July 8, 2002

CONGRESS CONCLUDES RECESS; BACK TO WORK TOMORROW

Congress, which was out of session all of last week, returns to work on Tuesday and is expected to quickly get down to serious work on the Energy Conference. SIGMA spoke last week with staffers involved in the conference about some of our concerns with the pending bill, and will continue our efforts this week.

SIGMA members who have an interest in what happens on that bill and other Federal issues – as all members should – will have three excellent opportunities next week to have input in the process:

• SIGMA’s Legislative Committee will meet jointly with our counterparts from the National Petrochemical and Refiners Assn. (NPRA) on Tuesday, July 16, during our Summer Leadership Meeting here in Washington. Discussions will help set positions for both organizations, which will direct our future lobbying efforts.

• Also during the Summer Leadership Meeting, SIGMA will assist participants in lining up appointments with Congressmen and Senators who represent districts where you have operations. Nobody has more clout with Congress than YOU do – and we are doing our part to make it easy for you to get your views heard.

• SIGMAPAC, our political action committee, is providing an opportunity for those who have contributed to it to meet with key leaders and members of important committees in both the Senate and House, also during the Summer Leadership Meeting. On Tuesday evening, July 16, SIGMAPAC contributors are invited to a reception at Tortilla Coast restaurant in DC, to which the following representatives have also been invited:

CONGRESSMEN:

Aderholt (R-AL) Boucher (D-VA) Cramer (D-AL) Dooley (D-CA) English (R-PA) Fosella (R-NY) Gillmor (R-OH) Hobson (R-OH) Johnson (R-IL) Manzullo (R-IL) Matsui (D-CA) Ose (R-CA) Petri (R-WI) Pickering (R-MS) Platts (R-PA) Pombo (R-CA) Portman (R-OH) Quinn (R-NY) Reynolds (R-NY) Ryan (R-WI) Shuster (R-PA) Thomas (R-CA) Thurman (D-FL) Wicker (R-MS)

SENATORS:

Chafee (R-RI) Inhofe (R-OK) Reed (D-RI)

If you aren’t yet signed up to come to Washington for the Summer Leadership Meeting, it’s not too late! Click here for a registration form, or call the office at 703-709-7000.

TRUCK PARKING ADEQUATE

One of the key arguments being used by proponents of commercializing rest areas along Interstate highways is that the money is needed to provide additional truck parking space. In that context, a new study released by the Federal Highway Administration is significant. It concludes that parking areas for trucks and buses are more than adequate when both public and commercial parking facilities are factored in. On a state-by-state basis, only 12 states showed a shortage of such parking spaces while 29 showed excess supply.

The study noted that public rest areas were never intended and will never be sufficient to accommodate truck-parking demand. Instead, the commercial truck stop and travel plaza industry should and will continue to be the principal suppliers of parking spaces along major roads and highways nationwide. Of 315,850 parking spaces shown by the study to be currently available, 90% are at commercial truck stops and travel plazas and only 10% are at public rest areas.

SIGMA welcomes this study. We expect the issue of rest area commercialization to be raised again in the context of reauthorization of the federal highway program, next year.

LAWSUIT ON HAZMAT FEES

Fifteen trade associations joined together last week in filing a lawsuit to force the Dept. of Transportation to reduce the annual Hazmat registration fee it collects from transporters and “offerors” of hazardous materials. That fee was increased dramatically three years ago, and the resulting income to the fund has been far more than authorized by Congress. DOT started a “rulemaking” process in 2000 to reduce the fees, as required by law when the fund has a surplus, but keeps postponing action. DOT’s apparent objective is to get Congress to change the law to allow them to keep and spend the additional money. However, until Congress does so, it would appear the current high fees are illegal. The lawsuit seeks an injunction to prohibit DOT from collecting any more hazmat registration fees until it adjusts the rates as required by law.

HAZMAT SECURITY RULES

Based on comments received from members (as requested in prior issues of this newsletter), SIGMA has filed comments with the Dept. of Transportation’s Research and Special Programs Administration (RSPA) which generally support proposed new security requirements. We did, however, raise one significant concern over proposed rules for “shipping papers” to be required aboard each transport truck. Under RSPA’s proposal, those papers would have to include detailed information on both the source of the shipment and its destination. SIGMA pointed out that, while the first part of the requirement can be readily met, under standard industry practices the “terminal ticket” for a load showing its source and the seller does not include any listing of the destination, only of the buyer. And although the driver may have a “truck ticket” telling him where to deliver all or part of a particular load, the instructions may change as trucks are redirected to fill specific needs during the day. In other words, RSPA’s proposal appears to assume that shipments are being made in response to specific orders, which is not generally the case for most independent gasoline marketers. We asked that the combined “terminal ticket” and the “truck ticket” – including an amended after-the-fact truck ticket – be allowed to meet the “shipping paper” requirement. SIGMA’s comments were filed jointly with NACS.

CALIFORNIA “GREENHOUSE GASES”

California’s legislature has approved a bill which would require a significant reduction in the carbon dioxide (CO2) and other so-called “greenhouse gases” from auto emissions starting with model year 2009. If signed by the governor – which he has signaled he is strongly inclined to do – California would become the first state to regulate auto emissions in an effort to combat global warming.

ALTERNATIVE FUELS

Alternative motor fuels – specifically ethanol and biodiesel – continue to make small inroads, even without the proposed “renewable fuel standard” in the pending Energy Bill. Two recent developments:

• The Dept. of Energy has issued some $800,000 in grants to assist in the establishment of an additional 20 fueling stations for E-85 (85% ethanol) across the country.

• SIGMA member Dennis K. Burke Inc. announced in May its station in Chelsea was the first in Massachusetts offering biodiesel – B20 (20% blend) at the pump, and B100 in drums and pails.

MISCELLANEOUS ITEMS

New York’s legislature has unanimously passed a below-cost sales bill for motor fuels. It is a “rack plus cost” bill, patterned after Florida’s, and is expected to be signed by Gov. Pataki.

The second of Unocal’s patents for reformulated gasoline has now been rejected by the Patent and Trademark office. The first patent was rejected earlier this year (on review) on the basis that any average refiner would have used similar methods to make RFG; this rejection was on similar grounds.

EPA’s Inspector General reports that work in Superfund cleanups had been slowed or halted at several key locations because of a shortage of funds. The study, requested by Democrats on the House Energy and Commerce Committee, is likely to fuel efforts to re-impose the Superfund taxes which expired in 1995. Sen. Corzine (D-NJ) has called for oversight hearings on the superfund cleanup and tax issues.

The IRS is reported to be re-examining its 15-year depreciation schedule for gasoline canopies – a position IRS took in 1997 that is in conflict with a 1995 Tax Court ruling allowing 5-year depreciation.