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Issue link: https://read.dmtmag.com/i/25410
TOP OF THE NEWS Marathon creating two strong independent companies Dividing into downstream and upstream T he Board of Directors of Marathon Oil Corp. has announced that it has approved moving forward with plans to spin off Marathon’s downstream business, creating two independent, highly focused energy companies. Marathon Petroleum Corp. (MPC), to be headquartered in Findlay, Ohio, is expected to be the fifth largest U.S. refiner with a top-tier downstream portfolio of strategically aligned assets concentrated mainly in the Midwest, Gulf Coast and Southeast regions of the U.S. Marathon Oil Corp. (MRO) will be a global upstream company with a strong portfolio of assets delivering defined growth leveraged to crude oil production and with explo- ration upside. MRO will continue to be based in Houston, Texas and trade on the NYSE under its ticker symbol “MRO.” “The substantial improvement in the global business and financial environments over the last two years has created the conditions under which we believe it is now appropriate to move forward with the formation of two strong inde- Engine Products Group challenges EPA’s partial waiver for E-15 The newly formed Engine Products Group (EPG), comprising the Alliance of Automobile Manufacturers (Alliance), The Association of International Auto- mobile Manufacturers, Inc. (AIAM), the National Marine Manufacturers Associ- ation (NMMA), and the Outdoor Power Equipment Institute (OPEI) filed a peti- tion Dec.20 challenging the Environmen- tal Protection Agency’s (EPA) decision to grant a partial waiver approving the sale of gasoline containing 15 percent ethanol (E-15) for 2007 model year and newer passenger cars and light trucks. The petition, filed with the U.S. Court of Appeals for the District of Columbia Circuit, asks that EPA’s deci- sion be remanded back to the Agency and requests judicial oversight and review over whether EPA’s “partial waiver” approval for E-15 fuels violates the federal Clean Air Act provisions, which expressly limit the circumstances under which EPA can approve applica- tions for new fuels and fuel additives. 6 JANUARY/FEBRUARY 2011 pendent energy companies,” said Clarence P. Cazalot, Jr., Marathon president and CEO. The benefits of creating these two operationally and financially strong energy companies include: • Enhanced flexibility to pursue tailored strategies • Superior transparency/improved investor focus • Strengthened ability to attract and retain talent Commenting on the benefits of spinning off the down- stream businesses, Gary R. Heminger, Marathon Oil Corp. downstream executive vice president and designated presi- dent and CEO of MPC, said, “With a fully aligned down- stream business Marathon Petroleum Corp. will have the ability to pursue a strategy specific to the strengths we have developed over many years. We will remain focused on growing shareholder value, retaining and attracting talented employees, further building the valued relationships we have with our many customers and business partners, and improving the transparency of our business segments.” The petition challenges the ability of EPA to grant a partial waiver for three specific reasons. • The Clean Air Act does not authorize EPA to issue any “partial waiver” deci- sions • EPA’s own statute passed by Congress in 2007 states that fuels can’t be approved for the market that could cause any failures. Yet, E-15 has been shown to adversely affect engines in non-road products and later model year vehicles, cause emission failures and increase air pollution due to mis- fueling. Further, administrative records fail to demonstrate that even new model year motor vehicles (other than “flexible fuel vehicles”) would not be damaged and result in failures when run on E-15 • The testing, upon which EPA made its decision, was put in the administra- tive record too late to permit mean- ingful comment or scrutiny from concerned groups and stakeholders. Growth Energy, an ethanol indus- try trade group, petitioned the EPA in March 2009 to raise the limit on ethanol in gasoline from 10 to 15 per- cent. Several engine product and auto manufacturers as well as others urged EPA to be deliberative in its review process, assuring thorough and ade- quate testing to assure that E-15 would not harm existing products or pose safety risks. By approving E-15 use in a small subset of engines on the road, there is a high risk that con- sumers will unknowingly or mistak- enly put E-15 in products for which it has not been approved. INDUSTRY ANNOUNCEMENTS Crompco wins Hess award Hess’ Retail Marketing business recent- ly honored Crompco, a Plymouth Meeting, PA-based underground tank testing company,with the Maintenance Contractor of the Year Award. Hess honored Crompco with the award at their Annual Hess Best Practices meet- ing and gala dinner in Florida. The event brings together Hess’ preferred NPN Magazine www.npnweb.com