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2.17.23: Energy Marketers of America Weekly Update

2.17.23: Energy Marketers of America Weekly Update

Energy Marketers of America weekly update on important national industry news
February 17, 2023  [WR-23-07]
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Quick Links to Articles for February 17, 2023

EMA Washington Conference and Day on the Hill – May 10-12, 2023: Please Make Your Hotel Reservation and Register Now

Capitol Hill Update

EMA Files Comments on RFS Proposed Rule

Price Increases and Supply Shortages Predicted for Seven Midwest States Planning to Shed One-Pound RVP Waiver for E10

Multi-State Hours of Service Waiver Extended for Gasoline, Diesel and Jet Fuel

Weekend Reads

Federated Insurance: Risk Management Corner

EMA Member Services Spotlight Featuring: National Purchasing Partners (NPP)

Articles for February 17, 2023
EMA Washington Conference and Day on the Hill – May 10-12, 2023: Please Make Your Hotel Reservation and Register Now

EMA’s annual Washington Conference and Day on the Hill will be held in Washington, DC from May 10-12 at The Mayflower Hotel. Our industry continues to have dozens of important legislative and regulatory issues to discuss and the Day on the Hill remains the primary focus of this conference for you to meet with your members of Congress and network with other marketers from across the country!

You can find all conference details by CLICKING HERE from how to make your hotel reservations, to viewing the conference schedule and registering with secure event payment processing. Registrations must be received by April 28 to be included in our hotel guarantee.

Capitol Hill Update

The House was out of session this week, but that hasn’t stopped House Natural Resources Chairman Bruce Westerman (R-AR) from making news regarding permitting legislation in the 118th Congress, noting that he would use Rep. Garret Graves’ (R-LA) BUILDER Act from last Congress as a starting point. The BUILDER Act would have updated the National Environmental Policy Act (NEPA) implementation by expediting the timeframes for energy projects to undergo NEPA review. Sen. Cynthia Lummis (R-WY) was hopeful that this first step could help gain some traction in the Senate for similarly positioned legislation. On the other side of Congress, Sen. Mike Braun (R-IN) may be inching closer to forcing a vote on legislation that would block Biden Administration priorities, starting with a resolution to reverse a Department of Labor rule allowing ESG to be considered in retirement plans. This is in response to a Biden Administration rule allowing retirement plan managers to consider ESG in its investments in addition to its fiduciary duties. If this passes, the requirements for retirement plan managers would revert to mandating decisions in the interest of securing the best possible returns. Sen. Deb Fischer (R-NE) also has a resolution pending that would invalidate new EPA emissions standards for trucks from taking effect.

In addition, Alaska’s Senators have taken a stern position towards the White House should it seek to regulate ConocoPhillips’ Willow Oil project to death. Still, with the President citing “climate peril,” this fight may continue. Separately, Congressional Democrats are looking to see if the remaining $1.5 billion in funding for the Low-Income Home Energy Assistance Program (LIHEAP) can be released expeditiously, writing to HHS Secretary Xavier Becerra requesting the remaining funds (of $6 billion) be released as “quickly as possible.” Also, this week – which DOT deemed EV week – the White House and the Federal Highway Administration (FHWA) released guidance surrounding EV charging infrastructure, including releasing the Build America, Buy America (BABA) Requirements for the $5 billion National Electric Vehicle Infrastructure (NEVI) formula program. Still, FHWA will issue BABA waivers for EV chargers manufactured before July 1, 2024, if the final assembly is completed in the U.S.

Finally, the Merchants Payments Coalition filed a comment letter with the Federal Trade Commission (FTC) regarding “Mastercard’s tokenization policies and violations of Federal Reserve Regulation II.” The letter notes that limited competition in the payments space hurts competition and harms retailers and their customers, and notes that they had not been treating Card Not Present (CNP) tokenized transactions (like Apple Pay) the same as Card Present (CP) tokenized transactions. Given the already-slim margins under which retailers operate, this is a make-or-break issue for a lot of small business owners.

EMA Files Comments on RFS Proposed Rule

Recently, the Energy Marketers of America (EMA) filed comments on EPA’s Renewable Fuel Standard (RFS) proposed renewable volume obligations (RVOs) and percentage standards for 2023, 2024, and 2025, as well as a series of modifications to expand the RFS program. Specifically, EMA highlighted the challenges higher ethanol blend requirements could have on existing underground storage tank systems. EMA called for a reduction to the proposed corn ethanol volume mandate while acknowledging its support for a permanent E15 year-round fix provided Congress appropriates over $1 billion for small to medium sized companies to make UST system compatibility upgrades.

Meanwhile, EMA argued that EPA’s proposed biomass-based diesel and overall advanced biofuel volumes through 2025 are not consistent with the industry’s projected growth, or with the Administration’s own goals to reduce greenhouse gas emissions. EMA supported an increase in RVOs for biomass-based diesel and overall advanced biofuel volumes given that there is room for growth in that segment. Renewable diesel fuel is the game changer for the energy marketing industry because it has the same ASTM specifications as diesel fuel and can be used in existing USTs. Additionally, the EPA’s proposal limits separation of RINs assigned to biodiesel blended into diesel fuel at a content of 20 percent or less. EMA confirmed with the Office of Air and Radiation in writing that the 20 percent blend concentration limit does not apply to designated heating oil blended with biodiesel. Still, EMA requested the agency provide clarifying language in the final rule highlighting that fuel designated as heating oil is not subject to the 20 percent blend concentration limitation, including transportation diesel fuel redesignated as heating oil and subsequently blended with biodiesel.

EMA opposed the agency’s eRIN proposal which would allow automakers to generate eRINs based on the EVs they sell by establishing contracts with parties that produce electricity from qualifying biogas. EMA argued that the EPA lacks the authority to implement the proposed eRIN credit for renewable electricity because it is inconsistent with the statutory purpose of the RFS, which is to support the production of renewable fuels, not the production and sale of certain vehicle technologies that eRINS are designed to promote. Making automakers RIN generators is a clear attempt to siphon capital away from clean green biofuels to electric vehicles. Click here to read the comments.

Price Increases and Supply Shortages Predicted for Seven Midwest States Planning to Shed One-Pound RVP Waiver for E10

A new study from the American Fuel and Petrochemical Manufacturers Association (AFPM) predicts retail gasoline prices will likely increase by as much as 12 cents per gallon in the Midwest due to the decision by seven state governors to require the EPA to remove the one-pound RVP waiver for E10 blends in their states. The governors are making the request to expand the market for gasoline blended with higher concentrations of corn ethanol in the region. The seven states planning to eliminate the one-pound RVP waiver include Ohio, Illinois, Iowa, Minnesota, Nebraska, South Dakota and Wisconsin. The EPA does not have the authority to deny the governor’s request but can only delay it for two years.

Without the one-pound waiver, E10 would no longer meet federal RVP limits for evaporative emissions. As a result, refiners would be forced to create a new lower volatility blendstock for E10 to meet federal RVP limits. The adoption of a new boutique blendstock would eliminate gasoline fungibility in the seven-state region and crimp supply resulting in higher prices at the pump, according to the study. The lower volatility blendstock would also allow E15 to meet year-round evaporative emission limits for the first time. This means E15 could be sold year-round in the region alongside E10.

Refiners say creating a new boutique blendstock would cost between $500 and $800 million in the first year alone. Moreover, the AFPM study predicts gasoline supply to the region would decrease by 125,000 barrels per day or 5 percent of demand in the region. The loss of production would be the same as if a large refinery were to shut down for the summer. It remains uncertain how many refineries in the region plan to invest in upgrades required for production of the lower volatility blendstock. Some refineries may simply switch to producing supply for states outside the seven-state region.

The EPA is currently drafting a proposed rule for public comment to grant the governor’s request. The rule will not be finalized before the start of the upcoming summer driving season.

Multi-State Hours of Service Waiver Extended for Gasoline, Diesel and Jet Fuel

The Federal Motor Carrier Safety Administration (FMCSA) extended the multistate Hours of Service waiver for gasoline, diesel and jet fuel through March 17, 2023, for the following states due to an unanticipated shutdown of the Suncor refinery in Colorado: Colorado, Kansas, Nebraska, New Mexico, Oklahoma, Texas, Utah, and Wyoming.

The emergency declaration applies to all states and jurisdictions listed above. This waiver covers all fuel deliveries in the states and jurisdictions listed because they support the "emergency," which in this case, is maintaining adequate fuel distribution in those areas.

Important: The FMCSA waiver covers interstate shipment of fuel in and out of the states and jurisdictions listed in the waiver letter. The FMCSA waiver does not cover intrastate only shipments (deliveries that stay within the boundaries of a single state). State governors must issue waivers for intrastate shipments within their boundaries. State Governors typically issue such waivers as part of their Emergency Declaration, or when FMCSA waivers are put into effect. Some of these states have already issued intrastate HOS waivers. Click here to read the notice and here for questions regarding the waiver.

The Energy Marketers of America will continue to work closely with the FMCSA, DOE, DHS/FEMA and other federal agencies to ensure emergency preparedness and response waivers and solutions to problems that arise in response to the Suncor refinery outage.

Weekend Reads

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We all know consumer prices are rising due to inflation. This — combined with supply chain challenges, extreme weather events, and other factors — is rapidly driving up the cost to replace and repair property and equipment. To read about these side effects and how to prepare for these changes, please click here.

Please always feel free to contact your Federated regional representative or EMA’s National Account Executive Jon Medo at 800.533.0472 for any additional information or risk management questions. Federated is a Partner in EMA’s Board of Directors Council.

This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2023 Federated Mutual Insurance Company.

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