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March 28, 2005
CONGRESSIONAL RECESS
Although Congress will be on Easter recess through this week, they will return on April 4 to a busy schedule. The House Energy & Commerce Committee is expected to conduct a mark-up of its version of national energy policy legislation on April 5th and 6th. There are several issues of interest to SIGMA that will be covered in the mark-up, including the Renewable Fuels Standard (RFS). The draft House energy bill (which has not yet been given a bill number, but which is virtually identical to the Conference Report on H.R. 6 from the 108th Congress) would require the use of 5 billion gallons of ethanol and bio-diesel by 2012. S. 606, which was approved by the Senate Environment and Public Works Committee before the Easter recess, would mandate a 6 billion gallon RFS. In a sign that this higher Senate RFS number may not satisfy some backers of ethanol and biodiesel, a new bill — the Fuels Security Act of 2005 — was introduced by Sens. Richard Lugar (R-IN) and Tom Harkin (D-IA) before Congress recessed. This bill would raise the RFS to 8 billion gallons in 2012. RFS supporters are likely to attempt to increase the House bill's mandate to at least 6 billion gallons during the mark-up. Additional items which may be subject to amendment during the mark-up are:
- MTBE Safe Harbor provision;
- Repeal of the Oxygenate Mandate;
- Blending of Compliant Fuels provisions;
- Federal LUST program reforms
Weekly Report will cover new developments on this mark-up as they become available.
NEW PETROLEUM REFINERY
In news last week, the Environmental Protection Agency will allow the state of Arizona to issue a permit for the first new petroleum refinery to be built in the U.S. since 1976. As approved by the EPA and ADEQ (Arizona Department of Environmental Quality) the new refinery will be built 100 miles west of Phoenix in Yuma County. This is another step in a long process that has thus far taken 8 years. It is unclear as to when the refinery will be under construction.
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CREDIT CARDS CLOCK WEB TOBACCO SALES
Major credit card companies including Visa, Mastercard, Discover and American Express will no longer process Internet sales of cigarettes and other tobacco products under a nationwide agreement. Effective immediately, the rule is aimed at illegal dealers who try to avoid sales taxes or sell to minors. All of these credit card companies signed agreements with attorneys general from several states and the federal Bureau of Alcohol, Tobacco and Firearms. This is good news for independent marketers, but it is only the first step in dealing with an illegal practice that has gone unchecked for several years. Customers will still be able to buy cigarettes over the Internet with checks, money orders or other payment systems. The ATF estimates that several million dollars from illegal cigarette sales are funneled each year to terrorists and criminal organizations.
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TOUGH HAZMAT LAWS
Legislation that would require the Department of Homeland Security to issue regulations imposing additional security requirements of shipments of extremely hazardous materials was reintroduced in Congress last week by Rep. Edward J. Markey (D-MA). Proposed regulations include creation of terrorism response plans, dangerous route designations, and implementation of physical security measures including passive secondary containment of tanker valves. It is anticipated that Sen. Jon Corzine (D-NJ) will introduce a similar bill in the Senate.
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IOWA APPROVES E85 BILL
The Iowa House Agriculture Committee has recently approved a proposed bill that would increase the availability and the use of ethanol and soy biodiesel in the state. The Iowa Renewable Fuels Association (IRFA) reports that the legislation would create a cost-share program to assist fuel retailers in setting up facilities that would support E85. IRFA hopes to have at least 30 E85 stations in the state over the next three years. This is similar to a program set up in the state of Illinois that offers incentives to stations to build E85 facilities.
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EPA STUDIES FLORIDA TANKS
The Environmental Protection Agency recently released a draft study of petroleum leaks at underground storage tank facilities in Florida. The study found that dispensers, piping, and fuel delivery were the most frequent sources of leaks. Only 12 percent of all leaks, according to the study, occurred in the tanks themselves. The draft was sent out for peer review and EPA expects that this study and a companion report will help it to evaluate the performance of underground storage tanks across the country.
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SIGMA GENERAL SESSION
Don’t miss the SIGMA/OPIS Business Meeting /General at the Spring Convention in Amelia Island, FL. Here’s what’s in store for the session which will be held Thursday, May 5:
“The Future of U.S. Gasoline Marketing: One Major's Perspective”
John Melo, President, US Fuels Operations, BP
Never before has fuel volatility been so high, or downstream competition so fierce. Yet, BP is more bullish now than ever on its prospects for downstream sales and profits. Get a peak into the thought process of a company that thinks globally when it comes to marketing light fuels, and find out how the U.S. markets shape up from a company that has combined commodities' trading expertise with a branded and unbranded marketing strategy.
“Keys on Staying a Leader in U.S. C-Store Marketing”
Jim Keyes, CEO, 7-11
When you think of successful C-store chains, 7-11 is at the top of the list. Hear directly from 7-11 CEO Jim Keyes what it takes to be a c-store leader in today’s changing times. From systems to strategies for both fuel and inside profit centers, Keyes will draw on his 15 years of experience with 7-11 to share his thoughts on what separates winners from losers in the dynamic c-store marketplace.
“SIGMA/NPN Station Resuscitation”
Stewart Spinks, CEO, Spinx Oil Company; Joe Stark, CEO, Top Star, Inc.; Jim Fisher, CEO, IMST Corporation; Michael Lawshe, Paragon Solutions;
NPN Station Resuscitation is a three-part education series devoted to breathing life into tired sites. It involves two industry consultants working together to help two marketers resuscitate a site that is falling short of its maximum potential. Part one of the project was presented at the 2004 SIGMA Fall Annual Meeting in New Orleans. It covered initial site evaluations and recommendations. The second part will be presented at the 2005 SIGMA Spring Convention in Amelia Island, Fla., and will give audience members an update on the construction and redesign process for each site. This is a real-time education project, so it will cover the multiple changes in the site plan and why those changes were made. This session will be an exciting part of the overall NPN Station Resuscitation project. Visit SIGMA’s website for daily updates to the conference schedule!
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NY GAS SPILL SETTLEMENT
ExxonMobil Corp. and Arrow Petroleum Inc. will pay a total of $3.8 million to settle a 1992 New York State Lawsuit seeking reimbursement of the costs of cleaning up two adjacent gasoline station properties. Evidence introduced at the trial in February showed Exxon had several leaking problems. Spills at the Arrow station were blamed for gasoline contaminated soil during the removal of an underground storage tank. $2.4 million has already been spent by the state Department of Environmental Conservation and a state Oil Spill Fund for the remediation process. The remediation primarily treated contaminated groundwater at the two filling stations and surrounding areas.
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THANKS TO SIGMA SPONSORS
SIGMA would like to thank all of the organizations who have committed to sponsoring SIGMA’s Spring Convention to be held May 3 – 6 in Amelia Island, FL.
Gold Sponsors: American Express; Dresser Wayne; Flint Hills Resources; Gilbarco Veeder-Root; TransMontaigne Product Services, Inc.; Valero Energy Corporation; Wright Express Corporation
Silver Sponsors: CITGO Petroleum Corporation; ExxonMobil; Miller Brewing Company; PDI; SUNOCO
\Bronze Sponsors: Boyd Coffee Company; CBE; CitiCapital; Dencor Energy Systems; DTN Energy; FCStone, LLC ; Fleet One, LLC; Havana Honeys; Matrix Capital Markets Group, Inc.; McLane Company; Merrill Lynch; Murphy Futures, Inc.; Nestle Waters USA; Skyline Electronic Price Displays; Subway®; The Pinnacle; Corporation; The Lubrizol Corporation; Work’NGear.
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SIGMA Weekly Report March 28, 2005 © Copyright SIGMA, 2005
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