June 25, 2001

SIGMA LEGISLATIVE CHAIRMAN IN NATIONAL NEWS CONFERENCE

Mike Ports, SIGMA's First Vice President and Legislative Committee Chairman, was in Washington last Thursday to participate in a news conference on national energy policy The media event, called by the Senate Republican Conference, featured some 8 speakers representing small business, farmers, housewives, and similar interests as well as three Republican Senators: Craig (ID), Thomas (WY), and Voinovich (OH). It was held on the lawn just outside the Senate chambers, and was covered by a significant number of electronic and print reporters.

The purpose of the news conference was to apply pressure to Senate Democrats to move quickly to take up the President's proposed energy strategy legislation. Ports was asked to speak as a result of an invitation to NACS to provide a speaker; and he represented both SIGMA and NACS.

In his statement at the news conference, Ports raised the same issues SIGMA has been raising all year: that Congress needs to take action to ensure sufficient refining capacity in the nation, and that Congress must act to address the problem of balkanized fuel markets.

As a part of the effort to force consideration of energy policy by the Senate, Sen. Craig indicated he will begin using disruptive tactics on the Senate floor during debate over the "patients' bill of rights" legislation until Senate Democrats agree to a "date certain" for taking up an energy bill.

EPA STUDIES BOUTIQUE FUELS

In response to a directive from the Bush Administration, EPA is reviewing the issue of boutique fuels and its impact on supply problems. As a part of that review, EPA and DOE officials had a lengthy conference call last Thursday with SIGMA, NACS, and SSDA (Service Station Dealers). Mike Ports had a busy day, as he was involved in that conference call as well as the earlier-mentioned news conference!

EPA asked questions dealing with such matters as: What is a boutique fuel? What is the impact of boutique fuels on the market? What are the "choke points" in the system where the problems are magnified the most? What effect would various policies have on the market (such as banning MTBE, mandating ethanol, etc.)? What can be done to ease the winter-to-summer transition to lower RVP gasoline? On that last issue, some refiners have suggested that EPA drop the May 1 deadline for terminals to make the conversion- an idea SIGMA questions. That could aggravate the problem of switching to low RVP at the retail level.

SIGMA will be surveying members next week, looking for anecdotal evidence of choke points, price anomalies between different fuels, and price spikes clearly based on supply shortages. We will again be speaking with EPA in mid-July, to continue the discussion. EPA hopes to have a final report out in September.

SENATE ENERGY HEARING

Also last Thursday, the Senate Energy and Natural Resources Committee held a hearing on gasoline issues. Chaired this time by new chairman Sen. Bingaman (D-NM), it was essentially a continuation of the hearing at which SIGMA President Tom Robinson spoke in May, when panel members urged repeal of the oxygenate mandate.

There were two panels at this hearing. The first panel featured a representative from DOE plus Linda Fisher, deputy administrator of EPA Fisher defended EPA's decision to deny California's request for a waiver from the oxygenate mandate. However, she also suggested it was time for Congress to eliminate the mandate nationwide.

The second panel included representatives of the OFA (representing MTBE interests), who supported the oxygenate mandate; RFA (representing ethanol interests), who support keeping the oxygenate mandate or replacing it with a "renewable" mandate; and NESCAUM (representing clean air officials from the northeast), who indicated that denial of the oxygenate waiver would lead to an energy crisis in their region. Bingaman wants to hold more hearings before trying to move energy legislation, which is directly contradictory to what Sen. Craig wants (see our first story above).

NEW & PENDING LEGISLATION

Several bills of interest to SIGMA marketers have been recently introduced, or are circulating seeking co-sponsors before being introduced. Among them:

H.R. 2249. The "Blunt" (R-MO) bill, dealing with boutique fuels, was introduced last Wednesday with 20 bipartisan cosponsors, mostly Midwesterners. It provides for 3 national fuels: conventional gasoline, a new RFG, and whatever California chooses. The bill would require an oxygenate in RFG, but only one would be allowed. That one would be chosen by EPA, and could not be one that is associated with water quality programs - in other words, an ethanol mandate with out mentioning ethanol. But the bill does have many favorable provisions as well, including a ban on the phase-in of low-sulfur diesel. It will be discussed at the SIGMA Legislative Committee meeting in July here in DC.

H.R. 1951. This is a "dealers' bill of rights" bill introduced by Rep. Wynn (D-MD). Its 3 major provisions are to overturn the court case State Oil v. Khan which allowed suppliers to dictate maximum pricing to dealers; to extend the dealer's right of first refusal to merger/acquisition situations; and to exempt dealers from paying a supplier's attorneys' fees if he loses a lawsuit. The bill is not expected to go anywhere, but SIGMA will keep an eye out.

Dealer interests are also circulating a bill, not yet introduced at last report, called the "Wholesale Motor Fuel Fairness and Competition Restoration Act." With Rep. Thompson (D-CA) as principal sponsor, and a dozen co-sponsors from NY, MA, and CA, the bill would outlaw zone pricing ban redlining; require publication of prices including rebates, refunds, and discounts; and mandate uniform pricing at the terminal for all classes of trade (lessee dealer, open dealer, jobber, etc.) We are looking into this one.

TRUCK LOADING SAFETY

In response to a tragic accident in Mississippi a few years ago, the industry has worked together to develop standards for truck loading and unloading. That process, in which SIGMA was a participant, has now borne fruit with the publication of API Recommended Practice (RP) 1007 Loading and Unloading of MC 3061DO T 406 Cargo Tank Motor Vehicles, First Edition. This is not only an excellent safety manual; it is also likely to be referenced by governmental agencies as they set safety standards in the future. SIGMA recommends that each member should have a copy. The cost is $25 per copy from API; however, SIGMA members are entitled to a 20% discount. To order, contact TechStreet of Ann Arbor, MI by calling 800-699-9277 or going to www.techstreet.com. To get the SIGMA discount, you must either click thru from our website, www.sigma.org or call the 800 number and reference "SD1007".

TIDBITS...

President Bush has selected Marianne Lamont Horinko to be EPA's Assistant Administrator for Solid Waste and Emergency Response. The Office of Underground Storage Tanks (OUST) falls within her jurisdiction. SIGMA has long had good working relations with her, dating back to her days in the previous Bush Administration . . . The Senate has still not adopted a resolution allowing for the organization of committees, after the change in party control. This is seriously hampering the ability of committees to move forward with legislation . . . Last Wednesday, the House Appropriations Committee approved funding for RSPA, the agency to which Hazmat transporters and "offerors" must pay an annual fee. They rejected a Bush Administration proposal to fund the hazardous materials safety program from user fees - a proposal which was the reason RSPA had backed down on its plan to reduce the Hazmat registration fees this year . . . Despite EPA's rejection of a California waiver from the oxygenate mandate, New York officials plan to move forward in asking for their own waiver from oxygenates in RFG. They say they have a different basis for their request from California's. There are now at least 11 states with current or future bans on the use of MTBE in gasoline. Besides CA and NY, they are: AZ, CO, CT, IA, MI, MN, NE, SD, and WA . . . A report in last Friday's Washington Post suggests that the administration may be poised to raise CAFE standards for SUVs, mini-vans, and pickup trucks. There may also be an increase in the mileage standards for cars. The current standards are 27.5 mpg for cars, and 20.7 mpg for the "light-duty-truck" class of vehicles . . . In another move indicating Congress is more interested in conservation than increased supply, the House voted 247 to 164 to block drilling for oil in the Gulf of Mexico off Florida. By a slightly smaller margin, the House voted to block new energy exploration in National Monuments beyond what is currently allowed . . . Legislation to provide small business with relief from Superfund liability has passed the House by a 419-0 vote and a companion bill has now been introduced in the Senate (S. 1046). SIGMA supports the legislation, which exempts companies that contributed very small amounts of hazardous waste to a site ... Vice President Cheney is refusing to comply with a request from the General Accounting Office (GAO) to release documents related to the task force which formulated the administration's energy strategy. Among other objections to the request, Cheney's office points out that it came not as a result of a committee's action, but simply from two individual Democratic Congressmen. This battle isn't over yet, but it's mostly about politics . . . Leslie Belcher Sewell, formerly chief of staff to Oklahoma Congressman Wes Watkins (R), has joined the Collier Shannon Scott law firm. She will be working on tax issues for SIGMA, among other duties.