by Dave Weiman
Nineteen miles south of Duluth, Minnesota is the old fur trading and lumber town of Cloquet, Minnesota, where Best Oil Company – a major distributor of Phillips 66 aviation fuels – is located. Cloquet is also where Jarden Home Products, makers of Diamond wooden matches, and Sappi Fine Paper North, are located.
John, Chris and Mike McKinney are the third generation owners of Best Oil Company, which started as a supplier of auto gasoline and heating oil. Today, Best Oil Company also distributes petroleum products to gas stations, convenience stores, bus companies, trucking firms, municipalities, counties, electrical generating plants, and both jet and 100LL avgas to airports and fixed base operators at 40 airports thus far throughout Minnesota, Michigan and Wisconsin. Best Oil Company also owns and operates a chain of 19 convenience stores called “The Little Stores.” All combined, including drivers, office personnel and retail employees, Best Oil Company employs 300 people in northeast Minnesota.
John McKinney’s maternal grandparents immigrated to the United States from Finland, and met in the United States in 1923. McKinney’s grandfather, Ray Lindholm, worked for an oil company, then built his own gas station and became a Conoco distributor.
McKinney’s parents met at the University of Minnesota in Minneapolis, and when they graduated in the late 1940s, McKinney’s grandfather told his father that the fuel and oil business was not a bad business to get into, so his parents bought a small jobbership in Couderay, Wisconsin.
“My dad drove truck, and my mother kept the books, and the business grew, and they expanded into Hayward where they purchased some stations,” said McKinney. “After seeing how well his son-in-law was doing, my grandfather invited my dad to become partners with him in his business in Minnesota. So my dad and mom did just that in the early 1950s and bought him out in 1961. The business has been growing ever since.
Best Oil Company operates six transports and seven trailers, 24/7. The trailers are dedicated to either jet fuel, avgas, or auto fuel.
Best Oil’s corporate offices are next to the railroad tracks that used to transport fuel to bulk storage in Cloquet. Today, everything is trucked directly from terminals to customers. All aviation fuels are picked up at either Flint Hills Refinery, or the pipeline terminals in Minneapolis, Chicago or Green Bay.
John McKinney welcomed questions about Best Oil Company, and the fuel business in general.
WEIMAN: John, why is it that the price of gas at the local convenience store can fluctuate a lot, and the price of avgas lags?
MCKINNEY: Airports – particularly the smaller airports – typically do not go through fuel that fast. “A gas station on a really busy weekend will go through a load in a day. In comparison, an airport may find itself sitting on a load of 8,000 gallons of fuel for two or three months before selling it. (In the meantime) maybe the price went down, but it is hard for the fixed base operator or airport to lower their price when they paid a lot more for it. Yet, if the price goes up and they are still sitting on that fuel, they may raise their prices and try and make a little money. The volumes at most airports are not like the bigger airports, and it’s a tough business. Pilots may want a better price, but the truth of the matter is, those operators are providing a service and they need to make the kind of margins they do or else they wouldn’t be there.”
WEIMAN: How about delivering fuel in Canada?
MCKINNEY: We would like to distribute fuel in Canada, but have chosen not to do so at this time, as there is a lot of paperwork and a lot of different regulations. We have spoken to a number of our suppliers and they have found that it is a lot of work for the effort. Maybe in the future.
WEIMAN: Are there getting to be more above-ground tanks at airports?
MCKINNEY: Yes. Some of our airports still have underground storage tanks, but most are going with above ground tanks, so they can better monitor them. They can easily see if there is an issue right away. And more and more of the above ground tanks have double walls, again for safety.
WEIMAN: Speaking of safety, aren’t fuel tank owners required to be certified?
MCKINNEY: Yes. Fuel tank owners are required to take an online course and exam, which is now a federal mandate. So we are running this program tomorrow. Chris Misiak in our office will be overseeing it. Anyone that owns an underground storage tank has to have a certificate showing they have a basic understanding as to when they have to run tests for tightness, line tests, cathodic protection…whether or not they have a suction pump, a dispenser…all those sorts of things…and inventory keeping. This is our second workshop. We are trying to help our customers and make sure they attend. We have been telling them for two years that it is required, and they can go online and get it done, but there’s something to be said for a structured classroom setting, and setting aside the time to do it. It is one of those requirements the federal government wants everyone to pass. If they don’t get it right the first time, they can retake the exam until they understand their system and pass.
The federal government keeps ramping up the requirements. At first they wanted people to do inventory and tightness tests of their equipment. Now they want owners to actually understand how their equipment operates…so more and more requirements, all of the time.
WEIMAN: As a pilot and aircraft owner, if I go out to the airport and fuel up, is there anything I should do aside from sampling my fuel to make sure I am getting non-contaminated fuel, and is there any way I know I am getting fresh fuel?
MCKINNEY: I can say this about Phillips 66…branded fixed base operators…they are required by Phillips to be doing – at a minimum – weekly samples…checking their filters, and their water defense systems. Phillips 66 is committed to having testing done to make sure fuel meets the required specifications, and is clean and dry. As for unbranded locations, they should be doing it as a good business practice and safety precaution. We also distribute for British Petroleum and Flint Hills Refinery, and all the fuel companies are pushing testing, because God forbid, a plane goes down…everyone gets dragged into a lawsuit.
WEIMAN: How old can 100LL be before it is not fit to use?
MCKINNEY: Typically Phillips likes to see it stored no more than nine months, but it depends on how the fuel is stored. If it is a small airport and we are getting into winter and we know that flying is going to drop off, we do a lot of splitting of loads…helping the small operator get enough fuel to get them through the winter. So we may bring in a couple thousand gallons…whatever they think they need that will get them through the winter, or most of the winter without too much product in their tanks. So if we deliver the fuel in late October, and it carries them through March, that’s only 6 months. But at the same time, they are testing it, and they can make sure the fuel is clean and dry.
WEIMAN: Is there any additive fuel companies can add to avfuel to preserve or stabilize it more, just like we use for a boat or lawnmower?
MCKINNEY: Not that I am aware of. Fuel companies want to keep aviation fuel pure. That’s why we have dedicated trailers. They don’t even want to risk having residue from diesel or bio products. They don’t want any of that touching the fuel, because it can change the fuel’s composition.
A Strong Work Ethic
Like any business owner, John McKinney can be home relaxing and reading the newspaper, and he is still thinking about the business…checking email on his smart phone, etc. Like he said, he has people out there working, 24/7, and customers depending on him.
None of the McKinney children have any interest in the fuel distribution business. Some are still in school, and others are on to different careers in different parts of the country. “But that could change…you never know,” said McKinney.
“It’s a tough business, and very capital intensive. None of us brothers were dragged back into it, but rather chose to return to northern Minnesota as it is a great place to live. But my brothers and I like what we are doing, and we have no plans to do anything else. We want to continue to grow the business and work the business, and that’s what we will continue doing.”
McKinney started out in the fuel business delivering heating oil in the winter, painting curbs at gas stations in the summer, and delivering tires, batteries and motor oil year-round because Best Oil Company was more of a service station in the early years. He even took his turn driving semi.
“You wear many different hats in this business, and because of all of the things I did, I think I understand the business better than someone that just comes in and says, ‘this looks easy!’” said McKinney.
“I’ve worked some of our stores…I’ve worked 7 Eleven stores for awhile…and slowly I ended up spending more of my time working with our wholesale customers and suppliers, and overseeing dispatching and transport operations. My brothers came in later and it fit well to have them involved with our stores. The stores have a lot of detail, and a lot of people, and my brothers are good at what they do. I also look after the trucks and the delivery.
“Every Monday morning, we have a store meeting with our supervisors, and on Tuesday mornings, we have an oil company meeting. The meetings are not long, but it is a time when everyone gets together for discussions on issues at each operation.”
The Gas Station Designed By Frank Lloyd Wright
Best Oil Company owns a gas station in Cloquet that was designed by famed architect, Frank Lloyd Wright, and built over 50 years ago. In fact, the “Lindholm Service Station,” named after John McKinney’s grandfather, has the distinction of being the only gas station ever built that was designed by Wright. The service station incorporates many of the same traits as the homes and office buildings Wright is more known for.
The service station has a unique triangular canopy that covers two gas pumps and creates an arrow, which directs people’s eyes across the street toward the St. Louis River. This was subliminal. It was Wright’s way of connecting the past with the present, with river traffic to vehicular traffic.
The original sign for the station is on top of that canopy. It’s a rocket-like spire, which now displays Wright’s name in his honor.
Lindholm hired Wright to build the service station a few years after he designed and built his home. One of John McKinney’s brothers now lives in that home.
“I think Wright probably pushed it, too, is what I’m hearing,” said McKinney. “Once the house was built, Wright encouraged my grandfather to build the station. In those days, the average two-bay station would cost $5,000. This gas station cost $20,000, copper roof and all.”
Wright sent his apprentice, Robert Pond, now 81, to oversee the building of the Lindholm Service Station because of the unusual angles.
Best Oil Company got into supplying more airports with fuel in part because John McKinney has always been fascinated with flying and took flying lessons years ago and soloed. But demands of the business and other interests have kept him from completing his training. Meanwhile, he takes every opportunity to fly or fly in general aviation aircraft.
Such was the case in 2009 when he was invited to spend a few days at Jeno Paulucci’s fishing camp in Canada. Paulucci was the founder of Jeno’s Pizza Corporation and Chun King in Duluth, Minnesota. The company operated two Beech 18s and a Caravan on amphibious floats until Paulucci died last year and the camp was sold.
For additional information about Best Oil Company, contact John McKinney at 1-800-524-4666.
Best Oil Company is a proud member of the National Business Aviation Association (NBAA) and a distributor for Phillips 66.