Industry Groups Descend On Washington!!!
Fuel dealers and industry groups from around the country will descend on Washington DC this week! Joining the national effort will be executives, staffs and members from the New England Fuel Institute, Independent Connecticut Petroleum Association, Independent Oil Marketers Association of New England, Maine Oil Dealers Association, Massachusetts Oilheat Council, Oilheat Institute of Rhode Island, and the Vermont Fuel Dealers Association. The industry event was organized by the Petroleum Marketers Association of America, with support from the state groups, and coincides with their annual Washington Conference.
With crude oil pushing $130 per barrel, not to mention the fact that gasoline, distillate fuel and propane futures prices at record levels. The fuel oil dealers are increasingly burdened by regulation, consumer frustration and media "finger pointing." This is perhaps the most important March on Washington in recent memory. The message that the industry is bringing our nation's capital: is that all members of Congress must work hastily to provide market relief to the small business fuel dealer and the struggling American energy consumer through an array of legislative initiatives.
Among the issues being brought to Washington this week:
Multi-fuel Issues
Energy Trading Reform: Support for closing the "Enron Loophole," the "Foreign Markets Loophole," and other federal loopholes that exempt certain trading activities and platforms. Support for proposals to restrict non-commercial speculators’ (i.e. "non-physical players," such as investment companies and hedge funds) role in commodities trading. Creating measures such as increased margin requirements or transaction fees for those types of trades, or by prohibiting their involvement all together (as Rep. Larson of CT has proposed in his new bill, click here for more information).
Biofuels: Support a sensible energy policy that supports a gradual transition to alternative fuels. While being mindful of availability, quality infrastructure needs, cost of product and demand. Also the impact that mandates other proposals it might have on the consumer, the small business fuel dealer, and the economy at large.
Price Gouging: Oppose legislation that would provide incentives for attorneys general and other public officials to unduly accuse retail and wholesale motor fuel, heating oil, and propane marketers of so-called "price gouging" when there is lacking evidence that such an activity exists in the first place.
Funding for Leaking Underground Storage Tanks (LUST): To support the appropriation of all funds authorized for the LUST program. This will give the states flexibility if they are unable to meet all of the new federal requirements due to the currently inadequate federal funding level.
Climate Change: Discuss the various industry-led initiatives; including conservation, R&D, consumer education, the promotion of Biofuels and how these fuels contribute to helping create a greener and cleaner planet. To urge members of Congress to advance policies that are scientifically justified, cost-effective and fuel-neutral. Plus that these policies are sensitive to the cost of energy for the consumer, the impact on small business and the impact on the economy at-large.
Small Business Regulatory Relief: Urging Congressional support for across-the-board regulatory relief for small business fuel dealers.
Heating Fuel Issues
National Oilheat Research Alliance (NORA): Educate members of Congress and their staff of NORA’s continued excellence in consumer education, research and development, technical training and industry outreach. Support technical corrections that would strengthen NORA and make it permanent.
BioHeat®: Support efforts to promote consumer awareness of BioHeat, as well as tax credits and other incentives to encourage production, retail and wholesale distribution and to end user conversion.
Low Income Home Energy Assistance Program (LIHEAP): Support adequate funding and measures that would discourage states from implementing "margin-over-rack" and other leveraging programs that would discourage heating oil and propane dealers from enrolling in fuel assistance programs.
Motor Fuel & Convenience Store Issues
Regulation of Tobacco Products: Opposing legislation that would punish retailers for incorrect packaging, labeling or advertising of tobacco products (they are rarely involved in such decision making) and give new regulatory authorities to the FDA without pre-empting state regulations or providing funds to implement.
Automatic Temperature Compensation: Oppose proposals at the federal level to implement a national temperature compensation mandate for retail motor fuel dealers.
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Energy Market Speculation Is Now "Talk Of The Town"
It seems that speculation and its unquestionable role in the current crisis is the "talk of the town" in Washington, DC, among policy makers and the media. So much is happening; we thought it best to highlight some of the recent developments since our last issue:
• As this issue of NEON went to press, the House and Senate were poised to bring the U.S. Farm bill to a final vote. As members will remember, the Farm Bill contains a provision designed to help close the "Enron Loophole." This bill is expected to pass but the President will likely veto. It is not clear if Congress has enough votes to override a veto. This is just a small but important first step, and not a "magic bullet"; there is much work left to do to. Thank you to all NEFI members and allies for their continued support in bringing attention to -- and doing something about -- the speculative fervor that now dominates the commodities markets.
• PMAA officer and petroleum marketer Gerry Ramm, of Inland Oil Company (Ephrata, WA) is scheduled to testify on Thursday, May 15 at 10AM before a House Committee with jurisdiction over futures trading legislation. The purpose of the hearing is to explore the degree to which speculative investment has played a role in higher fuel prices.
• The Federal Trade Commission wants to monitor for market manipulation in "various parts of the petroleum industry." PMAA and NEFI will review in detail and submit comments on the proposed rule which can be read by clicking here.
• Goldman Sachs issued a report earlier this month claiming that "$150-200 per barrel seems increasingly likely over the next 6-24 months," and that it is in the long run a good thing. They also added that speculators (like Goldman Sachs himself) "should be applauded" for driving up prices and as a consequence; helping drive energy companies and consumers to alternatives. No, we are not making this up. Their May 5th report is available online here.
• Senators Levin (D-MI) and Reed (D-RI) have called on the White House to set up a task force to probe energy speculation. See the May 6th Financial Week article.
• Senate Democratic leaders have revealed a package (S.2991) that they hope to bring to a vote on the Senate floor, designed to address rising fuel prices. The plan would temporarily suspend shipments to the SPR, increase margin requirements on trading, prohibit "price gouging" during "energy emergencies." Also the implementations of windfall profits taxes on oil majors and repeals certain tax breaks, and allow anti-trust suits against OPEC. NEFI supports only the proposal to suspend shipments to the SPR, and the proposal to increase margin requirements but only for non-commercial traders. See the May 7th Reuters article.
• House Republicans introduced a competing plan (S.2958) that would also suspend SPR deliveries, invest $6 billion in coal-to-liquid technologies, and permit drilling in currently off-limits areas in Alaska, off-shore and in the shale areas in the west. NEFI supports these proposals.
• Senators Levin and Feinstein have introduced the "Oil Trading Transparency Act," a new bill that would close the "Foreign Markets Loophole." This loophole permits trading of U.S. energy commodities overseas but without any U.S. oversight or regulation. NEFI is reviewing this legislation. More to come on this issue.
• National Farmers Union has called for a federal investigation of the role that speculation is having on commodities prices. The Farmers Union is a member of the NEFI-led Energy Markets Oversight Coalition and is perhaps the nation’s most respected agricultural trade group. Read the article dated May 9, 2008 published by "National & World AG News Headlines."
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U.S. DOT Proposes Increase In Annual HAZMAT Registration
The U.S. Department of Transportation’s Pipeline and Hazardous Material Safety Administration (PHMSA) has proposed to raise annual HAZMAT registration fees, which are based on business size. All fuel dealers transporting hazardous materials are required to register, pay the fee, obtain a certificate of registration and keep a copy of the certificate in the cab of all HAZMAT vehicles. Current fees are $275 for small businesses and non-profits and $1,000 for large. PHMSA is proposing to increase the fee that large business must pay from $1,000 to $3,000 for registration year 2009-2010 and beyond. The small businesses and non-profits will remain unchanged. The fees are used to fund the HAZMAT Emergency Preparedness Grants Program that provides money to emergency responders nationwide.
NEFI anticipated this increase and Regulatory Counsel Mark S. Morgan, Esq., (mark@nefi.com) is working to exempt most heating oil and propane dealers through a pending rule. The HAZMAT registration program uses U.S. Small Business Association (SBA) size categories to determine the size of companies of paying the fee. Under the current rule, a "gross receipts" threshold is used to determine whether or not a company is "large business." The current amount is $11.5 million for heating oil dealers (NAICS 454311) and $6.5 for Propane dealers (NAICS 454312). NEFI has advocated for a 100 employee threshold, which would exempt most heating fuel dealers from the large business size category, and as a result, from paying the proposed HAZMAT fee increase; potentially saving the industry millions of dollars in new fees. The final rule is expected in the coming months.
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TSA Delays Compliance Deadline TWIC Enrollment
The U.S. Transportation Security Administration (TSA) announced an extension of the final compliance date by which drivers must obtain a Transportation Worker Identification Credential (TWIC) in order to enter certain port facilities located around the country. The deadline was originally set for September 25, 2008, but has now been pushed back to April 15, 2009. The seven-month extension is required due to a backlog of pending applications and driver background checks. The program is now on-track to complete enrollment for a number of jurisdictions by the end of 2008 and several ports will be required to comply with TWIC regulations this year.
Owners and operators of facilities located within Captain of the Port Zones Boston, Northern New England and Southeastern New England will need to comply by October 15, 2008. Additional compliance dates for select ports will be announced in the coming weeks. The Coast Guard will provide at least 90 days notice prior to enforcement. To avoid delays at enrollment centers, the TSA is urging drivers to pre-enroll online where they can provide essential biographical information and schedule an in-person interview. Although the compliance date has been extended seven months, workers are encouraged to enroll as soon as possible. Additional information can be found on the U.S. Coast Guard's Homeport website and on the TSA's web site.
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2008 UCR Registration Letters Sent to All Active U.S. DOT Number Holders
The U.S. Federal Motor Carrier Safety Administration (FMCSA) announced this week that 2008 registration letters for the new federal Unified Carrier Registration (UCR) program has been sent to fuel dealers nationwide. Congress created the UCR in 2005 as part of the five-year federal hazardous material reauthorization bill. The new UCR program replaces the former Single State Registration System that used to apply only to for-hire interstate motor carriers. The UCR registration letter is being sent to all current U.S. DOT number holders who operate in interstate commerce. Any fuel dealer with commercial vehicles that travel across state lines and weighs over 10,000 lbs GVW or is required to have a U.S. DOT HAZMAT placard must register by June 1, 2008 and pay a fee based on the number of trucks the fleet. UCR registration may be completed online. The following UCR fee schedule applies:
Fleet Size, Fee Per Company
0-2, $39.00
3-5, $116.00
21-100, $806.00
101-1000, $3,840.00
In addition, states are permitted to expand the UCR registration program to intrastate transporters, including for-hire and private petroleum transporters who never cross state lines. Intrastate transporters who must register will receive UCR letters from their state DOT office. The FMCSA is giving a grace period until June 1, 2008 to those interstate transporters who did not register and pay a fee during the abbreviated 2007 registration year. No credential is issued under UCR, instead enforcement authorities will look through the federal UCR database to check for compliance. Marketers who did not receive the 2007 and/or 2008 registration forms in the mail should download the packet at http://www.ucr.in.gov. To ensure that the registration material is sent to the correct business address, the interstate petroleum marketers should check and/or update their motor carrier information in the FMCSA database at www.safer.fmcsa.dot.gov. Petroleum marketers should refer to their registration letters for additional information.
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• Maine Attorney General Steven Rowe has said that high fuel prices are not because of price gouging by retailers or wholesalers. Read the full story.
• According to PMAA, several oil refiners have settled a multi-district MTBE lawsuit brought by 153 public water companies for $422 million. PMAA Counsel is reviewing how the settlement might impact independent motor fuel marketers.
• Twenty-three Senate Republicans, including Republican Presidential Candidate Sen. John McCain addressed in a letter, called on the EPA to consider a waiver of the ethanol mandate due to the affect the mandate may be having on food prices. Congressional leaders are also considering proposals to either roll back or outright suspend the mandate.
• The American Petroleum Institute, which represents the major oil companies, has announced a multi-year and a multimillion dollar public outreach campaign designed to deflect some of the blame for high prices away from producers. Also cautioning lawmakers about eliminating tax breaks and imposing windfall profits taxes. See the May 9th Washington Post article.
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• Shane Sweet, CEO and James Collura, VP for Public Policy are in Washington this week representing NEFI at the PMAA Washington Conference and participating in Congressional meetings on Capitol Hill (see lead story article TOP-).
• 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 is available at www.visions2008.org. Tracy Goodwin, NEFI VP for Events, is pulling together the details. Craig Snyder of Wesson Inc., and Don Craft, Consultant to Global Petroleum, have headed up the development of the new Visions event.
• The 2009 North American Heating and Energy Expo is scheduled for June 9-10, 2009 at the Hynes Convention Center. For information go to www.nefi.com/expo.
• Be on the lookout for NEFI's 2008 Fall Energy Conference to Napa Valley, September 23–28, 2008. 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. Registrations will be sent by email and postal mail to NEFI member companies very soon!
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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
OIL&ENERGY MAGAZINE is produced monthly and circulated to over 9500 diversified fuel company owners, managers, petroleum and propane distributors, and related HVAC service companies from Maine to North Carolina and other regions where Oilheat and propane for heating have an important market share.
Our news and feature focus is timely and of particular value to keeping personnel and managers in the industry well informed and attuned to industry developments and forecasts.
Monthly columns include fuel product hedging, financial, and weather advisements, plus our Q&A with prominent executives whose positions and decisions are relevant to the fuel marketplace. NEFI member companies receive OIL&ENERGY as a member benefit, and can also access a PDF file of the entire magazine each month at http://www.nefi.com/oilandenergy/archive.htm
View NEFI Membership Information
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Brookhaven National Laboratory hosted a biodiesel workshop on May 2 and NORA President John Huber was one of several guest speakers. The forum-style workshop discussed biodiesel experiences and possible opportunities for future initiatives. John Huber discussed the liquid fuels industry and its goals, public policy and a variety of other topics. In addition, discussions included an overview of the development and rank of the biodiesel industry, as well as alternative biodiesel sources.
www.nora-oilheat.org
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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U.S. & Regional Fuel Inventories
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ICPA E-Marketers Report May 5, 2008
ICPA Technical Education Center Newsletter
MODA 54th Annual Convention
Read more at www.meoil.com
MOC Workshops to Fight Gas Utilities
OHC-NH Newsletter
OHI-RI Newsletter
Montpelier Notebook: Lawmakers Go Home
Haz-Mat Endorsement in Half the Time
2008 Fuel Dealers Conference at Basin Harbor
Education & Training
Read more at www.vermontfuel.com
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