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ENERGY PRICE HEARING SCHEDULED
In response to Senate Majority Leader Bill Frist’s (R-TN) call for additional investigations into price gouging and record oil company profits, the Senate Energy and Natural Resources Committee and the Senate Commerce, Science and Transportation Committee will hold a joint hearing on Wednesday, November 11 to "examine reasons for high energy prices.” Witnesses for the hearing will include executives from major oil companies: ExxonMobil, Shell, and ConocoPhillips. The committees will also hear testimony from the FTC and state attorneys general regarding the effectiveness of federal and state consumer protection laws designed to prevent price gouging during supply emergencies
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HOUSE SUPPORTS PRICE-GOUGING INVESTIGATION
Freshmen Rep. Allyson Schwartz (D-PA) and Rep. Tim Bishop (D-NY) persuaded the House of Representatives to approve a motion on November 2 instructing conferees to insist on a Federal Trade Commission (FTC) investigation of gasoline pricing to determine if gouging is occurring. This provision will be part of a fiscal 2006 appropriations bill. The “motion to instruct” is non-binding but it puts the House on record supporting such a study.
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INDUSTRY ULSD WORKSHOP
SIGMA is one of several organizations, including EPA, sponsoring a third multi-day ultra low sulfur diesel (ULSD) fuel workshop in Phoenix, Arizona on November 9 – 11, 2005. SIGMA counsel Greg Scott will be moderating a panel on behalf of SIGMA and NACS that will include large and small diesel marketers who will share what their companies have been doing to prepare for the upcoming rule. This two-and-a-half day meeting will cover all portions of the ULSD rule, including the above-the-rack designate and track requirements for ULSD, terminal handling and truck transport contamination issues, marketer-related issues of dispenser labeling, liability for misfueling, and the liability regime if off-spec ULSD is discovered at a retail outlet. Information on the workshop is available on SIGMA's website, www.sigma.org.
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HAZMAT SECURITY HEARING
The House of Representatives held a hearing last week on the 5-month old hazardous materials truck driver background check implemented by the Transportation Security Administration. Several groups claim the background check is hurting the trucking industry by imposing higher operating costs and deterring drivers from obtaining hazmat endorsements. SIGMA and other groups filed a letter supporting a solution that would limit the background screening process to drivers who haul materials that are truly security sensitive, not everyday products that pose no credible security risk.
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ANWR DRILLING APPROVED
The Senate voted on November 3 to open the Arctic National Wildlife Refuge to oil exploration and to prohibit the export of ANWR crude oil to foreign markets. Senators voted 48-51 to reject an amendment by Sen. Maria Cantwell to strip the ANWR language from the fiscal year 2006 budget reconciliation bill.
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SENATE ENERGY TO TAKE UP HOUSE-PASSED REFINERY BILL
Sen. Pete Domenici (R-NM) announced on Nov. 3 that the Senate Energy and Natural Resources Committee plans to take up the House-passed “Gasoline for America’s Security Act” (GAS Act), H.R. 3893. The bill, as passed by the House, contains these provisions: (1) measures to assist expansion of domestic refineries and permitting reform; (2) new presidential fuel waiver authority during natural disasters; (3) a mandate for a 6 fuel Federal Fuels List and a requirement that all states move to this list by the end of 2008--although implementation of list is suspended if DOE finds it will harm domestic refining capacity; and (4) an FTC study into price gouging. There is no speculation on how the bill will fare in the Senate and Domenici did not comment on when the bill might be ready for floor action.
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FUEL EXCISE TAX MEMO
A detailed memorandum from SIGMA counsel Collier Shannon Scott on recent changes to federal motor fuel excise tax procedures made by this year's highway and energy bills has been posted on SIGMA’s website. Download the document (pdf).
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CHAIRMEN TESTIFY ON CONSUMER PROTECTION
The chairmen of the Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission (FERC) testified before the House Energy and Commerce Subcommittee on November 2, assuring members that the agencies hold responsibilities to consumers, protecting them from price manipulation. With the colder winter months just around the corner, the CFTC and the FERC promised to closely monitor energy markets and the industry.
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EPA ISSUES “ALL REASONABLE INQUIRIES” RULE
The Environmental Protection Agency (EPA) issued its final Superfund Liability Protection rule on Nov. 1, 2005. The rule establishes criteria for entities seeking to buy property that may be contaminated with hazardous substances. The EPA rule: (1) requires an all appropriate inquiry of the site by an environmental professional whose qualifications are set out in the rule; (2) provides that assessments must be conducted in accordance with criteria drafted by ASTM International, which also meet compliance requirements under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); (3) allows for the use of older assessments for properties being acquired, provided those assessments meet current standards; and (4) applies to parties that use grants under the brownfields program to conduct site characterizations or assessments, including state, local or tribal governments. SIGMA will issue a detailed legal memorandum summarizing the rule shortly.
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WINDFALL TAX PROPOSAL
Sen. Jack Reed (D-RI) will offer an amendment to the tax reconciliation legislation that would establish a temporary windfall profits tax on oil companies, diverting a portion of their profits to the Low Income House Energy Assistance Program (LIHEAP), which helps low-income families cope with heating bills. The amendment would levy an excise tax on oil company profits when oil exceeds $40 per barrel, which is the 2004 average crude oil price.
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HIGHWAY TRUST FUND
Transportation industry representatives called on Congress to take measures to prevent portions of the Highway Trust Fund from going bankrupt in the next three years. The U.S. Chamber of Commerce released several recommendations to keep financing highway and transit needs in the future including raising the federal gas tax and indexing it retroactively to 1993. SIGMA generally has opposed any indexing of federal motor fuel excise taxes. Congress will most likely wait until 2006 before making any decisions.
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SIGMA IN BRECKENRIDGE!
It’s that time of the year! SIGMA is teaming up with National Petroleum News (NPN) and Oil Price Information Service (OPIS) to offer the 2006 Executive Leadership Conference at Winter Management (formerly known as the Winter Management Conference) in Breckenridge, Colorado at the Beaver Run Resort and Conference Center, from January 22-25, 2006. This meeting will have all of the fun of the Winter Management Conference with an enhanced educational program for marketer leadership. Following tradition, this meeting is open to a broad-based group within the petroleum industry. If you’ve never attended a Winter Management Conference, this is the time to try it. If you’ve attended in the past, this one will be so unique you’ll not want to miss it.
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DIESEL ENGINE MAKERS RACE TO MEET EPA DEADLINES
Manufacturers of diesel engines for heavy duty trucks and buses are still struggling with design specifications that will allow them to meet federal emissions control requirements. Under the EPA rule, emissions from diesel trucks and buses available for model year 2007 must be reduced through new fuel requirements (ULSD) and engine design specifications. As diesel engine manufacturers race to meet these deadlines, no dominant design approach has emerged according to industry representatives.
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EPA OXY FUELS WAIVER
EPA will not enforce the oxygenated fuels (oxy fuels) requirement in Utah County, Utah for the 2005-2006 wintertime oxy fuels season. A copy of the letter explaining the enforcement discretion can be found on SIGMA’s website, www.sigma.org.
SIGMA Weekly Report November 7, 2005 © Copyright SIGMA, 2005
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