PMAA Protecting and Advocating on Behalf of Petroleum Marketers on Capitol Hill R O B U N D E RW O O D P R E S I D E N T P E T R O L E U M M A R K E T E R S A S S O C I AT I O N O F A M E R I C A ( P M A A )
PMAA s Mission Statement PMAA s Primary Mission and My Mission as President is Pretty Simple: It is to ensure that petroleum marketers are protected against onerous legislative and regulatory issues that could impact their bottom line. PMAA is made up of 47 state and regional trade associations.
So what s dominating the discussion on Capitol Hill? So far we ve had a total of 219 bills signed into law this Congress mostly naming post offices. The five year highway bill signed into law doesn t include a gas tax increase. More later on this. Senate still continues to debate on an energy efficiency bill unclear if this will become law. Trump, Zika, Rubio running for Senate now. Pretty much a stalemate now until the elections lame duck could be interesting Likely case for September. CR thru November elections and then
Ethanol Mandate EPA proposed ethanol volume for 2017 (14.8 billion gallons, 10.4 percent) 2017 amount is less than the renewable fuel target set by Congress in 2007. Congress gave the EPA authority to lower the mandate if the EPA felt the market wasn t ready for higher blends. Bill introduced, known as The Food and Fuel Consumer Protection Act, (H.R. 5180), that caps the corn ethanol mandate at 9.7 percent of projected gasoline demand. PMAA fully supports. This will reduce RIN prices and allow jobbers to compete with the big chains. Bills also introduced to extend the Reid Vapor Pressure (RVP) waiver for E15. PMAA is opposed.
EPA UST Final Rule PMAA s UST Task Force worked closely with the Small Business Administration (SBA), The White House Office of Management and Budget (OMB), key members of Congress as well as EPA s Office of Underground Storage Tanks to reduce compliance costs on tank owners to the greatest extent possible. PMAA convinced the EPA to drop regularly scheduled testing of the interstitial spaces of UST secondary containment equipment. PMAA was able to delay testing and inspection requirements for three years instead of the EPA s proposed 90 day implementation schedule. PMAA also met its third primary goal to reduce the frequency of sump inspections from 30 days to once per year.
UST Final Rule Continued PMAA UST Task force reduced annual costs of the final rule from $6,966 per site to $2,377 per site. Overall, total annual compliance costs on the industry were reduced from $1.5 billion to $530 million as a result of PMAA s efforts More work remains to further reduce compliance costs and burdens imposed by the final rule. PMAA believes the current test method for sumps is seriously flawed and unnecessarily expensive. Former PMAA Chairman Matt Bjornson (Bjornson Oil Co. Fargo, North Dakota) is now on PEI s RP1200 recommended UST practices committee.
DOL Manager Overtime In May, the Dept. of Labor finalized the manager overtime rule. Requires companies to pay exempt employees a minimum of $47,476 starting Dec. 1, 2016 with automatic threshold increases every year thereafter. Current standard $23,660. Companies may be forced to cut bonuses and benefits to boost the managers base salaries and lower hourly rates to compensate for the expense of paying salaried managers more. Or companies will just move salaried employees to hourly. Bills introduced that would nullify the final rule and require the DOL to consider the economic impact the rule would have on the business community. Bill also introduced by four House democrats to delay implementation by three years. Unfortunately, Obama will veto. Only other avenue to defeat it. Trump Train becomes President.
DOT Placarding Petroleum marketers have been able to placard cargo tank vehicles to the lowest flashpoint of the products contained in separate compartments of the cargo tank. The Pipeline Hazardous Materials Safety Administration (PHMSA) now limits placarding to the lowest flash point to shipments where at least one cargo tank compartment contains gasoline. So if it s straight diesel fuel then they have to change to the diesel placard. Petroleum marketers must invest approximately $500 per cargo tank vehicle to switch out permanent placards with new interchangeable placards. PMAA secured language in a bill reauthorizing PHMSA to go thru a formal rulemaking process. Possibly delay thru the approps process.
Weights and Measures (10 micron filter Mandate) PMAA Victories Once again, PMAA defeated the 10 micron filter mandate at the National Conference on Weights and Measures (NCWM) in July. Current standard is a 30 micron filter at NCWM. Total Cost: $230 additional per month due to having to change diesel filters more often. Overall cost to the industry $207 million. PMAA argued that diesel fuel can be contaminated from many parts of the supply chain. Refiners and terminals should filter before it gets to the marketer. PMAA study showed -- Moving to a 10 micron filter will not solve the problem due to carboxylic salts getting through filters as low as 2 microns which are causing internal injection clogging issues in high-pressure common rail diesel engines. New item included: UST Water Tolerance Level- was kept informational and couldn t be voted on. PMAA urged L&R Committee to keep informational for the time being.
Wetlines Win Cost to retrofit a truck $8,000. Wetlines mandate would result in more deaths during the retro-fit installation of purging devices in existing equipment than would be saved from wet line rupture due to traffic accidents. PMAA successfully lobbied for a cost benefit analysis provision in the Highway Bill (2012) which prevented DOT from arbitrarily adopting a wetlines mandate. In September 2013, the GAO cited that DOT did not have adequate information to determine whether a wetlines device mandate was necessary to improve safety. PMAA secured language in the bipartisan highway bill that was signed into law which effectively kills the wetlines proposed rule for good.
Motor Carrier Financial Responsibility Requirements Last year, the Federal Motor Carrier Safety Administration (FMCSA) publicly entertained the idea of increasing requirements to as much as $10 million for petroleum marketers from the current $5 million for gasoline. Premiums would be increased approximately 500 percent. FMCSA also ignores market forces in the insurance industry. PMAA secured language in the highway bill to force FMCSA to study the issue before moving forward.
Total Savings to Industry UST Final Rule: $970 million in savings. 10 Micron Filter Mandate: $207 million in savings Wetlines Mandate: $120 million in savings Approx. $1.3 billion in savings. PMAA saved $162,500 per marketer. And these are Not just one time costs. Additional Savings: FMCSA ANPRM to increase premiums from the current $5 million for gasoline and other hazardous materials to $10 million. Finding more reasonable UST compliance rules. Fighting against the corn ethanol mandate to avoid breaching the E10 blend level.
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