December 22, 2003

EPA Looking to Standardize Rules for RFG "Waivers"

Energy Bill Re-Born?

New Rules: Bulk Terminals

Holiday Schedule

"Early Action Compacts"

Low Sulfur Gasoline

New Leaks Decline

But Who's Counting?

In Memoriam: Lois Coulson

EPA LOOKING TO STANDARDIZE RULES FOR RFG “WAIVERS”

SIGMA was invited to and attended a meeting last Friday, Dec. 19, with EPA Asst. Administrator for Enforcement Bruce Buckheit. Others at the meeting included other industry groups, environmental groups, states, and other EPA personnel. The topic at the informal meeting was supply emergencies (in RFG areas) and what EPA should do about them.

In the past, EPA has looked at each supply emergency in an ad hoc way and made decisions accordingly. The intent of this meeting was to start a process to perhaps formalize the procedures, either through an internal guidance or through a formal rule-making process. This is an informal preliminary process, which will be followed by written comments to EPA (due Jan. 16, 2004), after which EPA will decide whether to pursue a more formal process or to drop the matter.

At the meeting, we made the following key points:

• EPA should let markets work, and should grant waivers from RFG rules only as a last resort.

• When there is a waiver request, EPA should not limit its discussions and investigations about supply to major oil companies and pipelines, but should also talk to independent marketers, independent terminal operators, etc., to get the complete picture.

• When there is a waiver granted, it should be for a set period of time. There should be an “environmental fee” assessed which approximates the cost differential between RFG and the non-conforming product – i.e., penalties for use of non-conforming product should not be set at punitive levels.

• EPA needs to communicate with the regulated community while it is investigating a request for a waiver, and needs to get its decision on such waivers out to all affected parties in “real time” so no competitor is advantaged or disadvantaged because of EPA’s actions.

SIGMA has been urging EPA for some time to come up with a more-formal process for handling supply emergencies, so we are pleased with the current effort. We will be submitting written comments. Members who have suggestions on what should be in our comments are welcome to contact attorney Greg Scott at gscott@colliershannon.com.  

ENERGY BILL RE-BORN?

Rumors abound that the Energy Bill, thought dead by many when it failed to break a filibuster in early December, may be brought back to life in January. According to the “rumor mill”, citing White House sources, Sens. Inouye (D-HI) and Rockefeller (D-WV) are now ready to vote “yes” on cloture, which would be enough to end the filibuster if no other Senators switch their votes the other direction. It isn’t known, however, what it took to get them to switch – and whether the concessions to them will lose other votes. But even then, there is another hurdle in the Senate – an “objection” based on the fact that the bill calls for spending that exceeds the budget. Nobody will say if they think there are enough votes in the Senate to overcome a budget objection, and it may be Republicans, including Sen. Nickles (R-OK), who lead the charge on the budget issues. So stay tuned . . . the on-again-off-again Energy Bill is on-again, at least for this week!    

NEW RULES: BULK TERMINALS

EPA published in the Federal Register last Friday, Dec. 19, a final rule providing new alternative recordkeeping and testing for compliance with air quality standards for bulk terminals and similar facilities. The changes are designed to provide clarification and additional alternatives that enhance flexibility for owners and operators of such facilities. A copy of the rules can be found at Volume 68, Number 244 of the Federal Register, Rules and Regulations, Page 70959-70966.  Click here and enter the page numbers to get a printable copy of the rules themselves. 

HOLIDAY SCHEDULE

The SIGMA office will be closed Thursday, Dec. 25, 2003 and Thursday, Jan. 1, 2004. There will be no SIGMA Weekly Report dated Dec. 29, 2003.  

“EARLY ACTION COMPACTS”

EPA is required to designate new ozone non-attainment areas under the new 8-hour ozone standard in April 2004. However, it is proposing to 33 areas to enter into “Early Action Compacts” that would delay designation as non-attainment in exchange for the areas acting early to come into compliance with the 8-hour ozone standard.

Apparently the way it would work is that EPA would defer until 9/30/07 making their non-attainment status official, and there could be two other further deferrals of designation made. In return, the areas would have “milestones” they would have to reach along the way; failure to meet the milestones would mean they would be dropped from the program and designated as non-attainment, with more rigid rules to follow to come into compliance.

In return for the added flexibility, the 33 areas would have to come into compliance with the 8-hour standard earlier than the law otherwise requires. SIGMA has not yet reviewed the proposal or taken a position on it.

The 33 areas included are:

Appalachian SC area; Austin-San Marcos TX area; Berkeley-Charleston-Dorchester SC area; Catawba SC area; Central Midlands SC area; Chattanooga TN area; Denver CO area; Fayetteville NC area; Haywood County TN; Beaufort SC area; Knoxville TN area; Lower Savannah-Augusta GA area; Memphis TN area; Asheville NC area; Nashville TN area; Longview-Marshall-Tyler TX area; Winchester/Frederick County VA area; Oklahoma City OK area; Florence SC area; Putnam County TN; Roanoke VA area; San Antonio TX area; San Juan County NM; Sumter SC area; Shreveport-Bossier City LA area; Martinsburg WV area; Greensboro-Winston Salem-High Point NC area; Johnson City-Kingsport-Bristol TN area; Tulsa OK area; Hickory-Morganton-Lenoir NC area; Abbeville-Greenwood SC area; Myrtle Beach SC area; and Washington County, MD.

For more information on the proposed rule, call SIGMA attorney Greg Scott at 202-342-8646, or call EPA’s David Cole at 919-541-5565. 

LOW-SULFUR GASOLINE

Effective Jan. 1, 2004, the sulfur content of gasoline produced at refineries is required to drop. Terminals must be in compliance with the lower sulfur levels by Feb. 1, 2004, and retail tanks must be in compliance by March 1, 2004. Maximum and average sulfur levels will drop again Jan 1, 2005 and again Jan. 1, 2006. We have not heard of any problems by refiners in meeting the requirements and do not anticipate shortages as a result of the new rules, at least in the near term.

NEW LEAKS DECLINE

EPA’s fiscal-year-end report says that about 12,000 new releases from petroleum underground storage tanks were reported fiscal 2003, which is down about 60% from the annual historical average. EPA also noted completion of cleanups from 18,500 releases during the year – up 17% from 2002. However, compliance with leak detection and prevention regulations was down slightly – to 72% and 79% respectively to from 74% and 81%. 

BUT WHO’S COUNTING?

In a bit of year-end nostalgia, I feel compelled to note that this is approximately the 750th edition of SIGMA Weekly Report I have had the privilege to write. Thank you to those dedicated SIGMA members who have read every one of my words for the past 15 years!

It’s also nostalgic to remember that, 15 years ago, 100% of the distribution of Weekly Report was by U.S. Postal Service First Class Mail. We introduced fax-broadcast as an option in the fall of 1989, the first association in our industry to do so. Some members still receive the publication by fax broadcast, but fewer each week. As of today, 89% of distributed copies go by e-mail compared to 11% by fax and none by U.S. Mail – and an unknown number access the news here online.  How times change!

                                                                                          Tom Osborne    

IN MEMORIAM: LOIS COULSON

We are saddened to report the death on Friday, Dec. 19, 2003 of Lois Coulson, mother of past SIGMA Board Member Mike Coulson and of Mary Ann Dawkins, both of Coulson Oil Company. She died of pneumonia at Baptist Hospital in Little Rock, Arkansas. Visitation is Sun., Dec. 21, 4-6 pm at Roller-Chenal Funeral Home, 13801 Chenal Parkway, Little Rock, with funeral services on Mon., Dec. 22, at Immanuel Baptist Church, 501 N. Shackleford, Little Rock. Our deepest sympathy to Mike, Beth, and Mary Ann.  

SIGMA Weekly Report December 22, 2003 © Copyright SIGMA