form of fuel, even with all the natural
gas we are ;nding,” Gilligan said. “So,
in the worse case scenario, we could see
a 40% reduction in 10-15 years if all of
these new fuel sources develop as they
are projected. But being a little more real-
istic, a 10% decline in volume is more
likely, which is still very signi;cant for
our industry. When those volumes are
lost, the smaller, less profitable motor
fuel outlets will close because they will
likely be hit with a lot of other regula-
tions as well.”
For example, the EPA has recently
come out with a new 400-page rule on
underground storage tank requirements
(see page 28.) When that is all said and
done a new round of tank regulations
could put pressure on a number of low-
volume gas stations to simply close their
doors, Gilligan said.
History tells us that massive tank
overhauls could dramatically impact the
number of stations across the country.
In 1998, Gilligan estimated that about
100,000 tanks were shut down, which
resulted in about 25,000 stations being
forced to close permanently. “It’s mind
boggling how much government can
dictate the success or failure of a fuel
business,” he said. “Retailers have to be
able to make money or they are going to
walk away from the store.”
Boyett, of Boyett Petroleum, is already
seeing stations on good corners closing
their doors in California and Florida as
they are unable to keep up with new
state and federal regulations.
“There aren’t a lot of new sites being
built because there are a lot of stores that
are in foreclosure in suburban markets
across the country that you can buy for
one-third of the cost to build a new site,”
said Boyett, who operates 10 Cruisers
convenience stores in California and distributes Valero, Arco and ConocoPhillips
fuels in addition to its proprietary KWIK
SERV brand, which is available at more
than 50 stations.
Boyett Petroleum is looking to build up its Cruisers convenience store chain in California.
The company is testing some new foodservice items and focusing heavily on meeting the
customers’ growing need for fast, convenient service.
PREPARING FOR THE FUTURE
One of the problems plaguing Boyett
and other operators in dense markets is
that there are too many gas stations and
convenience stores at a time when it’s
dif;cult to break even on fuel alone.