NEON: NEFI Energy Online News

NEFI VP FOR GOVERNMENT AFFAIRS RELOCATING TO WASHINGTON
The New England Fuel Institute (NEFI) is pleased to inform members that it will be relocating its Vice President for Government Affairs, Jim Collura (jimcollura@nefi.com), to Washington DC effective January 5, 2009. Collura will continue to work for NEFI in his current capacity, just a little "closer to the action," said NEFI President & CEO Shane Sweet (shane@nefi.com). "This is an opportunity for us to work even closer with DC-based Regulatory Attorney Mark S. Morgan, Esq., and further develop our collaboration with industry partners such as the Petroleum Marketers Association of America," Sweet said of the move. Congress, federal regulators and the new administration are expected to move quickly on big issues including tax reform, energy and climate change policy, futures market oversight and other important issues for our members. "The more boots on the ground, the better," Sweet said, clearly seeing Collura's relocation as a means of supporting collective industry efforts on federal issues. Vice President Jim Collura came to NEFI from Washington, DC, in 2005 after having worked briefly in the U.S. Senate for New Hampshire Senator Judd Gregg and for several years in the government affairs office at the U.S. Conference of Catholic Bishops. Collura will take up residence in his former neighborhood of Silver Spring, Maryland, just a mile outside the capital.

THIS HOLIDAY, YOU CAN HELP CONTRIBUTE TO THE 'INDUSTRY’S CAUSE'
Wondering how you can contribute to the great work done by the New England Fuel Institute, it's Legislative & Regulatory Action Center, Government Affairs Committee and various coalitions, partnerships and alliances? With the new Congress, new President and possibly the most ambitious legislative and regulatory agenda in history on the horizon, your help is needed now more than ever! Please consider a contribution--even a small contribution of $100 or $300--to the NEFI Action Center Fund. Simply visit www.nefiactioncenter.com and click "Make a Donation" (NO log-in or password required) which is in bold red font in the menu on the left side of the screen. When the "Contribution/Pledge Form" page opens, simply fill out the desired donation amount, billing information and contact information fields and click "submit contribution." Donors can either choose to be billed for their donation or may use a credit card (we accept Visa, MasterCard and American Express). Remember that our pledge forms list suggested donations only. A full list of 2008 contributors can also be found at the bottom of the main page at the NEFI Action Center site. If you have any questions concerning the donation process, contact Dave Huffman at NEFI at (617) 923-5022 or dave@nefi.com. Thank you for your support!

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NEFI CONTACT: Jim Collura, NEFI VP for Public Policy (jimcollura@nefi.com)

The 110th Congress is no longer in session. The newly-elected 111th Congress will take office on January 3rd and the new President will be sworn in to office on January 20th.

PRESIDENT-ELECT FILLS MORE POSTS THAT WILL IMPACT INDUSTRY CONCERNS
As was mentioned in the last issue of NEON, President-elect Barack Obama announced his energy and environmental policy team. This week, Obama filled some of the remaining vacancies in his cabinet for positions that will also have an impact on the energy industry.

Secretary of Agriculture, Gov. Tom Vilsack (D-IA) – Vilsack is known for his staunch support for biofuels. On this issue, Vilsack may at times find himself at odds with newly designated Energy Seceretary, David Chu, who is skeptical of conventional biofuels, such as corn ethanol, but both Vilsack and Chu are supportive of new-age biofuels, such as cellulosic fuels. Biography (via NYT)

Secretary of the Interior, Sen. Ken Salazar (D-CO) – As head of interior, Salazar will manage U.S. federal lands, including lands sought after for potential oil and natural gas recovery. While generally seen as a centrist Democrat that is sympathetic toward off-shore drilling, Salazar has opposed drilling in the Arctic National Wildlife Refuge (ANWR). Biography (via NYT)

Secretary of Transportation, Rep. Ray LaHood (R-IL) – A surprise pick, Republican LaHood has experience on these issues having served on the House Transportation and Infrastructure Committee. Among the greatest challenges facing LaHood are our nations’ crumbling infrastructure and a nearly insolvent federal highway fund. Biography (via NYT)

Chairman, Securities & Exchange Commission, Mary Schapiro - The choice of Schapiro is seen as a signal that the administration is serious about potentially merging the SEC and the CFTC, a move that many Commodity Market Oversight Coalition allies are skeptical about. Nonetheless, Schapiro seems sincere about her desire to reform Wall Street oversight and bring new accountability, which leaves us cautiously optimistic. Background Story (Bloomberg News)

Chairman, Commodity Futures Trading Commission, Gary Gensler – From the perspective of Wall Street investment bank involvement in commodities trading, it is hard for us not to be disappointed about the selection of Gensler as CFTC chair. He is an ex-partner at Goldman Sachs and is generally thought of to be pro-investor. NEFI has called for a Commodity Market Oversight Coalition Allies conference call early next week to discuss the choice and coalition strategy moving forward. Background Story (Bloomberg News)

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110TH CONGRESS CLOSES FOR BUSINESS AND AUTO INDUSTRY MAY JOIN THEM
The 110th Congress has closed for business having failed so far to move on a bill to provide financial assistance to the ailing U.S. automotive industry. The $14 billion so-called "bailout" package stalled after a failure by lawmakers, industry and organized labor to reach a deal. This week Ford and Chrysler have announced they will shut down operations for the month of January, with Chrysler closing all 30 of its plants until January 19th and put a hold on salaries for its union employees. General Motors had warned that unless it receives financial assistance by year’s end, it would go bankrupt. They have this week announced that they are stopping production of engines needed for the plug-in electric Chevy Volt. The White House supports financial assistance for the industry but has thus far opposed using funds from the Troubled Assets Relief Program (TARP), which were provided the president from the so-called "Wall Street" bailout approved by Congress this fall. President Bush is apparently looking for a short term "fix," which would allow the next President and Congress to revisit the issue and renegotiate the terms of a bailout. Expect this, along with a new economic stimulus spending bill, to be the top issues for a new U.S. Government this January, and one of the first real tests for a new President. The fate of the auto industry and a new stimulus bill could have potentially very deep repercussions on the broader U.S. economy.

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AIR QUALITY OFFICIALS MEET WITH INDUSTRY OVER LOW SULFUR HEATING OIL
Industry groups and representatives met with regional air quality officials in Baltimore, Maryland this week to discuss the near-term phase-in of lower sulfur heating oil. The Northeast States for Coordinated Air Use Management (NESCAUM) and the Mid-Atlantic/Northeast Visibility Union (MANE-VU), which includes air quality officials from six New England states, New York, Pennsylvania, Maryland, Delaware, New Jersey and the District of Columbia, have advocated for a proposed "Northeast Low Sulfur Initiative" for years that would see a reduction of heating oil in the region to 500 parts per million (ppm), or "low sulfur," and then a move to 15ppm ("ultra-low sulfur") several years later. Industry groups including the New England Fuel Institute, Petroleum Marketers Association of America and representatives from the National Oilheat Research Alliance, several state groups and heating oil retailers from around the region were present at the meeting. The representatives of the oilheat industry noted that the lower sulfur fuels would be a significant benefit to the consumers of heating oil. It will reduce maintenance costs, improve efficiency, and lead to a new generation of ultra-efficient heating oil equipment. Representatives of the refining industry and retailers described the supply picture into the region and how important it is to give adequate time to ensure that such a standard is adopted without a significant increase in price. Terminals and suppliers, including Global and Irving, were also instrumental in providing their insight on the supply and storage issues that might arise with a lower sulfur mandate. More on this issue as it develops.

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Contact: Mark Morgan, Esq. NEFI Regulatory Counsel (mark@nefi.com)

REMINDER!!! Get briefed on the current and newly amended SPCC Requirements by either reading the latest compliance documents published by NEFI and sign-up for the January 14th (2pm EST) SPCC compliance webinar at www.nefiactioncenter.com

PARKED TRUCKS AND SPCC COMPLIANCE: ANATOMY OF THE INDUSTRY VICTORY
As members are aware, NEFI won a major victory for the industry this month when the EPA published a final rulemaking that removes parked cargo tank trucks containing product from SPCC sized secondary containment requirements. Due to NEFI's efforts, heating oil dealers were spared thousands of dollars in compliance costs. How did this happen? It started with you. Last year, a heating oil dealer called ICPA's Gene Guilford, who ultimately got word to NEFI President & CEO Shane Sweet, regarding an unprecedented enforcement problem. The EPA had levied a heavy fine on him for not providing sized secondary containment for his cargo tank vehicles containing product that were parked overnight at his facility. Though this requirement has always been on the books and discussed by NEFI's Government Affairs Committee, it was rarely, if ever, enforced. The committee and regional state association executives immediately understood that this dealer's problem, however isolated, could lead to widespread enforcement action across all of EPA Region I (New England) and other regions of the country. NEFI made the goal of changing the parked truck requirement a top priority for 2007 and 2008.

The challenge was to win change without unleashing widespread enforcement actions throughout New England. NEFI Legal Counsel advised against a lawsuit as unwise, unwinnable and likely to bring enforcement of the parked truck requirement down on all marketers throughout New England and elsewhere. Instead, the NEFI Government Affairs Committee (GAC), lead first by Chris Keyser (Owner Services, Rutland, VT) and later by Tom Devine (Devine BioHeat, Norwalk, CT), developed a well thought out strategy to change the SPCC requirement without risking enhanced enforcement against all dealers. A two-pronged effort was launched. The first step was to find an interim solution for the dealer who was facing enforcement. NEFI talked with enforcement officials at Region I on numerous occasions trying to come to a mutual agreement. Scattering trucks to different locations or emptying them at the end of the day would allow the dealer to forgo installing expensive secondary containment equipment while NEFI sought a permanent "fix."

Step two was to take the issue to Washington. NEFI Regulatory Counsel Mark S. Morgan, Esq., met with EPA officials, made the case that sized secondary containment was unnecessary for parked trucks and asked that a rule change be made. Morgan used a pending proposed rule as the vehicle to make its case for exempting trucks from sized secondary containment. NEFI argued in its comments to the EPA that parked trucks should only be required to comply with general secondary containment requirements rather than the more onerous sized secondary containment. Instead of expensive structures designed to contain a catastrophic release of product from the largest compartment in the cargo tank, dealers would only be required to plan for the most likely release, in most cases a leaky valve requiring nothing more than absorbent material or a drip pan. The EPA agreed with NEFI and made the necessary changes in the final rule.

In the end, the strategy developed by the NEFI Government Affairs Committee (GAC) paid off. A victory was achieved within a year and one half and EPA Region I held off on widespread enforcement against all dealers in New England. As a result, heating oil dealers nationwide were spared the cost of adding expensive sized secondary containment equipment for parked cargo tank vehicles--and it was all possible because of one call from a heating oil dealer with a problem. For this victory, thanks are due to all GAC members and NEFI staff, but credit is especially due to Regulatory Counsel Mark S. Morgan, Esq., for his outstanding work and countless hours of effort. Mark can be reached at mark@nefi.com.

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FHA: HIGH VISIBILITY SAFETY VESTS REQUIRED FOR DRIVERS ON FEDERAL HIGHWAYS
The Federal Highway Administration (FHWA) this week clarified who must comply with a new rulemaking requiring workers on foot within federal aid highway right-of-ways to wear high visibility reflective vests. NEFI Regulatory Counsel Mark S. Morgan, Esq., asked for clarification of the rule as it applies to petroleum cargo tank vehicle drivers. The FHWA clarified that the rule applies to all workers, including petroleum cargo tank vehicle drivers who stand in the right of way of a federal aid highway while performing their duty. While the FHWA interpretation is somewhat at odds with the language of the rule, the vest requirement is not expected to apply to most petroleum cargo tank vehicle drivers. The most likely situation where a driver is required to wear a safety vest is when a cargo tank vehicle or other service vehicle is parked in the road to unload product, such as delivery of home heating oil or diesel fuel and gasoline to road construction sites. Even in these situations, the road must be a federal aid highway in order for the vest requirement to apply. State Departments of Transportation can provide lists of federal aid highways upon request. Under the FHWA rule, all workers standing within the right-of-way of a federal aid highway must wear high visibility safety apparel, specifically, ANSI Class 2 reflective vests. The rule was written to protect emergency responders, highway maintenance employees and construction workers from vehicular traffic while working within the right of way of federally funded highways. These vests are available through NEFI member W.S. Emerson (www.wsemerson.com or 800-789-6120). NEFI has published a compliance bulletin on the subject that is available to members at www.nefiactioncenter.com or contacting dave@nefi.com or (617) 923-5022.

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CLARIFICATION ON NEW EPA SPCC TANK INTEGRITY TESTING REQUIREMENTS
There have been many inquiries concerning tank integrity testing provisions under the new SPCC amendments published by the EPA on December 5. It is important to remember that the SPCC amendments do not alter a PMAA settlement agreement with the EPA on tank integrity testing. Under the agreement, a visual inspection for leaks qualifies as an alternative method of compliance to more invasive tank integrity test methods--provided the tanks are shop-fabricated with a capacity of 30,000 gallons or less and all sides of the tank are visible during inspection. For tanks sitting on the ground, the combination of visual inspection and placement of a barrier between the container and the ground, designed and operated in a way that ensures that any leaks are immediately detected, is also an alternative method of compliance. Under the SPCC regulations, before an alternative method of compliance can be used, a professional engineer (PE) must first approve the method and include in a written SPCC plan justification of why it is as "equally protective of the environment" as the recommended method in the rule. Once this is done the tank owner or operator may conduct the visual testing. On the other hand, the SPCC amendments include a new visual inspection standard as a recommended method of compliance with tank integrity testing requirements. Specifically, the EPA recommends use of the Steel Tank Institute's SP-001 Standard for Inspection of Aboveground Storage Tanks for tank integrity testing. As a recommended method of compliance, there is no requirement that the method be approved or justified by the PE in a written SPCC plan. However, under STI SP-001 only a certified inspector may conduct the visual testing. These differences are important to petroleum marketers when evaluating which integrity test method to select. PE's should be made aware that the PMAA settlement agreement is a viable alternative to SP-001.

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General News

FORTUNE MAGAZINE: OIL SPECULATION IS BACK - From the article, "There's more of it today that there ever was this summer. And this time around, it is making oil really expensive." Read More
CFTC STARTS RULEMAKING TO CLOSE "ENRON LOOPHOLE" - The Commodity Futures Trading Commission has begun the rulemaking process to implement "close the Enron Loophole" provisions of NEFI-backed legislation that was signed into law earlier this year. The rule will increase oversight of certain exempt trading platforms. NEFI will join allies in submitting comments regarding the new rule.
Read More
KEY LAWMAKER BRIEFS COALITION ON MARKET OVERSIGHT LEGISLATION - House Agriculture Chairman Collin Peterson (D-MN) briefed members of the Commodity Markets Oversight Coalition (CMOC) on Wednesday, December 17th. Peterson said he will bring stronger new commodities trading legislation to the floor next year, and asked groups for their support. NEFI VP for Government Affairs and CMOC coordinator Jim Collura participated in the call, which was arranged by the National Farmers Union, also a coalition member.
PMAA DAY ON THE HILL - The Petroleum Marketers Association of America will be holding its annual Day on the Hill and Washington Conference on May 13-15, 2009 in Washington, DC. Contact your state association about participation or click here for more information. NEFI Chairman Chris Keyser (Owner Services, Proctor, VT) and VP for Government Affairs Jim Collura participated in the meeting by phone.

Heating Fuels

PMAA HEATING FUELS DIVISION MEETS - The Petroleum Marketers Association of America's Heating Fuels Division, chaired by Bob Boltz (Vincent R. Boltz, Inc of Lebanon, PA) met in Baltimore, Maryland on Wednesday, December 17th to discuss top industry issues going into next year.

Motor Fuels

EXXON MOBIL BOOSTS DIESEL FUEL OUTPUT - This story from the Associated Press reports that Exxon Mobil will invest over $1 billion to increase diesel fuel production by 10 percent. Read More
LOCK-IN PRICING FOR GASOLINE? NEFI member and supporter Gulf Oil (Newton, MA) is working on a program that would allow drivers to lock-in gas prices. Read More

Biofuels & Alternative Energy

BUILDING ENERGY '09 - The annual conference and trade show for renewable energy and green building professionals, Building Energy '09, is now accepting exhibitor and attendee registrations. The event is sponsored by the Northeast Sustainable Energy Association, and will be held March 10-12, 2009 at the Seaport World Trade Center, Boston, MA. Info at http://nesea.org/be09.
BIODIESEL PUMP LABELS REQUIRED -The Federal Trade Commission (FTC) set December 16, 2008 as the date due date for biodiesel pump labels. If you have not yet ordered these labels, they are available at www.biodieselpumplabels.com or by contacting Dave Huffman at 617-923-5022 or dave@nefi.com.
DIESEL FUEL FROM COFFEE GROUNDS - The search for unconventional fuel sources got weirder when University of Nevada at Reno successfully produced diesel fuel from coffee grounds. Read More

• PMAA PAC SILENT AUCTION TO BE HELD AT EXPO
After a successful silent auction fundraiser at VISIONS 2008 that raised over $5,000 for the Petroleum Marketers Association of America's Small Business Political Action Committee (PAC) fund, NEFI will hold another silent auction fundraiser at next year's EXPO, to be held on June 9-10 at the Boston Hynes Convention Center. Proceeds will again benefit the PMAA Small Business PAC, which supports candidates for public office that share our industry's national goals. Past donations have included a variety of Items ranging from sports memorabilia to power tools and much more! If you would like to contribute an item for the silent auction, contact Jim Collura at jimcollura@nefi.com or call (617) 923-5016. For more information on the EXPO and reserving a booth click here, or contact Tracy Goodwin at tracy@nefi.com or (617) 923-5015.

• NEFI GOVERNMENT AFFAIRS
NEFI Government Affairs Committee Chairman Tom Devine (Devine Bioheat, Norwalk, CT) moderated a committee conference call at 3pm EST on Thursday, December 11, 2008. Industry groups from around the region and PMAA participated in the call, which is held every month to coordinate, collaborate and communicate on industry-related public policy issues, including new legislation, regulations and regional industry issues.

• The New Year is Almost Here. Don't miss out on signing up for NEFI's Weather Subscription Service: Available from NEFI starting January 1, 2009. Only $50.00 per year for the first Member Company contact. Sign up today by visiting www.nefi.com and clicking on the "Pay NEFI Online" tab, or contacting Betty Kelley, Administrative Manager, betty@nefi.com or Direct Dial # 617-923-5013
FREE 30 day Trial: try it for 30 days at no charge

Over 100+ Member companies have already signed up. Why miss out on having up-to-date Weather Information at your fingertips!

• The 2009 North American Heating and Energy Expo is scheduled for June 9-10, 2009 at the Hynes Convention Center, Boston. Sixty-five percent of booth spaces are sold and the most prominent spaces are going fast. Associate members and past exhibitors have priority, so make sure to reserve your booth space now! For information and to reserve online go to www.nefi.com/expo.

See the Early-Bird Exhibitors for EXPO '09 Go Now