and bio diesels.
Had explained how fuels are changing dramatically; recent change over to low sulfur diesel and
home heating oil and are already moving towards ultra-low sulfur products. These changes are
creating a difficult challenge to everyone in the industry to cope with. Ultra-low products may
not be able to pass through the same pipe as higher sulfur products due to the residue left behind
by the higher sulfur products which could contaminate the ultra-low sulfur content. It is Ascents
opinion continuing changes are likely and should be planned for. For this project, it could mean
multiple pipelines for the different sulfur level products as of today but also need to think about
the future changes to the industry and what that could mean. Consider continuing to truck diesel
and jet fuel to reduce number of pipelines.
Ascent suggests beginning the permitting process without the thought of exactly what the project
will entail several years down the road. Ascent broke down the project into the different aspects
that could be handled through outside entities: construction, financing, management, purchasing
and consulting. Darren continued by promoting Ascents experiences with most of these aspects
and announced their interest in assisting with the committee's direction.
Mr. Macintyre asked if there was a limit with storage time especially with the newer fuels. Had
thought not but added number of deliveries vs. time of deliveries because formulations for these
fuels change on their own depending on seasons and the different additives used for each. Had
continued by stressing not only timing for the season but timing for inventory capabilities and this
brings in hedging if you're not the sole supplier. Mr. Vaughan interjected that we would not be
the sole supplier.
Darren reported this is a real competitive issue as far as pricing. The competition will not have
the same fixed costs as the town will in building a $50 million facility and selling $10 million of
product a year. Mr. Chadwick interjected the long term goal is to eliminate barging through the
harbor specifically for environmental and safety concerns for the town. Steamship deliveries,
however, would continue.
Discussion took place of the many factors that could change the project during the multiple year
permitting and engineering phases. Had added the price of steel since the study was completed
has already added millions to the proj ect cost.
Mr. Chadwick asked for Ascents opinion on how they would approach this project. Using the
current delivery system to the airport as an example, Had explained the least amount of product
transfers produces the lowest risk and cost. For example, for this pipeline project, product would
be handled a minimum of six times, terminal to tanker, tanker to pipeline, pipeline to tank, tank to
truck, truck to delivery. Perhaps the island should look at the present day system and make it as
good as it can be. Darren added the location of the proposed tank farm makes a lot of sense and
the concept is the project is sustainable in the short term, but the long term cannot be predicted.
Had suggests if the pipeline and tank farm is the way the town wants to proceed, it must begin the
permitting process now and risk the $4 to $5 million it will cost to determine if the project can
move forward.
Mr. Willauer introduced the idea of continuing to truck product, but store at a new tank farm.
Build the tank farm first and work on the permitting process of the pipeline for the future. Had
offered the suggestion of working with the steamship to run a special boat, possibly during the
night and perhaps only during the off season, bringing over 6 to 10 trucks at once (60 to 100
thousand gallons). Mr. Willauer noted complications with Hyannis may arise and the group
agreed to consider New Bedford.
Discussion took place on how many tanks would be needed as a minimum. One would be needed
for gasoline, one for ethanol for blending, one for high test if desired, one for heating oil and one
for low sulfur diesel.
Continued discussion took place on the existing downtown tank farm and the renewal of the
license for that facility.
It was decided to allow Ascent to work on some actual gasoline and heating oil numbers to help
determine size of tanks needed. Mr. Peterson to act as a point of contact. Ascent will come back
with a consulting proposal.
Mr. Macintyre was assigned the duty of drafting, for Ms. Gibson's review, a summary work order
for Ascent to deliver a Task Order Contract to include statement of deliverables with cost
estimates on the work they will perform.
Ascent can respond with a proposal 30 days from receipt of information.
It was discussed to meet with town auditor in the in the meantime to discuss his thoughts on
structuring the organization between the municipality and the airport. Ms. Gibson to coordinate.
Meeting adjourned 1 :00 P.M.
qctfullY s~mitted,
. D... 'No... \}J- N. ~
Janin M. Torres