November 3, 2003

Energy Bill: Bush, Cheney, & SIGMA Members Urge Passage

Highway Bill Markup

Leavitt Confirmed for EPA

Congress and Appropriations

SOT on Beer & Wine

Greenhouse Gases

Low-Sulfur Diesel

HAZMAT Transport

Convention Speakers

Miscellaneous

 

ENERGY BILL: BUSH, CHENEY, & SIGMA MEMBERS URGE PASSAGE

A dispute between Senate and House Republican negotiators on how to fund ethanol tax incentives continues to keep the Energy Bill bottled up in Conference Committee.

Early last week, SIGMA began contacting our members, asking them to contact their Senators to urge passage of the Energy Bill. We have already received an overwhelmingly positive response from members to our phone bank efforts. To those who have responded – thank you! But we know there are some members who haven’t yet made those contacts.

               CALL TO ACTION - AGAIN!

If you have not yet done so, we urge you to contact the two U.S. Senators who represent your state and urge them to support passage of the Energy Bill that is pending in the Conference Committee. The bill, while not perfect, contains many provisions that will benefit marketers and the fuels market. Phone calls, faxes, or e-mails are all useful in this campaign. You can look up phone and fax numbers on pages 220-221 of the SIGMA Membership Directory, or call the U.S. Capitol switchboard at 202-224-3121 and they will connect you to your Senator’s office. For e-mail, the best approach is to go to www.senate.gov and click on “find your Senators”, then follow the links for communicating with those from your state. A sample message can be found by clicking here. DO IT TODAY – OR AS SOON AS POSSIBLE!

The major remaining issues in the overall energy bill are in the tax area. The most serious division is over how to pay for tax incentives for ethanol and biodiesel. The bill contains a mandate for the use of renewable fuels, and that is considered certain to remain in place. At issue is whether to fund the tax incentives for ethanol out of the highway trust fund, as has been the case in the past, or out of the general fund – and whether to address this issue as part of the energy bill, or wait and address it as part of the highway bill. If this sounds somewhat arcane, it is – but ultimately it makes a big difference in terms of support for or opposition to ethanol tax incentives in the long run.

Without taking a position on the specifics, President Bush issued a call in a speech in Ohio last week for conferees to work out their differences and “get the bill done.” Vice President Cheney went to Capitol Hill last Wednesday and met initially with Senate Majority Leader Frist (R-TN) and House Speaker Hastert (R-IL), but was expected to also meet with the key conferees. Energy Secretary Abraham has also been meeting with Congressional leaders, trying to break the impasse.

In addition to the policy issues in dispute, there is another factor holding up action on the energy bill: logistics. The key negotiators on energy – Sen. Grassley (R-IA) and Rep. Thomas (R-CA) – are also key negotiators on Medicare reform legislation, which is also tied up on conference committee.

At this point, it is still unclear if an energy bill will emerge from conference committee. SIGMA believes that the provisions in the fuels title of the energy bill that have been worked out so far are very much in marketers’ interests – from underground tank reform to MTBE liability provisions to abolition of the oxygenate mandate in RFG to a provision allowing some blending of compliant fuels at the retail station level.

HIGHWAY BILL MARKUP

In preparation for action early next year on a 6-year reauthorization of the highway program, the Senate Environment and Public Works Committee will have a markup session this Wednesday (Nov. 5) on a draft bill. At this point, there is nothing in the draft dealing with commercialization of Interstate Highway rest areas – but we will closely monitor the markup just in case the issue is raised later. We are also monitoring other proposed revenue-enhancement programs in the bill, to be sure they would not degrade members’ investments at interstate highway interchanges. And we are paying attention to the funding levels for enforcement of excise taxes on motor fuels. Without proper enforcement, tax cheats can operate with impunity and inflict serious injury on legitimate marketers. SIGMA has a long history of fighting tax cheating, and will continue to do so.  

LEAVITT CONFIRMED FOR EPA

Last Monday, the 5 Democratic Senators who had placed “holds” on the nomination of Gov. Michael Leavitt (R-UT) to be EPA Administrator announced they were dropping their objections to moving forward with the nomination. Apparently they extracted agreements from the Bush administration on a variety of environmental issues. The next day, following a 1-hour debate, Leavitt was confirmed on a vote of 88-8. 

CONGRESS & APPROPRIATIONS

Last Thursday, both houses of Congress passed yet another “continuing resolution” (CR) to keep the Federal government running at last year’s funding levels until this Friday, Nov. 7. The bill applies to agencies for which the regular appropriations bills have not yet been adopted. It is unclear what scenario Congress will follow this week. Possibilities include three scenarios: 1) several more of the appropriations bills will be adopted, and another short-term CR (running to Nov. 21) will be adopted to allow more time on the remaining appropriations bills; 2) a longer-term CR, running to Jan. 31, might be adopted, leaving the remaining bills to be resolved early next year; or 3) the remaining spending bills may get wrapped into a gigantic end-of-session “omnibus” bill. As of Oct. 31, a full month into the fiscal year, only 3 of the 13 appropriations bills had been completed and sent to Bush for signature.  

SOT ON BEER & WINE

Voting along straight party lines, the House Ways and Means Committee has approved a tax reform package that includes a 3-year suspension of the Special Occupational Tax (SOT) on sellers of alcoholic beverages. NACS, which has led industry efforts to repeal this per-store tax, says that while they hoped the tax would be repealed, they are nevertheless pleased the committee included the 3-year suspension. 

GREENHOUSE GASES

Attorneys General from eleven states plus DC and American Samoa joined with a dozen environmental groups and the cities of New York and Baltimore in filing a lawsuit on Oct. 23 to challenge EPA’s decision to not regulate emissions that are considered primary global warming gases. California plans to file a separate lawsuit on the same issue. Carbon dioxide is one of those “greenhouse gases” and is a significant emission from most motor fuels. The Administration says it will defend the lawsuit using the same rationale used in the original EPA decision not to regulate. Separately, the Senate rejected a bill that would have required industry to cut back their greenhouse gas emissions. The vote was 43 to 55 against the McCain (R-AZ) - Lieberman (D-CT) proposal. 

LOW-SULFUR DIESEL

As we have reported previously, EPA says that refiners are “on target” to meet the new ultra-low-sulfur diesel standards that begin in 2006. For a copy of the summary of the report, go to www.epa.gov/otaq/diesel.htm. 

HAZMAT TRANSPORT

The Dept. of Transportation’s Research & Special Programs Administration (RSPA) issued a final rule last Thursday, Oct. 30, which details how its hazmat regulations apply to the loading, unloading, and storage of hazardous materials, including gasoline. The rules create a series of definitions which are intended to clarify which parts of loading, unloading, and storage are “incidental to movement”, as well as things that are considered “pre-transportation functions” that are regulated by the agency. SIGMA will be analyzing the rule and digesting it in a detailed legal memo.   

CONVENTION SPEAKERS

SIGMA is excited to announce the names of two key speakers at our upcoming Annual Meeting in San Francisco, Nov. 14-16. Louis Renjel is the Senior Environmental staff member of the Senate Committee on Environment and Public Works. He will be attending our convention, and speaking to the Legislative Committee on the energy bill. He has an extensive background in energy issues, having started with the House Energy and Commerce Committee and then serving as Legislative Assistant for Sen. Inhofe (R-OK) before Inhofe, now Chairman of the Senate EPW Committee. Renjel has been instrumental in drafting the fuels provisions of the energy bill And for our closing luncheon, the speaker is Paul Saffo, Director of the Institute for the Future. He is a forecaster whose specialty is determining the lasting impact of new information technologies on both business and society in general. We hope to see YOU in San Francisco! 

MISCELLANEOUS

There are rumors that Rep. Tauzin (R-LA), Chairman of the House Energy and Commerce Committee may leave Congress at the end of this year to become President of the Motion Picture Assn. of America. His likely successors would be either Joe Barton (R-TX) or Mike Oxley (R-OH) . . . Sen. Bob Graham (D-FL) will announce by tomorrow whether he will seek re-election to the Senate, or instead concentrate solely on his presidential bid . . . And California is now out of its “summer fuel season” and marketers can “comingle” gasoline with ethanol and MTBE. Their season ended Oct. 31; for most of the rest of the country, it ended 9/15.    

SIGMA Weekly Report November 3, 2003 © Copyright SIGMA