Family-Owned Heating Oil Company Testifies Before U.S. Senate

"The day to day operating costs of running a [heating oil] business keep going up. As a small business owner, it pains me to think about how my employees and family will suffer if my business fails. We are being squeezed from all directions."
-- Sandra Farrell of Northboro Oil
before the U.S. Senate Small Business Committee

On Wednesday, June 25, the U.S. Senate Small Business Committee heard testimony from heating oil industry representatives on the challenges facing the heating oil industry. In his opening statement, Committee Chairman John Kerry (D-MA) said that the federal government needs to act to so that small business heating oil dealers "impacted by these rising energy prices have access to capital so that they can weather this storm, and so the six million families in the Northeast that rely on heating oil stay warm in the winter will be safeguarded from supply disruptions."

Chairman Kerry and Ranking Member Snowe (R-ME) heard testimony from Michael Ferrante, President of the Massachusetts Oilheat Council and Sandra Farrell, owner of Northboro Oil Company in Northboro, MA. Ferrante elaborated on the numerous challenges facing the heating oil dealers in the region, including strained credit lines and customer receivables, less offers of price protection programs, surging credit card fees, gas utility encroachment into the market, harmful LIHEAP leveraging programs and burdensome regulation. Mrs. Farrell from Northboro Oil, who is both on the NEFI Board of Directors and the Government Affairs Committee, delivered a moving and compelling testimony, as she elaborated on the struggles that family owned and operated heating oil companies now face.

Senators Kerry and Snowe have introduced NEFI-backed legislation that would strengthen the heating oil reserves in the northeast and open up new $1.5 million loan guarantees to heating oil, propane and kerosene dealers. NEFI is working with PMAA and allies on Capitol Hill to advance this legislation.

Read testimony and watch a recorded video of the hearing.

NOTE REGARDING THE HEARING VIDEO: Hearing begins 21 minutes into the video, due to an error. Real Player is required for the video. Obtain real player free.

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Victory! House Passes Bill Ordering CFTC to Get Tough on Speculation
Late Thursday, June 26 the U.S. House of Representatives passed the "Energy markets Emergency Act of 2008" (HR 6377) by an overwhelming vote of 402-19. The bill orders the CFTC to take emergency action to address excessive speculation, unregulated swap transactions, and price distortion in the markets. The bill sends a message to energy traders that more legislation is to come!

In a related story, during a hearing this week, CFTC Chairman Walt Lukken, agreed to look into speculation in a new report due out September 15th. The CFTC is clearly buckling under the pressure from Congress, the media and various industries (including fuel dealers). The report will deal with the "scope of commodity index trading in the futures markets" and will have "recommendations for improved practices and controls should they be required."

GET ACTIVE AND GET YOUR CUSTOMERS ACTIVE! VISIT WWW.STOPOILSPECULATORS.COM

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ICPA’s Guilford Joins Financial Experts In Condemning Speculation
Experts gave testimony before the House Committee on Energy Subcommittee for Oversight and Investigations on Monday, June 23. Among the witnesses was Gene Guilford, who testified on behalf of the Independent Connecticut Petroleum Association and the New England Fuel Institute. Guilford elaborated on the challenge posed by the surging cost of product, and made recommendations on what the Congress can do to help. "Small, independent gasoline, diesel fuel and heating oil dealers continue to hold out hope that government will act soon to mitigate the speculative bonanza in the futures markets," Guilford said. "These people need access to the credit required to purchase gasoline, heating oil and other essential fuels to meet the needs of their customers, and in the current environment, many struggle to do so." View his complete testimony.

A number of financial experts testified, including Michael Masters of Masters Capital Management. His position was clear: Investment, not market fundamentals, is the driving force behind exorbitant oil prices. "We’re not talking about a bubble," he said. "We’re talking about a tumor." Fortunately, Masters was optimistic about lowering prices and even laid out a detailed plan. First, he wants shares of West Texas Intermediate to be overseen by the CFTC and not foreign regulatory agencies. Second, margin requirements need to be made much higher. Currently, they are often as a low as 5%. Finally, investment banks need to be reclassified as speculators. Under their present classification, investment banks are able to avoid position limits. This, some experts think, could lead to market manipulation. Mr. Masters went on to say that with the adoption of these proposals, there could be a significant drop in the price of sweet, light crude. He claims that if enacted, the price could drop within 30 days by as much as $70 (Business Week).

Here is an interesting fact mentioned during the hearing: In 2000, speculators accounted for about 37% of NYMEX oil futures. Presently, they account for 71%!!! Fadel Gheit of Oppenheimer testified saying "I firmly believe that the current record oil price in excess of $135 per barrel is inflated. Crude oil prices should not be above $60 a barrel." He went on to say that of the $65 increase in the past year, only about $10 - $15 is attributable to the decrease in the dollar. This is significant because the falling value of the dollar is often cited as one reason why the price of oil has climbed so high.

Read witness testimony or watch the video of the hearing.

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Bioheat^® Receives ASTM Approval
The efforts of the National Oilheat Research Alliance (NORA), the National Biodiesel Board (NBB), industry groups and the Oilheat manufacturers led by R.W. Beckett met with success in Vancouver Canada last week, as ASTM approved a 5 percent blend of biodiesel in heating oil.

This effort has been underway for several years, when NORA and NBB identified state and national regulations that could have prevented the use of biodiesel in heating oil applications. John Huber of NORA stated that "Bioheat^® provides a critical opportunity for the Oilheat industry to reposition itself as the green renewable fuel of the future, and that knocking down regulatory barriers was essential."

In that effort, NORA and NBB conducted a multi-layered fact finding process that required a thorough analysis of the fuel, how it would work in equipment, and that it would provide Oilheat customers with a fuel that would heat their homes throughout the winter. Paul Nazzaro of NBB stated "We are very excited about the development, and based on the research conducted over the years, and its thoroughness, we know that Bioheat will be as good as Oilheat in every area, but also provides the Oilheat industry a great path to the future."

In addition to the efforts of NBB and NORA in this effort, Vic Turk of R.W. Beckett championed the process, as Chairman of ASTM's Burner Fuels Subcommittee. Moving through the process he was assisted by Steve Howell of NBH. In addition to Beckett, the other leading burner manufacturers Carlin, and Riello invested a great deal of time in testing their burners with this new fuel.

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General News

• Saudi Arabia announced last weekend it will increase their output by 200,000 bbls per day to 9.7 million bbls per day. Despite the increases, crude rose higher, reaching over $140 this week. OPEC President Chakib Khelil believes it could rise to $170, but said OPEC producers are ready to increase production. READ MORE

• Even if the ban on off-shore drilling were to be lifted, there appears to be a shortage of ships needed for the process. READ MORE

• An investment research firm has warned that speculation could destroy the world economy. READ MORE

• Presidential Candidate Barak Obama has joined the rallying cry to curb market speculation. READ MORE

Heating Fuels

• Mass Oilheat Council's Michael Ferrante warns heating oil customers to budget now on Boston Channel 5 WCVB (ABC). WATCH VIDEO

• MA and RI officials are opposing Liquefied Natural Gas (LNG) terminals. READ MORE

• Northeast Governors are pushing for $5 billion in federal LIHEAP aid for next winter. READ MORE

Motor Fuels

• Debit pay-at-pump poses new problems for some consumers. READ MORE

• Boston.com article reports on how fuel prices are affecting the independent gasoline marketers. READ MORE

• Associated Press reports that Premium Gas sales are tanking. READ MORE

• A "Send Your Gasoline Bill to Congress" campaign has been announced by Consumer Watchdog. READ MORE

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• Jim Collura, NEFI VP for Public Policy was in DC this week attending hearings on speculation and meeting with key Congressional staff. He also provided support to Michael Ferrante and Sandra Farrell as they testified before the Senate Small Business Committee.

• NEFI Member Burke Holds E85 Grand Opening -- Dennis K. Burke, Inc., had a ribbon cutting ceremony on June 26th at their new biofuels center in Chelsea, Massachusetts. The celebration marks the first station in Massachusetts to offer E85 Ethanol at the pump. The station already has the distinction of being the first in Massachusetts offering biodiesel at the pump.

Thursday’s ceremony was hosted by company President, Ted Burke and Chairman of the Board, Ed Burke. Chelsea City Manager Jay Ash emcee'd the event. NEFI’s Shane Sweet, President & CEO; Mike Markarian, VP for Education; Tracy Goodwin, VP for Events; and Christine Vieira-Trant, Controller were in attendance.

• FTC Regulations will require new labeling for biodiesel pumps by December 16, 2008. NEFI will be offering these decals, which are currently being designed to meet FTC requirements. Decals may be purchased at www.biodieselpumplabels.com.

• Spill Prevention, Control and Countermeasure (SPCC) WEBINAR: NEFI will be holding a SPCC compliance webinar on July 24, 2008 at 10:00AM. This will cover the new SPCC plan changes required by July 1, 2009 (one year out!) and explain what is expected of fuel dealers. It will be hosted by NEFI Regulatory Counsel Mark S. Morgan, Esq. For more information, contact Dave Huffman at dave@nefi.com or call 617-923-5022.

July 23: NEFI's Executive Committee Meeting (9am-12pm) and Open Board of Directors Meeting (1:30pm-3:30pm), Sheraton Providence Airport Hotel, Warwick, RI. Phone 617-924-1000

Learn How to Grow and Diversify Your Fuel Business in Challenging Times
Register Now to Attend Visions 2008

• The 2008 Visions Conference will be held at the Hilton Boston Logan Airport Hotel in Boston, MA on September 8-10, 2008. The program is taking shape and information and registration are available at www.visions2008.org. Tracy Goodwin, NEFI VP for Events, is pulling together the details. Craig Snyder of Wesson Inc., and Don Craft, industry consultant, have headed up the development of the new Visions event. View Visions headline presentations.


• Carini to be Honored by PMAA at Visions
Peter Carini, CEO and Chairman, Champion Energy Corporation, New Rochelle, NY, has been selected to be awarded the Robert Greenes Award, PMAA's special award for leaders in the Oilheat industry. "Peter has been an exceptional leader in the Oilheat industry for decades," said marketer Bob Boltz, Director of PMAA’s Heating Fuels Division. The award will be presented at the Oilheat Visions Conference scheduled for September 9, 2008 in Boston, MA. The Greenes Award is named in honor of legendary Oilheat marketer Bob Greenes who exemplified leadership and made innumerable contributions to the industry.



• The 2009 North American Heating and Energy Expo is scheduled for June 9-10, 2009 at the Hynes Convention Center. Booth sales are underway and the most prominent spaces will go fast. Associate members and past exhibitors have first pick, so make sure to reserve your booth space now! For information and to reserve online go to www.nefi.com/expo.



• Sign up for NEFI's 2008 Fall Energy Conference to Napa Valley, September 23–28, 2008. The trip is doing extremely well and is sure to be a sell out. Act fast while space is still available. Please call Tracy Goodwin, NEFI VP & Dir. of Events at 617-923-5015 or email tracy@nefi.com if you are interested in joining NEFI and your industry colleagues on a trip to the beautiful wine country of northern California. For Details

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Sponsor This Newsletter!
NEFI would like to thank this month's NEON Sponsor, Beckett Corporation. 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

NEFI Members Entitled to Benefits With Oil Price Information Service (OPIS)
This is a reminder that NEFI members are entitled to a list of benefits as part of the affinity relationship OPIS (www.opisnet.com) has with NEFI:

Oil Express Newsletter
For over 30 years, the nation's only independent petroleum marketing weekly newsletter, geared to increasing profit margins, expanding businesses, exploring profit centers and avoiding regulatory pitfalls.

NEFI MEMBERS: $482 ($75 savings). Current subscribers may extend subscriptions at this rate. Contact OPIS Customer Service toll free (877) 210-4287.

OPIS Newsletter
This weekly national newsletter has been guiding marketers, suppliers, refiners and bulk fuel end-users through volatility for over 28 years. This year alone, over 100 billion gallons of fuel purchased will be pegged to the OPIS Price Index. One year (52 issues) includes OPIS rack prices by PADD.

BENEFIT OR DISCOUNT: $1,175/year (newsletter plus one PADD) ($100 savings). Current subscribers may extend subscriptions at this rate. The exclusive OPIS Executive Planner is included with your paid subscription. Contact OPIS Customer Service toll free (877) 210-4287.

OPIS Ethanol & Biodiesel Information Service
If it affects the ever-expanding renewable fuels arena, you'll read about it first in Ethanol & Biodiesel Information Service. Never before have marketers had such a close-up, in-depth view of the ethanol and biodiesel marketplace.

NEFI MEMBERS: $1,796/year ($200 savings). Current subscribers may extend subscriptions at this rate. Contact OPIS Customer Service toll free (888) 301-2645.

OPIS Retail Fuel Watch
Combining OPIS wholesale and retail fuel prices for a complete picture of U.S. downstream profit conditions and market direction. Includes over 85,000 prices from service stations and c-stores daily. One-year electronic subscription (52 issues) plus one of six regional profitability supplements.

NEFI MEMBERS: $495/year for electronic subscription includes one regional profitability supplement ($50 savings). Additional supplements are $390 each. Contact OPIS Customer Service toll free (888) 301-2645.

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

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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.

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