National Petroleum News (NPN) has been the independent voice of the petroleum industry since 1909 as the opposition to Rockefeller’s Standard Oil. So, motor fuels marketing and retail is not just a sideline for us, it’s our core competency.
Issue link: https://read.dmtmag.com/i/108236
TOP OF THE NEWS Congress Votes to Reinstate Biodiesel Tax Incentive Legislation covers 2012 and 2013 T he U.S. House cleared a year-end fiscal package in January that reinstates the biodiesel tax incentive for 2012 and 2013. President Obama is expected to quickly sign the bill into law. The biodiesel tax incentive expired on Dec. 31, 2011. A recent study found that the industry would have produced an additional 300 million gallons this year with the tax incentive in place. That would have supported some 19,213 additional jobs, for a total of 83,258 jobs n API says: Repeal RFS Repeal of the Renewable Fuels Standard, approval of the Keystone XL pipeline, and less onerous and costly regulations could contribute to a more robust, competitive refinery sector that would continue to support the U.S. economy and strengthen national security, the American Petroleum Institute (API) says. To that end, the Institute started running a new television ad nationwide to highlight the critical role of refineries. The ad is part of an API campaign, "Investing in America's Future," designed to highlight the contributions of the oil and natural gas industry to the economy. The campaign includes TV, print, radio, and online ads running inside the Beltway and nationally. It launched Jan. 15 and will continue to run over the coming months. "Our nation's energy future has never looked better, in large part because of our rapidly advancing ability to tap into vast new oil and natural gas resources right here in the United States," API Refining Senior Manager Cindy Schild said in a Jan. 15 statement. "But a strong energy future for our nation depends also on our ability to refine and distribute the fuels from these resources." One place to start, Schild said, is with repeal of the Renewable Fuels Standard or RFS. "API supports the use of renewable fuels, but the RFS is simply unwork January/February 2013 supported by the industry nationwide, according to the study, conducted by Cardno ENTRIX, an international economics consulting firm. Looking to next year, the study found that the industry would support some 112,078 jobs nationally with the tax credit in place versus 81,977 without it. Additionally, the return of the incentive is projected to increase household income by some $1.6 billion next year while supporting an additional $3.1 billion in GDP. able," Schild said. "Its continuing implementation requires concentrations of ethanol in gasoline above levels that are safe for vehicles and gas station pumping equipment." Schild said the law also requires refiners to purchase credits for failing to blend cellulosic ethanol in motor fuel, "even though none is commercially available. So we are, in effect, penalized for not using a fuel that doesn't exist. "Despite repeated and ongoing efforts to address the RFS program's shortcomings—through regulatory petitions, legal actions, and suggested solutions to implementation concerns—EPA has been unable, and sometimes unwilling, to make it workable. That's why we need Congress to scrap the program altogether," Schild said. n EIA Forecasts for 2013 Regular-grade gasoline retail prices will average $3.44 per gallon and $3.34 per gallon in 2013 and 2014, respectively, according to the Short-Term Energy Outlook published Jan. 8 by the Energy Information Administration (EIA). The EIA notes that, despite similar crude oil prices during 2011 and 2012, U.S. monthly average regular gasoline retail prices increased from an average of $3.53 per gallon in 2011 to average $3.63 per gallon in 2012, driven partly by isolated refinery outages and lower inventory levels on the East and West coasts. U.S. regular gasoline retail prices fell from an average of $3.85 per gallon in September 2012 to an average of $3.31 per gallon in December, which was the lowest average since December 2011. On-highway diesel fuel retail prices averaged $4.12 per gallon in September 2012, and continued tight market conditions and strong demand for exports kept on-highway diesel fuel prices at an average of $3.96 per gallon in December. On November 23, 2012, U.S. week-ending stocks of distillate fuel oil fell to their lowest level since May 30, 2008, despite the higher expected demand during the current winter heating season. Distillate inventories have since recovered, especially in the Northeast, though still remaining well below their five-year average. After averaging $3.97 per gallon in 2012, EIA expects that on-highway diesel fuel retail prices will average $3.87 per gallon in 2013 and $3.78 per gallon in 2014. Wholesale diesel margins (the difference between the wholesale price of diesel and the U.S. average refiner acquisition cost of crude oil) averaged $0.60 per gallon in the first half of 2012, and then climbed to an average of $0.92 per gallon in November, the highest monthly average since October 2005. EIA projects wholesale diesel margins will average $0.75 per gallon in 2013 and $0.63 per gallon in 2014, compared with the previous five-year (2007-11) average of $0.54 per gallon. NPN Magazine n www.npnweb.com