December 9, 2002

JUSTICE SEEKING VIEWS ON DRESSER WAYNE BID FOR TOKHEIM

As part of its bankruptcy plan, Tokheim is looking to sell its dispenser operations – Tokheim North America and the Gasboy division. Dresser Wayne, another of the “big three” dispenser manufacturers, is the “stalking horse” bidder for those operations. The Department of Justice’s Antitrust Division has contacted SIGMA, seeking our views and the views of marketers on such a potential combination. We hope to have representatives of the DOJ Antitrust Division present and available for private meetings with marketers at our Winter Leadership Committee Meetings in Denver and the Winter Management Conference in Vail in January (see stories below). However, marketers need not wait. If you have views on this possible takeover of Tokheim by Dresser Wayne, either favorable or unfavorable, you may make them known now through SIGMA’s attorney, Tim Columbus. Contact Tim in confidence at 202-342-8555. 

NEW CONGRESS & ENERGY

The old Congress is gone, and the new Congress doesn’t convene until January. But in areas marketers care about, issues are already being “teed up” for the new Congress, even as jockeying for positions is underway:

• Sen. Mary Landrieu (D-LA) won her runoff election last Saturday, finalizing the Senate breakdown at 51-49 in favor of Republicans. Also on Saturday’s Louisiana runoffs, Democrats unexpectedly picked up a House seat that had formerly been held by a Republican. While not indicative of any national “trend”, Democrats are already going after the Bush Administration on economic issues – something that is likely to accelerate over the coming months.

• In the House, it is not yet clear if Republicans will decide to increase their ratios on committees – something that would put a real squeeze on Democrats. Even without that, new House Minority Leader Pelosi (D-CA) has made it clear she will not necessarily honor promises made by her predecessor, Rep. Gephardt (D-MO), in terms of committee assignments.

• Both House and Senate staffs have started work on a 2003 Energy Bill. They are not starting from scratch – they may build on the legislation that died in conference committee this year. We have every reason to believe that a Renewable Fuel Standard (ethanol mandate) will play a major role in the debate, even though having Sen. Lott (R-MS) in charge of the Senate instead of Sen. Daschle (D-SD) will make it tougher to pass such a provision. Fuel provisions will go through the Sen. Energy Committee, chaired by Sen. Inhofe (R-OK), who has been pro-MTBE but quiet on ethanol. SIGMA is already in the process of meeting with key staffers on the bill.   

TAX AUDITS

Over the next few months, the IRS is conducting a research program designed to more effectively catch tax cheating. As part of that program, 50,000 taxpayers (including 30,000 small business owners who file Schedule Cs) will be audited, with the results complied for future enforcement purposes. Although these audits are for the research program, their impact on the individual taxpayer will be the same as any other audit – with additional taxes, fines, and penalties for disparities that are uncovered.    

FUELS REGISTRATION

EPA has launched a program to enforce its registration and reporting program under Section 211(b) – a program which requires registration and reporting by companies which produce or import gasoline or diesel fuel. Marketers who produce gasoline from components are covered by the rule, as are all refiners and importers of fuels. EPA believes that most companies covered by the rule are registered. However, many of them are not doing the quarterly and annual reports that are required. In addition, companies with over $50 million in annual revenue (excluding taxes) should have signed up with the health effects testing consortium.

In the initial phase, EPA will be contacting registrants and pushing for the required reports. The next phase will be enforcement actions, if voluntary compliance is not forthcoming. If you have questions about this program, please call SIGMA attorney Greg Scott at 202-342-8646, or e-mail him at gscott@colliershannon.com.   

DIESEL SULFUR

SIGMA and the other “stakeholders” in downstream issues about ultra-low-sulfur diesel will be meeting with EPA on Dec. 17 to discuss the next steps in the process. We will be meeting with Margo Oge, Dir.of EPA’s Office of Transportation and Air Quality, looking for ways to address the outstanding issues surrounding fuel liability, transfer documents, fillpipe issues, etc., for the transition to this new fuel. 

SPCC RULES DELAYED

New rules affecting bulk plants and other locations with aboveground storage tanks for fuel are scheduled to go into effect 2/17/03 (new SPCC plans required by that date). However, EPA is reportedly going to “temporarily suspend” the deadlines while looking to change them. SIGMA Associate Member Marathon-Ashland, together with two of our “sister” associations (PMAA and API), had sued EPA over the rule, which was adopted without the required analysis of its impact on small businesses.   

NYC SUED OVER USTS

In a belated victory for SIGMA and other marketer groups, EPA has sued New York City over its failure to comply with underground storage tank rules for city-owned tanks since the 1998 tank upgrade deadline. The city has some 2,000 USTs, many of which have inadequate leak detectors, and many suspected releases have not been adequately investigated, according to the complaint.

SIGMA and other marketer groups have been pointing out for years that EPA had not effectively enforced the tank rules against all tank owners, and had been particularly negligent in enforcing the rules against governmental entities. We applaud this development. SIGMA will be writing to EPA urging that they move quickly to enforce the tank rules against other local government, state, federal, and tribal entities.     

CONVENTION WINNERS

Congratulations to the winners of the trips to the Southampton Princess (drawings during the closing luncheon in Chicago): Flora Ermlich, Petroleum Products Corp., Middletown, PA, and Robert Norris, Jet-Pep, Inc., Holly Pond, AL.     

MISCELLANEOUS NEWS ITEMS

Those who attended the Annual Meeting and wanted a copy of Ed Burke’s slides on biodiesel may download them from his website at www.burkeoil.com/emission/slide1.htm . . . EPA was sued on Dec. 5 to force it to address global warming issues, including carbon dioxide emissions. (SIGMA had been urged to get more involved in this topic, as it relates to mobile sources, during our November Legislative Committee meeting, and we will be discussing it further during the January committee meeting.) . . . Georgia has made its low-sulfur-gasoline standards less stringent for most of 2003. The metro Atlanta standard was supposed to move to 30 ppm on May 1, 2003. Instead, the standard will be 90 ppm from 5/1 until the end of the year, when the federal 30 ppm standard will begin its phase-in nationwide. The change is designed to ensure supply availability . . . The Dept. of Labor proposed last Tuesday to repeal a Clinton Administration rule that allowed the use of unemployment benefits for parental leave for adoption and birth.