May 13, 2002

SIGMA TESTIFIES ON TANKS; MEETS SENATOR RE: REST AREAS

Last Wednesday, SIGMA First Vice President Art DeBlois testified before the Senate Superfund Subcommittee regarding S. 1850, Underground Storage Tank (UST) legislation sponsored by Sen. Chafee (R-RI). The prior day, SIGMA Executive Vice President Ken Doyle joined with leaders from NATSO in a meeting with Sen. Jeffords (I-VT), chairman of the Sen. Environment and Public Works Committee, to express our concerns over expected efforts to allow for commercialization of Interstate Highway rest areas in the coming year.

At the UST hearing, the first panel of witnesses included EPA’s Asst. Administrator for Solid Waste, who indicated that EPA supports many of the provisions in Chafee’s bill but has some concerns. In response to questions, she indicated the concerns were over timetables for adopting regulations (too quick) and rules on bringing cases for paperwork-only violations (too restrictive). A representative of GAO, the Congressional investigative arm which released a study of USTs last year, was also on the first panel. Although GAO does not endorse specific legislation, he acknowledged in response to questions that S. 1850's provisions are consistent with GAO’s recommendations.

Art DeBlois, who is from Rhode Island and thus a constituent of Chafee’s, was on the second panel, which also included representatives of the City of Santa Monica, CA; Zurich Insurance; an environmental group (US PIRG); and an association of state and territorial tank officials. Art’s testimony was well received. Others testifying were generally supportive of the bill, with concerns that not enough money is being allocated from the LUST Trust Fund (Santa Monica & US PIRG), concerns about rules for paperwork violations (US PIRG), and concerns about new requirements placed on states for red-tag programs, 2-year inspections, and operator training programs (state officials).

All Senators present indicated support for the legislation, including chairman Boxer (D-CA), who essentially said that this is good legislation that needs to be acted on soon. We are very pleased.

The meeting with Sen. Jeffords and his staff focused on expected efforts by state highway officials to get permission to commercialize Interstate highway rest areas as part of the highway program reauthorization in 2003. Those present from NATSO included First Vice President Nelson Baker, who is from Vermont and thus a constituent of Jeffords, as well as the association’s Second Vice President and one of their lobbyists. The pressure for commercialization is monetary: providing rest areas is an expense with no current offsetting income. Together, we let the Senator and the senior policy advisor for his committee understand why we are opposed to commercialization of rest areas: doing so would diminish the value of the massive investments by commercial enterprises at highway interchanges, and would cut into local tax revenues. Mr. Baker was able to outline an alternative approach; in at least one case, he has negotiated with the state to make his off-highway truck stop into an official rest area (free parking, free use of restroom facilities), thereby saving the state the cost of constructing one. We felt our points were well received.

While in the meeting, we also raised the issue of codifying the ban on sale of gasoline and diesel fuel ex-tax at “duty-free” businesses along the border.

FTC TO TRACK GAS PRICES

At a conference on gasoline prices last week, the Federal Trade Commission announced it will begin tracking daily retail gasoline prices as well as wholesale prices. The purpose of the tracking, according to reports, is to go “beyond law enforcement to analyze in a more comprehensive way the central factors that affect the level and volatility of refined petroleum products throughout the U.S.”

SIGMA MASTERS DEADLINE

This Wednesday, May 15, is the cutoff date for hotel rooms for the next “SIGMA Masters” program. Entitled “Positioning Your Business for Growth & Succession: Getting Smart Enough, Early Enough”, the program takes place in Baltimore, MD, June 5-7. There is still room for a few more participants; contact Sheila Baerenz at 703-375-0485 for details!

ETHANOL DEVELOPMENTS

The industry awaits the naming of conference committee members by the House for the big Energy Bill, which will decide whether to accept or reject the Senate provision mandating 5 billion gallons per year of “renewable fuel” in the nation’s motor fuel pool. SIGMA is opposed to that mandate. Once all conferees are known, SIGMA will likely be calling on selected members to contact key Congressmen and Senators to oppose the mandate. The latest word from the House is that conferees could be named at any time, but that actual meetings of the conferees probably won’t take place until early June.

Meanwhile, last week there were two other significant developments regarding ethanol. The first was announcement of a Justice Department investigation into allegations of price-fixing by producers of ethanol. The chain of events started with Rep. Ose (R-CA) turning over materials developed by a California House subcommittee to the FTC. After reviewing the documents, the FTC turned them over to the Justice Dept. Ose was quoted in the media as saying that this raises a set of concerns about criminal violations of the antitrust laws. The issues involve alleged bid-rigging for surplus European wine later finished into ethanol in the Caribbean and sold in the U.S. market.

Separately, EPA began an inquiry into whether ethanol plants are producing emissions that violate the Clean Air Act. Recent tests at several ethanol plants turned up emissions of carbon monoxide and VOCs far greater than what was anticipated, based on the permits issued for those plants. EPA has indicated that the problem is widespread in the ethanol industry. Sen. Feinstein (D-CA), a leading opponent of the proposed ethanol mandate in the energy bill, has sent a letter to EPA asking for a study of the impact of an ethanol mandate on the environment, given the new information about ethanol plant emissions. EPA has scheduled a meeting for June 3 with ethanol producers to discuss the concerns. Meanwhile, the Renewable Fuels Association has said that if there is a problem, the ethanol industry will move quickly to resolve it.

BIODIESEL INCENTIVES

The Senate energy bill includes more than one incentive for the use of bio-diesel – that is, a diesel additive made from soybeans which is most frequently blended at a 20% ratio into 80% diesel. In addition to counting as a “renewable fuel”, the Senate energy bill will give biodiesel a tax break even greater than the one given ethanol. It would reduce the federal excise tax on diesel by 1 cent for every 1% of bio-diesel used, meaning a 20 cent per gallon subsidy for the 80/20 blend. That subsidy would officially expire at the end of 2005, unless extended. Of course, the ethanol incentive was originally to have expired in 1984.

CONVENTION SPORTS WINNERS

In case you missed them, the following were winners in the tournaments at the SIGMA Spring Convention in San Antonio late last month:

Tennis Tournament

First Place Team: Henry Dodge and Helen Maples

Second Place Team: Maria Shields and Raynelle Hunton

Golf Tournament, Palmer Course

First Place Team: John Barnes, Steve Boyd, Conrad Hottman, and Pat Williams.

Second Place Team: Mark Conant, Mike Markie, Nancy Conant, and Jason McDonnell.

Third Place Team: Keith Delcambre, Andrew Tubb, Sarah Martin, and Jay Bailey.

Fourth Place Team: Don Borzilleri, Max Lenker, Steve Montgomery, and Shawn Smith.

Closest-to-the-Pin (3 separate holes): John Barnes, Steve Boyd (2) Lisa Reinhardt, Marketa Fisher, and Sarah Martin.

Golf Tournament, Resort Course

First Place Team: Clay Boardman, Steve Gebert, Bob Phillips, and Brad Razook.

Second Place Team: Jeff Fisher, Kate Khiriarian, Kingsley McCallum, and Todd Anderson.

Third Place Team: Bruce Bates, Rick Andrews, Christi Castle, and Scott Castle.

Fourth Place Team: Bob and Doug Prather.

Closest-to-the-Pin (3 separate holes): Scott Gebert, Bruce Bates, Brett Hoffmaster, Maria Beamesderfer, Sandy Calhoun, and Gina Brown.

Longest Drive: Doug Prather and Kathy Laderman.

Hole-in-One: NO WINNER.

Congratulations to all who played and had a good time, as well as to these who won prizes!