October 14, 2002

ENERGY BILL: THE PROGNOSIS CHANGES DAILY

Congress is inching towards a recess for the mid-term election campaign, and also toward an eventual adjournment sometime after a lame-duck session in late November and early December. Every Congressional session witnesses a fair amount of “end game” politics. But even by those standards, what is happening this year is extraordinary.

Last Week, both the Senate and House passed resolutions authorizing the President to go to war against Iraq. They also took final action and sent to the President the Defense and Military Construction Appropriations bills – two of the 13 needed to fund the government for the fiscal year that is already well underway. Instead of acting on the other eleven funding bills, Congress passed a third “continuing resolution” (CR) to keep the government funded at last year’s levels through this Friday, Oct. 18. Congress will be back in town this Wednesday and Thursday, Oct. 16 and 17, and will attempt to get a little more of its business completed on those days. Then the plan is to pass another CR to keep the government in business through sometime in November – probably through Nov. 22 – and go home to campaign for re-election, leaving the tough decisions for the lame duck session, or to the new Congress.

Also mixed into the equation are several contentious bills which have been subject of much work this session, but which are far from final agreements: terrorism insurance, creating the new Dept. of Homeland Security, and – of particular interest to marketers – the comprehensive Energy Bill. Many on both sides of the aisle want to see these three pieces of legislation pass – but perhaps they don’t want it badly enough to make the tough compromises.

In this climate, “minor” legislation doesn’t have much chance of getting Congressional attention. Underground Storage Tank program reform (such as Sen. Chafee’s bill, which SIGMA generally supports) is probably dead for this Congress. There may be a chance for some action if an energy bill starts to move, but it will likely be only a 1-year extension of the program as currently authorized.

And where does the Energy Bill stand? Well, there were no public meetings all last week of the energy conferees. A meeting scheduled for Tuesday was canceled. Although there were reports of behind-the-scenes meetings among individual conferees, the prognosis for comprehensive energy legislation is growing dimmer. There is still substantial deadlock on a wide range of issues, including electricity proposals (an all-night negotiating session failed to resolve differences), drilling in the Arctic National Wildlife Refuge or ANWR (some Senators are threatening to filibuster this issue if it gets to the floor of the Senate), global climate change, and fuel issues. Specifically in the area of fuels, it appears that efforts to make the ethanol mandate (Renewable Fuel Standard) palatable to SIGMA and our allies in the motor fuels industry have brought new opponents out of the woodwork. In fact, last week a coalition of environmental groups sent a letter to the leadership of Congress suggesting that they let the energy bill simply die.

Is it dead? We don’t know. The prognosis changes from one day to the next, as we are told it has “no hope” and then some new possibility crops up. Currently there are three major possibilities. It is possible that conferees WILL reach agreement on electricity issues, and from there the other issues will “fall into place” and a bill will be enacted by this Congress. A second possibility is that conferees will give up on a comprehensive bill, and settle for “energy lite” – a bill addressing only the issues that have been resolved, leaving the big contentious issues for another day. The third possibility is that the bill will simply die.

Will we know by the end of this week which it is? Maybe so, maybe not. It is possible that an effort could still be made to resolve differences and enact a bill during the planned lame duck session. 

NOMINATING COMMITTEE

SIGMA’s Nominating Committee submits the following nominees for Officers and Directors:

For one-year terms as Officers:

President: Michael Ports, Ports Petroleum Co., Inc., Wooster, OH

First Vice President: Arthur J. DeBlois, III, DB Companies, Inc., Providence, RI

Second Vice President: William S. Shipley, III, Shipley Stores, Inc., York, PA

Secretary/Treasurer: Paul D. Reid, Reid Petroleum Corp., Lockport, NY

Immediate Past President: Thomas L. Robinson, Robinson Oil Company, San Jose, CA

For three-year terms as Directors:

Mark Hansen, Venture Fuels, LLC, Onalaska, WI

Al Howerton, QuikTrip Corporation, Tulsa, OK

Jack C. Pester, Pester Marketing Company, Houston, TX

Matthew Thornton, Thornton Oil Corporation, Louisville, KY

Filling a one-year vacancy as a Director:

Carl Boyett, Boyett Petroleum, Modesto, CA

The elections will be held during the business meeting during the Annual Meeting in Chicago, Sunday morning, Nov. 10, 2002. Please refer to the SIGMA bylaws contained in your Membership Directory for information on other nominations and/or details of voting. This constitutes the notice of nominations required under the bylaws.    

MISCELLANEOUS

SIGMA and NACS sent our joint letter last Tuesday, as planned, to the chairman and vice chairman of the Senate Indian Affairs Committee regarding the proposal to recognize six tribes in Virginia. Our position is that no new tribes should be recognized until the issues of equity in collection of state taxes on tobacco and motor fuels are resolved . . . California, which is frequently on the “leading edge” of rules that eventually spread nationwide, enacted the following six new laws this year that might fit that pattern: 1) Employees must be allowed to use sick leave to take care of a spouse, partner, or parent, without threat of discipline; 2) The state disability program is expanded to provide benefits to those taking unpaid leave to care for a parent, child, etc.; 3) Vehicles carrying hazardous cargo must be equipped with a working 2-way radio as of 1/1/03; 4) New USTs must be vapor-tight; 5) Used oil transporters must get signature of clients if any of the used oil goes immediately or eventually to a facility where it is not recycled; and 6) The state will replace stamps and meter impressions on cigarette packs with stamps or meters that are readable by a scanner.    

SPCC RULE INTERPRETATIONS

In response to questions from SIGMA, PMAA, PMAA’s Iowa affiliate, and the Independent Lubricant Manufacturers Assn., EPA has issued a “Question-and-Answer Document” dealing with the recently-revised SPCC rule (Spill Prevention, Control, and Countermeasures). The document will help marketers know what EPA expects, and is to be used by EPA and state inspectors in enforcing the rule. If you are involved with a terminal, bulk plant, transport, or have other aboveground storage of petroleum products, you should review this.

DIESEL WORKSHOP IN HOUSTON

The Diesel Sulfur Workshop that we have mentioned previously is now definite. Supported by EPA and co-sponsored by SIGMA, NACS, and NPRA, it will be held in Houston, Texas, at the Westin Galleria, November 20-21. If diesel fuel is a significant part of your business, this is a workshop that will be of great value to you in advance planning.

Each session of the workshop will include industry panelists and EPA officials. In general, questions addressed will be those which have been submitted in advance, so that EPA can have authoritative answers to provide during the workshop. The session will begin around 10:00 am on Nov. 20, and conclude around 1:00 pm on Nov. 21.

Issues will be taken up in the following order, by five separate panels: •Refiners; •Pipelines; •Terminals; •“Below the Rack”, including marketing and trucking; and •Issues common to all segments: testing, liability, supply.

This is an implementation workshop, NOT a time to argue against the coming ultra-low sulfur. Despite our best efforts, the new 15 ppm sulfur diesel is going to be required. This workshop is a chance to answer operational questions to let you prepare for the transition. Any question YOU have, please contact Greg Scott right away, so they can be included in the workshop. E-mail him at gscott@colliershannon.com.

Registration for this workshop is $100, which will serve to defray the costs of a couple of meals. For full details, and to register for the conference, go to www.npradc.org.