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60 MINUTES PIECE ON ENERGY SPECULATION TO AIR SUNDAY NIGHT
This Sunday, CBS News' 60 Minutes program will air an investigative piece on financial speculation in the energy commodities markets and its role in the record-breaking run-up in energy prices experienced last year. NEFI's Immediate past Chairman of the Board Sean Cota, who has testified on this issue on behalf of NEFI and its members before the U.S. Congress and federal regulators, was interviewed for this piece. Dan Gilligan, President of the Petroleum Marketers Association of America (PMAA), Prof. Michael Greenberger (former regulator who spoke at the 2006 Oilheat Visions Conference) and member groups of the Commodity Markets Oversight Coalition were also interviewed. It is unclear if one or all of the interviews will actually make it into the final piece when aired.
60 Minutes airs this Sunday night, January 11th at 7pm ET/PT.
Description from website:
http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml
Preview Video #1
http://www.cbsnews.com/video/watch/?id=4708028n
Preview Video #2 (feat. Dan Gilligan of PMAA)
http://www.cbsnews.com/video/watch/?id=4708861n
NEFI CONTACT: Jim Collura, NEFI VP for Public Policy (jimcollura@nefi.com)
The newly-elected 111th Congress has begun and the new President will be sworn in to office on January 20th.
HOUSE AG CHAIRMAN TO ADVANCE TOUGH NEW ANTI-SPECULATION BILL
NEFI joined the Petroleum Marketers Association of America (PMAA) and other members of the Commodity Markets Oversight Coalition at a private meeting with House Agriculture Committee Chairman Colin Peterson (D-MN) to discuss the legislative outlook for futures market reform legislation. Peterson outlined his plans for bold new legislation to address the issue and told coalition members that he will need their help and the help of their members (including you NEFI members!) to pass meaningful legislation in the new Congress. This is especially true, as the bill will probably see strong opposition by Wall Street trade groups and lobbyists. It may also have to be vetted through the energy and financial services committees, even though Agriculture is the committee that has jurisdiction over commodities regulation. Peterson hopes to have new legislation introduced in the coming week or two. Coalition members will be coordinating and communicating and are hopeful of victory in the new Congress.
NEFI’s immediate past Chairman of the Board Sean Cota (Cota & Cota, Bellows Falls, VT), its Government Affairs Committee Chairman Tom Devine (Devine Bioheat, Norwalk, CT), Vice President for Government Affairs Jim Collura, and PMAA Legislative Director Sherri Cabrera were present at the standing-room only meeting. NEFI and PMAA are working closely together to review the bill to make sure that all of the industry’s priorities are included. Stay tuned for future updates.
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VERMONT'S WELCH JOINS FELLOW NEW ENGLANDER MARKEY IN ENERGY COMMITTEE
Congressman Peter Welch (D-VT) has announced that he has been awarded with a spot on the House Energy and Commerce Committee. The new appointment is an important development, as Congressman Welch has voiced strong support for an array of issues including LIHEAP, heating oil lines of credit, NORA reauthorization and futures market reform (he joined Sen. Levin to introduce the Close the Enron Loophole Act, which was enacted into law last year). Sean Cota, Tom Devine, Jim Collura and Sherri Cabrera met with Welch’s office just before the Coalition meeting with Peterson (see above) and his staff reiterated their staunch support for these top industry issues. Welch has been given a seat on the subcommittee for oversight and investigations, the "watchdog" subcommittee chaired by Rep. Stupak (D-MI) that last year held so many vital hearings on commodity market speculation and alleged manipulation.
Also of note, climate change activist and big oil opponent Congressman Ed Markey (D-VT) was appointed this week to replace Rep. Rick Boucher (D-VA) as chairman of the powerful subcommittee on Energy and the Environment. Boucher had long been seen as an ally of the coal industry, which did not play well with new Energy Committee Chairman Henry Waxman, other energy policy liberals on Capitol Hill and their supporters. While losing his chairmanship, he will retain membership within the committee. Vermont Congressman Peter Welch was also given a spot on Markey’s subcommittee. Welch also holds a seat on the Oversight & Government Reform Committee and the powerful Rules Committee.
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OBAMA APPOINTS THREE MORE 'CLIMATE CHANGE' ACTIVISTS TO CABINET POSTS
Members have responded positively to NEON’s reporting of new appointments for incoming U.S. President Barak Obama's cabinet and top White House officials that are of interest to them. Before reporting on the most recent round of appointments of interest to members, it is worth noting that New Mexico Governor Bill Richardson (D) has withdrawn from consideration as U.S. Commerce Secretary because of an ongoing investigation into political contributions he received in his home state. The Obama team has not yet announced a replacement.
Just before the New Year, President-elect Obama announced three additional appointments for his administration, all of which are known in the political community as "climate change" activists:
- Jane Lubchenco, Administrator, National Oceanic and Atmospheric Administration (Biography)
- Rep. Hilda Solis (D-CA), Secretary of Labor (Biography)
- John Holdren, Assistant to the President for Science and Technology (Biography)
HOW 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, its 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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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 or signing-up for the January 14th (2pm EST) SPCC compliance webinar at www.nefiactioncenter.com
OIL SPILL LIABILITY TAX INCREASES JANUARY 1, 2009
On October 3, 2008, the Emergency Economic Stabilization Act of 2008 (EESA) was signed into law. Included among the many provisions was an increase in the Oil Spill Liability Tax that is levied on each barrel of crude oil delivered to or produced in the United States. The EESA increases the Oil Spill Liability Tax from $0.05 cents per barrel of crude to $0.08 cents per barrel beginning January 1, 2009. Refiners normally pass the tax down as a cost. Petroleum marketers may see the tax broken out as a separate line item on invoices. Often the tax is referred to on invoices as "Federal Environmental Fee" or "Oil Spill Liability Tax." Petroleum marketers need to know the amount of the tax on a per gallon rate for finished product when calculating costs for contract bids. The following chart converts the Oil Spill Liability Tax from the new $0.08 cents per barrel rate to a per gallon rate on finished product:
Conversion Formula: $0.08 divided by 42 (number of gallons in a barrel) = $0.0019 cents per gallon. To obtain the cpg rate on biofuel blends multiply 0.0019 by the percentage of finished product in the blend (the tax does not apply to the biofuel portion) ex: 0.0019 multiplied by 0.90 (% of finished product in E-10) = $0.00171 cents per gallon.
IMPORTANT! The rates above may vary slightly if your refiner rounds to the nearest thousandth of a cent. The rates for the blended products above were not rounded off. For more information, contact Regulatory Counsel Mark S. Morgan, Esq., at mark@nefi.com.
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UPDATE: CITGO ENERGY PROGRAM SET TO BEGIN ON JANUARY 19, 2009
Despite earlier reports in some media that the Citizen Energy Heating Oil Program was being suspended due to a retraction of heating oil contributions from Venezuelan oil company CITGO, the program will in fact continue. In a statement made earlier this week by CITGO Chief Executive Alejandro Granado it was explained that, despite a funding crunch, donations to the Citizens Energy Oilheat Program would not be rescinded. The decision to continue the program "is the result of a strong commitment and a big effort on the part of Citgo and our shareholders in light of the current global financial crisis and its impact on the oil industry in general" said Granado. The announcement came as a great relief to Joe Kennedy, employees of the Citizens Energy Program, low income advocates and low income residents alike. Thank you to the Massachusetts Oilheat Council for contributing to this NEON update. The program is set to begin January 19th, 2009.
Click here to read Joe Kennedy's official statement
Click here to read the "Boston Globe" story
General News
- US DELIVERIES TO SPR WILL RESTART IN 2009 – Deliveries to the SPR were suspended at the urging of Congress and many industry groups, including NEFI and PMAA, last year. Read more.
- FRANKEN MAY BEST COLEMAN IN FINAL MN SENATE RECOUNT – It appears that Democrat Al Franken is poised to replace Republican Incumbent Norm Coleman as Senator from Minnesota. Final recounts show a Franken victory and Senate Democrats may seat him before the state issues a certificate validating the win, giving Senate Democrats a total of 59 seats to the Republicans' 41. Coleman is expected to try and bring the issue to the courts.
- NEFI VP QUOTED ON OBAMA CFTC PICK – NEFI Vice President for Government Affairs Jim Collura was quoted in a Dow Jones Newswires piece on President-elect Barak Obama's pick to head up federal futures regulator, the Commodity Futures Trading Commission (CFTC). Read More.
- DAILY KOS CREDITS CLOSING ENRON LOOPHOLE FOR PRICE DROP – An article in the Daily Kos has credited passage of the Close the Enron Loophole Act, which was supported by NEFI and its coalition allies and passed into law last year, as a factor in bursting of the energy price bubble. Read More.
Heating Fuels
- NATURAL GAS "BULLY" RUSSIA NEARS DEAL AFTER SHUTTING OFF EUROPE –Russia has been getting very aggressive on natural gas, acting almost like a "bully." After leading an historic signing of a charter for a new “Natural Gas OPEC” as we reported in a recent issue of NEON, Russia cut off the Ukraine, effectively shutting down all of Eastern European supply and much of Western Europe. As this issue of NEON went to press, European Union officials were near a deal with Russia to restore the flow of gas into the region. Read more.
- BUDAPEST AIRPORT CONVERTS FROM GAS TO OIL – Hungary’s main airport has converted from natural gas to heating oil after the most recent Russian natural gas crisis, starting what may be a trend of gas to oil conversions throughout Europe, especially Western Europe, which gets 90 percent of its supply from Russia. Read more.
- COAL HEAT MAKING A COMEBACK? New York Times reports on how burning coal as a home heating fuel is making a comeback, up ten percent since last year. Read more.
- PETER BOURNE INTERVIEWED FOR NPR’S MARKETPLACE – NPR’s Kai Ryssdal (Marketplace) interviews NEFI and VFDA member Peter Bourne of Bourne’s Energy (Morrisville, VT). Listen here
- NEFI VP ALSO INTERVIEWED BY NPR ON OILHEAT CONTRACTS – You can hear the story online.
Motor Fuels
- PANEL CALLS ON CONGRESS TO RAISE MOTOR FUELS TAX - The National Commission on Surface Transportation Infrastructure Financing has called for an increase in the gas tax from 18.4 cents per gallon (cpg) to 28.4 cpg, and diesel fuel from 24.4 cpg to 26.4-29.4 cpg.
- MEANWHILE, SOME STATES CONSIDER MILEAGE TAX – Some states like Oregon are considering dropping their motor fuels taxes in favor of controversial mileage taxes, arguing that increased conservation and efficiency does not necessarily mean that transportation infrastructure is being used less. Read more.
- LITTLE GAIN IN SELLING GASOLINE? – A Kansas City newspaper examines the woes of the independent gasoline dealer. Read more.
Biofuels and Alternative Energy
- US WILL FALL SHORT ON BIO MANDATE – Government officials have warned that because of the unexpectedly low growth rate for cellulosic biofuel, the U.S. will fall 17 percent short of the 36 billion gallons 2022 Renewable Fuel Standard. Read more.
- DOE ANNOUNCES $200m FOR ADVANCED BIOFUEL REFINERIES – The DOE plans on making $200 million available for advanced biofuel pilot refineries over the next six years. Read more.
- UNLIKELY ALLIES JOIN TO OPPOSE IMMEDIATE MOVE TO E-15 – A broad group of 14 unlikely allies, from petrochemical groups to environmental advocates, urged the EPA not to move to E-15 without vigorously researching the consequences. Read more.
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• NEFI VP REPORTS SMOOTH TRANSITION TO WASHINGTON, DC AREA
Jim Collura, NEFI Vice President for Government Affairs, is pleased to announce that his transition to the Washington, DC area is well underway and is going fairly smoothly. Collura moved to the area on Monday, January 5th and is already working hard for NEFI and its members. Shortly after arriving and moving into his new home just outside the city, Collura joined NEFI Government’ Affairs Committee Chairman Tom Devine, immediate past Chairman of the Board Sean Cota and PMAA Legislative Director Sherri Cabrera for a breakfast meeting on Thursday, January 8th, followed by meetings on Capitol Hill with House Agriculture Committee Chairman Colin Peterson (see article under “This Week in Congress) and the staff for Rep. Peter Welch (D-VT). Jim Collura can be reached at jimcollura@nefi.com.
Other NEFI news:
• NEFI Legislative & Regulatory Action Center's Communications Specialist David Huffman has changed his name to David Rocco. Members and colleagues should update their records. David's contact information, including his email (dave@nefi.com) remains unchanged.
• 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.
 • 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.nefiexpo.com.
See the Exhibitors for EXPO '09 Go Now
• View the latest edition of Oil & Energy online.
• Chris Delorey of Marketing Associates Financial Service/Telamon is excited to let our members know their employee benefits division has changed their name and address. Chris has been a member for some years now and we are happy to list his new information.
Chris Delorey
Bostonian Solutions
4 Copley Pl. 6th Fl.
Boston, MA 02116
Phone: 617-587-2383
E: cdelorey@bostoniansolutions.com
• Welcome New NEFI Members:
Green Environmental
Mr. Bob Grafton
120 Longwater Dr.
Norwell, MA 02061
Phone: 617-479-0550
Fax: 617-479-5150
Email: lrobertson@greenenvironmental.com
W: www.greenenvironmental.com
Green Environmental provides Site Remediation, Civil Engineering and Environmental Consulting.
Gerner Energy Consultants
Mr. Kip Gerner
15637 York Rd.
Sparks, MD 21152
Phone: 443-465-5803
Fax: 410-472-3313
Email: kip.gerner@gernerenergy.com
Gerner Energy provides Strategic Analysis, planning and implementation of Customer Service development and training, Management team building and training just to mention a few of their services.
CPI Oil
Mr. William Hamill
PO Box U
Chepachet, RI 02814
Phone: 401-568-8874
Fax: 401-568-8803
Email: bhamill@concreteproductsinc.com
CPI is a Retail Fuel Dealer providing Diesel off road and over the road.
The Mack Services Group
Mr. Tim McCorry
PO Box 557
Berwyn, PA 19312
Phone: 610-644-0562
Fax: 610-889-1369
Email: tmccorry@mackservicesgroup.com
Web: www.mackservicesgroup.com
Mack Services is a Retail Fuel Dealer providing Kerosene, Gasoline and Propane along with Diesel off road and over the road.
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2009 North American Heating and Energy Expo
June 9-10, 2009
Hynes Convention Center, Boston, Mass.
Sponsor This Newsletter!
NEFI would like to thank this month's NEON Sponsor, www.nefiexpo.com
For maximum exposure, your company logo and link should be on the front page of this newsletter next month. View sponsorship info and enrollment form. Call Tracy at 617-923-5015 or email tracy@nefi.com for more information.
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NEFI Member Benefit Spotlight
DID YOU MISS OUT?? DON’T WORRY IT’S NOT TOO LATE.
You can still sign up for NEFI’s Weather Subscription Service (initiated on January 1, 2009)
Only $50.00 per year for the first Member Company. Sign up today by visiting www.nefi.com and clicking on the "Pay NEFI Online" tab, OR by 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 150+ Member companies have already signed up. Why miss out on having up-to-date Weather Information at your fingertips?
Join or renew membership with NEFI today! Click here, or contact Joanne Sharkey, NEFI Membership Coordinator at (617) 924-1000 or joanne@nefi.com.
View NEFI Membership Information
NEFI WEBINARS:
In July of 2008, the New England Fuel Institute began using a form of internet technology to better communicate with its members. It is called a "webinar" (web-based seminar). Since July, NEFI has decided to continue using webinars and now has multiple projects planned. In addition to SPCC, some other subjects might include 401(k), Department of Transportation regulations, employment, drug testing and diesel exhaust fluid (urea diesel additive). We are very interested in knowing what interests you. If you have any thoughts on topics that should be covered contact Dave Huffman at dave@nefi.com or 617-923-5022.
SAFETY VESTS NOW AVAILABLE:
The Federal Highway Administration has required workers within the right of way of any federal aid highway to wear high visibility safety vests since November 24, 2008. The NEFI Action Center has a bulletin available on this at www.nefiactioncenter.com. It is available in the Federal Regulations section (MEMBERS ONLY). In addition to informing its members on this regulation, we have located a vendor: W.S. Emerson of Brewer, Maine. They are NEFI members and their contact information is below:
WS Emerson Company
Phone: 207-989-3410 / 800-789-6120
Fax: 207-989-8540
Email: donw@wsemerson.com
15 Acme Rd, Brewer, ME
www.wsemerson.com
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Last Week for Educational Survey
The National Oilheat Research Alliance is currently striving to revamp the education process. NORA's goal is to collect quantitative information about educational tools already in place at NORA. NORA has created a survey that focuses on both opinions and factual data needed to improve the education practices at NORA. You can link to the survey below. The survey has been posted for over a month. Getting the survey complete is vital in assuring progress in the Oilheat industry. The survey will be disabled on January 14, 2009, so give your opinion as soon as possible.
Participate in NORA's online education survey.
Navigating the Oilheat Marketplace
The United States sources of heating oil are domestic refineries and imports from foreign countries. Refineries produce heating oil as a part of the "distillate fuel oil" product family, which includes both diesel fuel and heating oil. Distillate products are shipped throughout the United States by pipelines, barges, tankers, trucks and rail cars. Most imports of distillate come from Canada, the Virgin Islands and Venezuela.
Heating oil is traded on the commodities market just like other home heating fuels. This means heating oil cost is subject to fluctuations, just like the stock market. The price of crude oil has the biggest impact on the price of wholesale heating oil. Due to the variations in crude oil prices, dealers are generally price takers on any given day.
Heating oil like any energy product responds to supply and demand fundamentals, such as cold or warm weather. Additionally, heating oil prices in this country may be affected by a supply disruption in oil producing country, or even cold weather in Europe. On a daily basis, heating oil prices can vary widely.
Prices can change for a variety of reasons including:
Seasonality in the demand for heating oil - When crude oil prices are steady, home heating oil prices tend to slowly rise in the winter months when demand is highest.
Changes in the cost of crude oil - Crude oil is a major price component of heating oil, changes in the price of crude oil will generally affect the price of heating oil.
Competition in local markets – Competitive differences can be substantial between a locality with only one or a few suppliers or dealers versus an area with a large number of competitors.
Regional operating costs - Prices also are impacted by higher costs of transporting the product to remote locations.
Retail Price - Prices move up or down during the heating season; retail price customers are not locked into a set price as they are with a Price Protection Program. The retailer typically sets his price for the day, and then deliveries are made at that price.
As a result of the competitive nature of the industry there are many different pricing alternatives. It is important for customers to understand their pricing options and pick the one that is best for their family.
For information on NORA please contact Traci Ross at tlross@nora-oilheat.org
See the latest NORA news at www.nora-oilheat.org.
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Thank You NEFI Action Center Contributors:
Thank you to 2008 LRAC contributors to date.
Please support LRAC Center efforts by downloading and acting upon this pledge form or by contacting NEFI at (617) 924-1000.
You may also donate online!
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