Shell franchised dealers against unjust EVR upgrade charges that are being passed on to a dealer. sign now

To: Bill Lowrey, Esq., Gen. Counsel & Director of the Board of Shell Petroleum Inc.

We are the Santa Clara County California franchise retailers, otherwise Lessees of service stations owned by Equilon Enterprises LL C dba, the Lessor. We present this Petition to
Bill Lowrey, Esq., General Counsel and Director of the Board of Shell Petroleum Inc.

Our grievance for this Petition is a circular letter dated May 15, 2008 sent to Lessees by
Mr. William D. Spurgeon, Lesssors General Manager West Region (Exhibit A). The letter seeks recoupment from Lessees for work done by Lessor installing Lessors newly upgraded Phase II Enhanced Vapor Recovery (EVR) system and, for the first time, In-Station Diagnostic (ISD). Both installations are mandated by the California Air Resources Board (ARB) Executive Order 201 to Owners of Service Stations for completion and compliance before April 1, 2009. Lessor is the true owner of a chain of service stations located in the Santa Clara County leased to Lessees exclusively for dispensing Lessors Shell branded gasoline in the open retail market for public consumption.

Lessees dispute and reject Mr. Spurgeons recoupment claim of approximately $1331.10 per Product dispenser. Every service station has more than one Product dispenser. The Product dispensers in Lessors chain of service stations located variously throughout the Santa Clara County now comply with the ARB mandated EVR system. Each dispenser has a hose, nozzle, break-a-way and whip hose, all of which are collectively captioned hanging hardware. The Phase II EVR mandated hanging hardware for dispensing gasoline, and enforced by ARB, now comply with the Environmental Protection Agency for public health protection and safety from gasoline vapor emission, particularly protecting the health and safety of the consumer when pumping gasoline into his or her vehicle at the dispenser. Most proudly, Phase II EVR systems, and ISD, are a unique State of California governmental technological achievement for recovering gasoline vapor from escape for clean
air. The highlight is the new type of innovatively designed nozzle; ensuring its proper function with its new type of hanging hardware. The new technological design of the nozzle cuts off gasoline vapor from escaping even when pumping gas into a gas can; let alone a vehicles gas tank. Phase II EVR imposes strict liability on owners of service stations like the Lessor and it is enforced by ARB.

Mr. Spurgeon cites for his claim the Retail Lease Agreement Section I (2) of Exhibit B (Lessees Maintenance Obligations).

Petitions Contention

Our contention relies principally on the Retail Sales Agreement. Accordingly we differ from
Mr. Spurgeons reliance on the Retail Lease Agreement.

The basic difference between ourselves and Mr. Spurgeon is: we say Phase II EVR is new technology in gasoline vapor recovery. Mr. Spurgeon by claiming recoupment denies Phase II EVR is a new system. We submit that he is confused, mistaken or ignorant because he equates the new and innovative Phase II EVR technology to be the same as the now obsolete Balance system which is now discarded by Executive Order 201. We highlight this for your attention because, we believe, Equilon is a signatory to the Certification committed to install Phase II EVR and ISD and enforceable by ARB. Without taking up your valuable time on the technological differences between the two systems for gasoline vapor recovery, we will request you to investigate and let us know your conclusion.

However we find it most regrettable that Mr. Spurgeon as Shell West Coast General Manager has not kept himself informed with ARB Engineering and Certification in Air Quality and Management, appertaining to the Environmental Protection Agency. Phase II EVR and ISD are unique innovative results; progressively achieved from year 2000 by ARB Engineering and Certification Branch for clean air. It is even more regrettable that Mr. Spurgeon does not seem to have known that in 2007 ARB Engineering and Certification Branch was conducting numerous educational work shops introducing Phase II EVR and ISD. We submit if he knew, then it was his professional duty as Shell West Coast General Manager to have invited ARB Engineering and Certification for educating Shell local Management and Retailers on Phase II EVR and ISD. It is with shame we submit that we Retailers had to get our introductory acquaintance of how Phase II EVR and ISD
work from the workmen and technicians of the various engineering companies who came to install Phase II EVR and ISD. Accordingly we have no reasonable depth of knowledge for maintenance- except a meager or gossip knowledge.

We refer you to the Retail Sales Agreement. The Agreement titles Lessor Seller and Lessee Retailer. In comparison to the Retail Facility Agreement, the distinction defines the contractual relationship as twofold. The Retail Facility Lease distinguishes and defines Equilon owner of the service station who leases it fitted with all the necessary equipment and fittings for the sole purpose of retailing gasoline. The principal equipment or fitting is the Product dispenser and hanging hardware. Accordingly a lessee leases (occupies) the service station solely for retailing Lessors gasoline. The Retail Sales Agreement defines and explains the contractual relationship as one of retailing Lessors Shell branded gasoline; the Lessor is Motiva Enterprises dba Equilon Enterprises dba Shell Oil Petroleum US (SOPUS) dba wholesaler of the Shell branded gasoline, and therefore the Seller specified in the Retail Sales
Agreement.

Indeed, the title of Seller identifies Equilon the Lessor of the retail facility to the Lessee as Retailer. The Agreement in Exhibit B Environmental Regulation Supplement distinguishes Sellers Responsibilities and Retailers Responsibilities conforming strictly to the Environmental Protection Agency regulation of Fuels and Fuel Additives for ensuring Quality. Sub-section 7 imposes upon retailer maintenance of the hanging hardware for fuel pumps or dispensers in good working condition to comply with the Regulations. Phase II EVR is new technology and likewise requires maintenance not hitherto experienced before. More importantly for consumer protection each dispenser should carry a notice publicizing the health safety of the new innovative type of nozzle to cut off vapor from escaping into the air and ensuring the public health and safety while using the pump.

Since Phase II EVR and ISD are State of California break-through new technology we as Californians submit a copy of this Petition to Senator Barbara Boxer, Chairman Senate Environment and Public Works Committee and member Senate Commerce, Science, and Transportation Committee and to Congressman Henry Waxman, Chairman, House Energy and Commerce Committee in the new Congress.


Note: emailed for urgency because retailers bank accounts are being accessed by SOPUS for hanging hardware charges. Signed petition and copy of Mr. Spurgeons letter will follow by mail.

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Christa TannerBy:
Entertainment and MediaIn:
Petition target:
Shell Franchised Dealers

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