Congress Postpones Big Decisions in 2012

Nearly every executive in the petroleum and convenience industries had some worries about bad things happening on Capitol Hill in 2012, but when the dust settled, very little legislation of consequence was enacted.

One impressive victory for our industry was secured when the U.S. Senate resoundly rejected an amendment to allow states to commercialize rest stops on the interstate highways. For well over a decade, several state governments have wanted to commercialize rest stops to generate new revenue for state coffers. The problem is that federal law prohibits them from commercializing rest stops, and they sought to change the law. They finally got a Senate vote on their legislation and thankfully it was defeated 83-16.

Almost more important than the victory itself was the united grassroots lobbying efforts amassed by all the national and state trade associations representing travel plazas, convenience stores, gas stations, restaurants, hotels and others who operate stores at the interchanges. Hopefully this defeat will discourage future senators from pursuing similar legislation. I could write more about it, but it really is not necessary. Everyone who reads Convenience Store News fully understands how unfair this legislation would be to the retailers who have invested in businesses at the interchanges.

It now appears that Congress will not tackle any big decisions until after the November elections. Some lobbyists are expecting a very volatile lame duck session where lots of deals are cut on taxes and spending. Other lobbyists are predicting a “do nothing” lame duck with most big decisions pushed into 2013. Probably sooner than later, some big decisions will be made that will impact every petroleum and convenience retailer.

Here are some of the lobbying priorities for PMAA in 2012 and 2013.

Health Care Reform Employer Mandates. The controversial health care law is uniquely unfair to petroleum marketing and convenience store companies. In 2014, companies with more than 50 employees will have to pay hundreds of thousands of dollars in penalties if health insurance is not provided to all full-time (30 hours per week) employees. PMAA is supporting legislative efforts to repeal the health care law. The Supreme Court recently upheld the health care law, which taxes persons who do not buy insurance. PMAA will aggressively lobby the new Congress to repeal or revise the costly employer mandates.

E15. The Environmental Protection Agency (EPA) has removed most federal regulatory barriers standing in the way of bringing E15 to retail consumers. Still, multiple state and local barriers remain and PMAA has advised retailers to be highly cautious. Retailers wanting to sell E15 should obtain expert legal and regulatory advice before moving forward. Sens. John Hoeven (R-N.D.) and Roy Blunt (R-Mo.) have introduced the “Domestic Fuels Act of 2012,” which would provide an improved legal and regulatory pathway for marketers to sell E15 and other EPA-approved fuels. Representatives John Shimkus (R-Ill.) and Collin Peterson (D-Minn.) introduced companion House legislation.

Keystone XL Pipeline. PMAA members own and maintain more than $500 billion worth of liquid fuels infrastructure. When the Keystone XL Pipeline is operational, it will be a reliable source of crude oil for U.S. refineries to make gasoline and distillates. PMAA is supporting all efforts to get the Keystone Pipeline approved. House GOP leadership made an attempt to attach the Keystone provision to the House/Senate Highway Bill conference negotiations, but it was not part of the final conference agreement. A decision on the Keystone XL Pipeline is not likely until after the November elections.

PCI Compliance. The costly ongoing PCI mandates imposed on retailers are never-ending. PMAA is supporting efforts by the Association Coalition for Data Security (ACDS) to scrutinize and oppose unwarranted new PCI mandates. When retailers make investments in PCI compliance, extended shelf life of equipment and software needs to be built in.

Roll-Your-Own Tobacco. Congresswoman Diane Black (R-Tenn.) introduced legislation to close loopholes used by rollyour- own (RYO) shops, and language was also included in the Senate Highway Bill. The tax language in the final Highway Bill agreement classifies retailers who own RYO machines as “manufacturers.” It doesn’t increase taxes on pipe tobacco made with a commercial RYO machine, but it ensures all state and federal tobacco taxes are legally collected. PMAA supported the legislation because it is likely RYO shops will eventually be closed by federal agents, but in the interim they severely undermine convenience stores.

Stage II and Gasoline Retailers. EPA announced that “widespread use” of onboard refueling vapor recovery (ORVR) systems will be achieved nationally on June 30, 2013. PMAA had discussions with EPA about the need to determine when widespread use would be achieved and urged the agency to make that determination. Since then, PMAA sent a letter to EPA urging the agency to recognize widespread use of onboard canisters as a “comparable measure” for the Ozone Transport Region (OTR). Some state governments are moving forward to decommission Stage II. In August, EPA fulfilled PMAA’s request and issued long-awaited guidance that paves the way for removal of Stage II nozzles and equipment from gasoline dispensers nationwide and addresses OTR concerns.

The release of the guidance is important to petroleum marketers because state regulators have been reluctant to permit the removal of Stage II equipment until assurances were provided by EPA that they would not violate federal air quality standards by doing so.

Tier 3 Gasoline. EPA is making gradual progress toward proposing a new national standard for gasoline, commonly referred to as “Tier 3.” The new specifications will result in significantly higher gasoline prices with very little environmental benefit. PMAA is opposed to Tier 3 gasoline and will be participating with other industry and consumer groups opposed to the rule.

Dan Gilligan is president of the Petroleum Marketers Association of America. He has been in this role since 1998.