NEON: NEFI Energy Online News

CFTC Commissioner Asks Senate to Investigate Off-Shore Energy Trading
A Commissioner at the Commodities Futures Trading Commission (CFTC) has asked a group of Senators to investigate trading of energy contracts outside of the United States. In a letter to Senators Lieberman (D-CT), Levin (D-MI), Collins (R-ME) and Coleman (R-MN), who have been leaders on the issue of futures market reform, CFTC Commissioner Bart Chilton (Dem.) has called for review of trading of U.S. energy commodities by both foreign exchanges and sovereign wealth funds. Chilton implied suspicion that other governments, particularly those that are not friendly to the U.S., could use such off-shore mechanisms to pursue "inappropriate objectives." Currently, off-shore trading of U.S. commodities is exempt from U.S. regulation. NEFI has made closing trading loopholes its next focus after the "Close the Enron Loophole" bill passed last week. Read the Commissioner's statement.

House OK's Energy Tax Breaks; Leaves Alone Renewable Diesel Credit for Heating Oil
The House of Representatives overwhelmingly passed H.R. 6049, the Renewable Energy and Job Creation Act. The bill consists of energy tax extenders, including an extension of the renewable diesel and biodiesel tax credits for one year through 2009. The bill had originally removed heating oil from the renewable diesel tax credit, and NEFI (joined by Massachusetts Oilheat Council) opposed the plan, arguing that it was unfair to remove heating oil for the credit but leave the on-road credit in place (Read the letter to Senator Kerry here). Senator Kerry (D-MA) and Rep. Richie Neal (D-MA) led members of the Northeast/Midwest Senate Coalition in support of the NEFI/MOC position (read letter here). Maintaining the tax credit is a victory for the heating oil industry. We will need access to all possible alternative sources in the future, especially as states like Massachusetts and New York consider alternative mandates for the industry. The Senate is expected to take up the measure in June.

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Energy Trading Regulator Announces New Initiatives; Market Reacts
On Thursday, May 29th, the principal regulator of U.S. energy trading, the Commodity Futures Trading Commission, announced a series of new and expanded energy trading oversight initiatives. Immediately after the announcement, front month crude oil contracts on the Merc dropped and closed the day down $4.41 per barrel (refined products also declined). The new initiatives include:

1. A new agreement with their regulatory counterpart in the United Kingdom that would allow greater data sharing of U.S. Crude Oil contracts traded in that country (under the "Foreign Markets Loophole," also note that NEFI has not yet seen the details of this new international agreement);

2. Improved oversight of complex index and swaps trading (though the "swaps loophole," see Mike Masters testimony in lead story article);

3. A major announcement that since December of 2007, the CFTC has had an ongoing and "confidential" investigation into the "purchase, transportation, storage and trading of crude oil and related derivative contracts" to be certain "that the markets are properly policed for manipulation and abusive practices."

Certainly, there are reasons to be skeptical about this announcement. The CFTC has been under a lot of pressure lately, by Congress, the media and consumer and trade groups, especially NEFI. It may be trying to preempt its critics in advance of a major Senate hearing next week (at which PMAA will be testifying). Additionally, the announcement seems to imply that the CFTC does not have the authority it needs to police the market, and that there is a problem with the markets which is the opposite of what Acting Chairman Lukken has in Congressional testimony as early as two weeks ago. And then there is the lack of both certain legal authorities and monies it would need to "get tough," both of which can only be legislated by Congress. Nonetheless, the announcement is a very positive step and a definite change of tone for the CFTC, and a step in the right direction. Read the full statement.

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Annual U.S. Dept of Transportation's HAZMAT Registration Due July 1st
The U.S. Department of Transportation's Pipeline and Hazardous Material Safety Administration (PHMSA) requires hazardous material transporters to register and pay a fee in return for a certificate of operation. Members who have registration certificates that expire in 2008 must renew by July 1, 2008 (one month from this week). It is also important to remember that this regulation applies to anyone that transports hazardous materials, including motor fuels and heating fuels. As a rule of thumb, if your vehicles are placarded, then you must comply. This requirement used to apply only to inter-state HAZMAT transporters, but shortly after 9/11 it was expanded to apply to ALL HAZMAT transporters. NEFI will be circulating a compliance kit for 2008 DOT HAZMAT Registration in the coming days -- look out for it. If you have additional questions, contact the NEFI Regulatory Action Center at (617) 924-1000 or jimcollura@nefi.com.

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General News

• CNBC online poll asks, "Should Congress Crack Down on Oil Speculators?" Read More

• GOP Presidential hopeful Senator John McCain opposes closing the "Enron Loophole," an aide was quoted as saying in a recent news blog. McCain may be getting advice from his chief economic advisor, former Sen. Phil Gramm (R-TX), who as Chairman of the Senate Banking Committee saw the Enron Loophole into law in the first place (Gramm's wife was also Chairman of the Board at Enron at the time). Read More

• The Dubai Gold & Commodities Exchange has started trading U.S. crude oil contracts and yes, without U.S. oversight. Read More

• Finally, everyone seems to be coming around these days to the reality that runaway investor speculation is very real and is responsible for the run-up in prices, an argument NEFI has been making for over two years now. Billionaire investor George Soros has admitted the role of speculators this week. Read More

• The International Energy Agency is expected to again lower global oil demand outlook after already revising its demand forecast earlier this month, and saying that there were sufficient global oil supplies. But a market driven by greed and fear cares little for market fundamentals, right? Read More

• The House of Representatives last week overwhelmingly passed a bill that would allow the Justice Dept. to sue OPEC. It is unlikely to overcome opposition in the Senate or the Bush veto threat. Read More

• The U.S. Senate is to take up a major Cap & Trade bill next week that would aim to reduce GHG emissions by two percent between 2012 and 2050, based on 2005 levels. NEFI is currently reviewing this legislation. It is unlikely that any Cap & Trade bill will be enacted this year. Read More

Heating Fuels

• Connecticut Republican-American article "Credit crunch is squeezing oil dealers" (May 26, 2008) gets to the root of the problem, and interviews Gene Guilford, Executive Director of the Independent Connecticut Petroleum Association (ICPA). Read More

• A $1 billion dollar LIHEAP supplemental for the current year was passed last week in the Senate, as was reported in NEON, and is now pending before the House of Representatives. It is riding a war supplemental bill. We will update you on its progress next issue.

• A recent exposé on the BostonChannel.com encourages heating oil customers to stay away from oil contracts because, they argue, many experts expect the price to drop. Read More

• Some Maine companies, including Univ. of Maine and Sugarloaf, are looking to use cooking oil to power their home heating systems. Read More

Motor Fuels

• Dennis K. Burke, Inc. will be opening the first E85 station in Massachusetts. The 1,000 gallon E85 tank will dispense fuel from one hose at their 24-hour location at 410 Beacham St., Chelsea, MA. Read More

• Volkswagen has promised to be the first to introduce "ultra-efficient" cars, and in 2010, has committed to the introduction of a 230-mpg single-passenger vehicle. Read More

• According to U.S. Senator Dick Durbin (D-IL), the Federal Trade Commission has agreed to a new probe of Price Gouging due to extraordinary spike in energy prices. Read More

• According to the AP, retail stores are pushing "stay-cations," or travel-free vacations, due to high gas prices. Read More

• Alliance to Save Energy launches "Drive $marter Challenge" to promote fuel-efficiency education. Read More

If you have industry news items for a future issue of NEON, email jimcollura@nefi.com and put "NEON industry news" in the subject line. No more than 50 words please, "Read More" link optional.

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• BIOHEAT^® WEBINAR planned for Thursday, June 5th. A comprehensive overview of the newly emerging Bioheat product will be held from 1:00-3:00 pm (EDT), presented by Advanced Fuel Solutions President, Paul Nazzaro, Sr. The session will conclude with a 30 minute Q&A. For dial-in and webinar instructions, email pauljr@fuelsolution.com or call 978-664-5923.

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.

• 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.

• NEFI CEO Shane Sweet and Education VP Mike Markarian are in Vermont this week supporting the Vermont Fuel Dealers Association Spring Conference at Basin Harbor.

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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

View NEFI Membership Information

Discounted Education & Training
Yet Another Benefit Only for NEFI Members!

NEFI members are entitled to discounted rates for courses, seminars and workshops in oilheat & propane, air conditioning, HAZMAT certification and other courses!

• NEFI conducts the Basic Oil Burner Installation & Service Technician Course at six training centers throughout New England: Watertown and Springfield, MA; Hyde Park and White River Junction, VT; Claremont, NH; and Warwick, RI.

• Courses in air conditioning, gas service, HAZMAT certification are offered at Watertown, MA location.

• CETP training in propane is conducted at various locations in MA, NH and RI.

• Offering an array of business management courses to help your business thrive!

• For detailed information on NEFI courses, visit www.nefi.com/training/index.html or email school@nefi.com.

Join or renew membership with NEFI today! Click here, or contact Joanne Sharkey, NEFI Membership Coordinator at (617) 924-1000 or joanne@nefi.com.

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Intelligent Warmth New TV Spot
NORA announces launch of newest television commercial for Intelligent Warmth
The National Oilheat Research Alliance (NORA) collaborated with the Consumer Education Committee, headed up by Mr. Larry Scuder and an advertising agency bubble group to prepare a 30-second television commercial. The commercial shows the reliability, efficiency, dependability and the true value of Oilheat.

View the TV spot here.