Issue link: http://read.dmtmag.com/i/464194
28 Oil Prophets Perils Too Plentiful 7KH¿QDOWZR\HDUVRIWKH2EDPD Administration hold many perils for the petroleum and convenience industries. The President has effectively trammeled the coal industry, and he has the same objective for petroleum. Through regulatory and executive actions, the President will do everything within his power to curb the domestic consumption of gasoline diesel. One easy way to curb consumption is to impose costly regulations, limiting production and increasing prices. PMAA will be doing everything in our power oppose the Presidents anti-oil agenda. The Administration is also pursuing SROLFLHVWKDWZLOOGRVLJQL¿FDQWKDUP to the retail convenience industry. Most notably, last year the President directed the Department of Labor to prepare more stringent rules for retail store managers who are often exempt from overtime rules. In making WKHDQQRXQFHPHQWKHVSHFL¿FDOO\ criticized the convenience store industry for failing to adequately compensate store managers. My instincts tell me that the new rules proposed by the Administration are JRLQJWREHH[FHVVLYHDQGXQMXVWL¿HG and PMAA will need to pursue legislation designed to result in reasonable policies. Here is a summary of other important issues on the horizon in 2015. RFS Reform/Ethanol Blend Wall ,Q1RYHPEHU(3$GHOD\HGD¿QDO decision on setting the 2014 RFS standards including the corn-based ethanol mandate. EPA said the delay is due to differences among stakeholders over how volumes should be set in light of lower gasoline consumption and whether and on what basis the RFS volumes should be waived. The 2014 proposed rule called for a modest reduction to the corn-based ethanol mandate at 13.01 billion gallons to be blended with gasoline. PMAA supports the reduction in ethanol volume because LWZLOOSUHYHQWUH¿QHUVIURPKDYLQJWR cut back production, export production or buy expensive RINs to maintain an E10 blend. Moving to higher ethanol blends including E15 is a major obstacle due to incompatibility with existing UST equipment and potential misfueling. The incoming Republican controlled Congress is also expected to move RFS reform legislation. RFS critics believe the Senate will have nearly 60 votes to pass RFS reform legislation. Meanwhile, DOE's Energy Information Agency is now forecasting about 30,000-barrels a day decline in gasoline consumption in 2015. This further supports maintaining the corn-based ethanol mandate at 13 billion gallons to ease the negative consequences of the blendwall. In 2013, the U.S. consumed approximately 134.5 billion gallons of gasoline which was six percent less than the record high of 142.35 billion gallons set in 2007. It is unclear when (3$ZLOOLVVXHWKH¿QDODQG RFS blending rules. Underground Storage Tanks (3$VHQWDGUDIW¿QDOUXOHRYHUWR 20%IRUUHYLHZDQG¿QDODSSURYDO that would impose onerous new UST requirements on petroleum marketers. The new rule would mandate comprehensive UST system walkthrough inspections, new interstitial monitoring of tanks, pipes and sumps equipped with secondary containment, installation of under dispenser containment, and spill and SHULRGLFRYHU¿OODQGVSLOOHTXLSPHQW testing among other requirements. PMAA has vigorously opposed the rule since it was proposed in 2012 because of the onerous and unnecessary compliance costs it would impose on all UST operators in the form of new inspection and monitoring requirements. The EPA estimates the costs imposed by the new rule would amount to $900 annually while a PMAA study placed the costs to $6,960 per year. In response to the proposed rule, PMAA formed a UST Task Force made up of petroleum marketers and professional engineers to assess the costs of the new inspection and monitoring requirements and draft a less costly alternative proposal. The PMAA Task force has met on multiple occasions with the EPA to discuss its opposition to the rule, won the support of the U.S. Small Business Administration 6%$LQWKH¿JKWDJDLQVWWKH(3$¶V inaccurate small business impact analysis, launched a successful grass roots campaign in Congress to pressure the EPA to delay the rule to reconsider the cost burdens it would impose, and offered an alternative proposal that would achieve the same environmental protection at a fraction of the cost. These efforts by PMAA together forced the EPA to reconsider and redraft the rule. In November, PMAA Task Force PHPEHUVPHWZLWKWKH2I¿FHRI 0DQDJHPHQWDQG%XGJHW20% to express its concerns over the UST rule that is both procedurally ÀDZHGDQGLPSRVHVXQDFFHSWDEOH compliance costs. The OMB is part of WKH([HFXWLYH2I¿FHRIWKH3UHVLGHQW and reviews all proposed federal rules EHIRUHWKH\DUHPDGH¿QDO20% is not allowed to comment on rules under review but they asked a number of questions regarding compliance costs. PMAA does not know which SURYLVLRQVPDGHLWWRWKH¿QDOUXOH currently under review, at the OMB, but it likely contains some of the cost saving alternative measures PMAA recommended. If the agency fails to By Dan Gilligan President, Petroleum Marketers Association of America