July 2, 2001

CHANGING FORTUNES? TIME TO RE-THINK SOME DECISIONS?

We've heard anecdotal information that retail margins have improved dramatically over the past three weeks in many parts of the country. While the improvement may not yet be big enough or long enough to offset losses from last spring, there is a new air of optimism among marketers we've spoken to lately. Which brings us to our point:

When times were tough, you may have made decisions to forego attendance at some events that you knew were in your company's best long-term interests. If so, now is the time to re-think those decisions. It's not too late to register for these functions:

• The SIGMA Masters Program, "Creating Wealth Through Motor Fuel Marketing", at the University of Virginia, July 8 to 13. There are still some slots available in this 5-day "summer school" with George Overstreet designed for CEO's, CFO's, and other top company management. Call the SIGMA office for a registration form or other information.
   

• SIGMA Summer Committee Meetings in Washington DC. July 17-18. There is a major debate underway within the federal government on energy and environmental issues which will have major impact on your business into the future. You need to be present at the Legislative Committee Meeting to help decide SIGMA's position on those issues, and to call on your Congressmen and Senators while in town to make sure they include retailer and distributor concerns in their decision-making process. There is NO CHARGE to register for the meeting, and you'll be welcome even if you don't sign up in advance. But it would help if you let us know you're coming, so we can plan meeting space. Note that the Willard Hotel is completely sold out of rooms during our stay, but there are two other adjacent hotels as options: The Hotel Washington, right next door, offers $145 rooms with no view and 1 double bed, or $265 with a view and a king size bed. Call 202-638-5900. Rooms at the JW Marriott, across the street, are $289. Call 202-393-2000.

Now might also be a good time to sign up in advance for these coming SIGMA meetings; you'll save on the registration fees for both if you sign up now:

• SIGMA Annual Meeting in Seattle, Washington, November 10-12, 2001. Save 50 ($75 per couple) if you register before August 14!
   

• Winter Management Conference in Steamboat Springs, Colorado, hosted by SIGMA and ILMA, January 20-23, 2002. Save up to $177 per couple if you register before July 31!

For registration forms for any of these meetings, call SIGMA at 703-709-7000, fax your request to 703 709 7007, or e-mail to sigma@sigma.org.

IRS WEBPAGE

The IRS recently launched its webpage for Gasoline Retailers. Go to www.irs.gov, click on Small Business & Self-Employment Community, and then click on Gas Retailers. The webpage contains a number of topics, including Tax Tips, Avoiding Problems, Audit Technique Guides, Tax Calendar, Related Links, Financial Resources, Tax Laws & Regulations, Trends & Statistics, and News & Events. This is part of the IRS Market Segment Specialization Program (MSSP). SIGMA and other industry groups have met with the MSSP group four times since last August, twice dealing with development of the webpage. SIGMA seeks input from members on how this webpage can be improved; call Doug Charnas at 202-857-1757 with your comments.

SIGMA TECHNOLOGY SURVEY

At the instigation of our Marketer Operations Committee, SIGMA is participating with Gerke & Associates in a Convenience Store/Petroleum Marketer Technology Survey. Your company will receive an e-mail copy of the survey this Tuesday or a hard copy by regular mail later in the week. We urge you to complete and return the survey. For completing the brief survey, you will receive a free copy of the report, which will include data summarized by SIGMA membership. It will also help SIGMA ensure that future speakers and magazine articles will be on target in discussing topics that are relevant to the technologies that you are utilizing today or plan to implement in the future.

HOUSE ENERGY BILLS

SIGMA participated in a breakfast meeting and briefing by Rep. Tauzin (R-LA), chairman of the House Energy and Commerce Committee, a week ago Friday. (SIGMAPAC had contributed $5,000 to his reelection campaign.) At the breakfast, we learned that the House Republican leadership has given his committee until July 14 to move energy policy legislation. He indicated he hopes to act in four specific areas, perhaps together or perhaps separately. The first would be a measure dealing with conservation, designed to deal with Democratic concerns. That would be followed by legislation dealing with boutique fuels electricity, and nuclear power.

The following Monday, we met with senior staff from his committee, and learned the outlines of his plans on boutique fuels. It comes in two parts. The first is a study by EPA and the Dept, of Energy (DOE) on the impact of boutique fuels on a wide range of issues including air pollution, price, supply. and distribution. This study would have to be completed by year-end with joint EPADOE recommendations, in time for Congress to act on substantive legislation in the first half of next year, an election year.

The second part of Tauzin's boutique fuels legislation would deal with four specific refinements to current law and regulation. It would 1) change the rule for averaging oxygenates in RFG, perhaps by removing the pergallon minimum which would allow for wintertime gasoline to offset low-oxygenate summertime gasoline; 2) direct EPA to consider alternatives to the current regulatory scheme for the winter-to-summer shoulder season, where lower RVP gasoline is required in the system at different times for different stages of distribution; 3) direct EPA to finalize, and add even more flexibility to, the proposed 0.3 psi waiver for summertime ethanol-blended RFG; and 4) change some of the "antigaming" rules for blendstock accounting by refiners, which would allow them to offset regulatory shortfalls from one refinery with credits from others.

(On the third point above, it should be noted that SIGMA has previously gone on record in opposition to the proposed rule because an EPA rule against co-mingling would have created yet another boutique fuel, and because it didn't go far enough. EPA has effectively implemented the rule for the Chicago and Milwaukee markets for this summer, through an "enforcement discretion" letter.) SIGMA has been asked for its reaction to this set of proposals, and the leadership is currently reviewing it.

Separately, the House Ways and Means Committee had scheduled markup of the tax portion of energy legislation for June 28; however, that session was cancelled and pushed back to July 12. Congress is in recess this entire week, coming back July 10 for a busy "sprint" to August 10, for the August recess.

OSHA INJURY REPORTING

The Labor Department announced its decision to let a Clinton Administration "midnight regulation" on OSHA injury reporting go into effect. It will change the way employers will have to keep records and report injuries and illnesses, starting Jan. 1, 2002. However, two parts of the rule were held back for further consideration. That included the most controversial provision in the rule, requiring the tracking of repetitive stress (ergonomic) injuries. Business groups had complained loudly about the ergonomic reporting - a part that will not go into effect - but find most of the rest of the changes to be favorable.

SUPREME COURT DECISIONS

The U.S. Supreme Court last week struck down a Massachusetts law banning certain outdoor cigarette advertising. The ruling said that Congress had preempted the states in the area of cigarette advertising. However, the ruling does not apply to state regulation of how tobacco products are sold - i.e., states may ban self-service displays, or require placement behind counters.

In a separate case, the Court expanded landowner development rights by ruling that a state isn't off the hook entirely for defending environmental restrictions on development just because the rules were in place before the current landowner purchased the property. It is not yet clear what the practical effect of that ruling will be, though.

TIDBITS YOU (MAYBE) MISSED

Sen. Loft (R-MS) says he supports a "reasonable" increase in fuel economy standards for cars and light trucks (including SUVs) . . . API has issued its final report on flash fires at gas stations. Conclusion: most cases were caused by static electricity discharges from the customer pumping gas to the grounded vehicle and nozzle - a situation created when the customer exits the car and builds up static electricity by sliding across the seat . . . The US Senate has finally agreed to a reorganization of committees, following the Democratic takeover. The deal will add one Democrat to each committee, as expected . . . The new chief counsel for the Sen. Environment Committee is Allison Taylor, who is very knowledgeable about USTs . . . A program on Good Morning America last Friday outlined ways gas stations might cheat consumers on octane or gallons, without putting in perspective how rare such cases are . . . Gasoline prices peaked in May, at a Consumer Price Index of 146.0, meaning $1 worth of gas in 1982 would have cost $1.46 now. That's still 17.8% LESS than prices would have been if they had merely kept pace with inflation since 1982!