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TSA DELAYS
COMPLIANCE DEADLINE FOR DRIVER TWIC
IDENTIFICATION ENROLLMENT
The Transportation Security Administration (TSA)
announced an extension of the final
compliance date by which drivers must obtain
a Transportation Worker Identification
Credential (TWIC) in order to enter certain
port facilities located around the country.
The TWIC deadline was originally set for
September 25, 2008, but has now been pushed
back to April 15, 2009. The seven-month
extension is required due to a backlog of
applications and driver background checks
that are waiting to be processed.
TWIC was established in the Maritime
Transportation Security Act and the SAFE
Port Act to serve as an identification
program for all drivers requiring unescorted
access to secure areas within a port. The
program is on track to complete enrollment
for a number of jurisdictions by the end of
2008, and several ports will be required to
comply with TWIC regulations this year.
Owners and operators of facilities located
within Captain of the Port Zones Boston,
Northern New England, and Southeastern New
England will need to comply by October 15,
2008. Additional compliance dates for select
ports will be announced in the coming weeks,
and the Coast Guard will provide at least 90
days notice prior to enforcement.
Since October 2007, approximately 250,000
personnel have enrolled in the TWIC program
at more than 100 fixed enrollment centers
and dozens of mobile sites nationwide.
Enrollment is currently underway for the
ports of Galveston and Freeport, Texas. The
TSA is urging drivers to pre-enroll online
where they can provide essential
biographical information and schedule an
in-person interview. Pre-enrollment
eliminates delays at enrollment centers and
reduces total enrollment time for each
driver. Although the compliance date has
been extended seven months, workers are
encouraged to enroll as soon as possible.
Additional information can be found on the
U.S. Coast Guard’s Homeport site, http://homeport.uscg.mil,
and on the Transportation Security
Administration’s web site at
www.tsa.gov/twic.
2008 UCR
REGISTRATION LETTERS SENT TO ALL ACTIVE DOT
NUMBER HOLDERS
The U.S. Federal
Motor Carrier Safety Administration (FMCSA)
announced last week that 2008 registration
letters for the new federal Unified Carrier
Registration (UCR) program should be
reaching petroleum marketers any day now.
Congress created the UCR in 2005 as part of
the five-year federal hazardous material
reauthorization bill. The new UCR program
replaces the former Single State
Registration System that applied only to
for-hire interstate motor carriers. The UCR
registration letter is being sent to all
current U.S. DOT number holders who operate
in interstate commerce. Petroleum
marketers with commercial vehicles that
travel across state lines and either weighs
over 10,000 lbs GVW or is required to have a
U.S. DOT HAZMAT placard, must register with
the UCR by June 1, 2008 and pay a fee based
on the number of trucks the fleet.
UCR registration may
be done online at
http://www.ucr.in.gov/. The following
UCR fee schedule applies:
Fleet Size
Fee Per Company
0-2
$39.00
3-5
$116.00
21-100
$806.00
101-1000
$3,840.00
In addition, each
state has the authority to further expand
the UCR registration program to
intrastate transporters including
for-hire and private petroleum transporters
who never cross a state line. Intrastate
transporters who must register will receive
UCR letters from their state DOT office. The
FMCSA is giving a grace period until June 1,
2008 to those interstate transporters who
did not register and pay a fee during the
abbreviated 2007 registration year. No
credential is issued under UCR. Instead,
enforcement authorities will look through
the federal UCR database to check for
compliance.
Marketers who did not
receive the 2007 and or 2008 UCR
registration forms in the mail should
download the registration packet from
http://www.ucr.in.gov/. (NOTE: This is
an Indiana State government website
contracted to operate the federal UCR
registration program). To ensure that the
registration material is sent to the correct
business address, interstate petroleum
marketers should check and/or update their
motor carrier information in the FMCSA
database at
www.safer.fmcsa.dot.gov. Petroleum
marketers should refer to their registration
letters for additional information.
DOT PROPOSES
INCREASE IN ANNUAL HAZARDOUS MATERIAL
REGISTRATION
The Department of Transportation’s Pipeline
and Hazardous Material Safety Administration
(PHMSA) has proposed to raise annual HAZMAT
registration fees. Small business petroleum
marketers with transportation operations are
currently required to register and pay a
$275 fee each year in return for a
certificate of registration, a copy of which
must be kept in the cab of all vehicles that
transport petroleum products. HAZMAT fees
are based on business size. Current HAZMAT
fees are set at $275 for small businesses
and $1,000 for large businesses. PHMSA is
proposing to increase the fee that a large
business must pay from $1,000 to $3,000 for
registration year 2009-2010 and beyond. The
fee for small businesses and not-for-profit
organizations will remain at $275. Most
petroleum marketers qualify for the small
business annual fee.
Under the HAZMAT regulations, registrants
are allowed to designate the size of their
business according to U.S. Small Business
Association size categories for purposes of
paying the fee. The fee increase is
necessary because Congress increased the
amount that PHMSA may collect each year in
HAZMAT fees from $14 million to $28 million.
The fees are used to fund the Hazardous
Materials Emergency Preparedness Grants
Program that provides money to emergency
responders nationwide to develop, improve,
and implement emergency plans, train public
sector HAZMAT emergency response employees,
determine flow patterns of hazmat and
determine the need for regional response
teams. PMAA will file comments opposing any
hike in fees for by petroleum marketers. The
proposed rule may be viewed at
http://edocket.access.gpo.gov/2008/pdf/E8-9815.pdf.
FACTORS BEHIND HIGH
DISTILLATE PRICES MORE COMPLEX THAN GASOLINE
With gasoline and diesel fuel
prices continuing to rise at the retail
pump, many consumers may be feeling they are
taking a bath on fuel expenses. This feeling
may be well-placed as a bathtub provides a
good analogy for the supply-demand balance
that affects petroleum product prices.
Imagine a partially-filled bathtub. Now
imagine turning on the faucet, which
represents your supply. The drain represents
consumption. If the faucet (supply) is
adding more water than the drain removes,
the water in the tub (inventory) will rise,
and vice versa. Changes in stock levels
reflect the balance between supply and
consumption in any given time period.
Consumption is met by refinery production,
imports, and stock drawdowns. If consumption
is greater than supply, inventories will be
drawn down to fill the gap.
Gasoline inventories built to unusually high
levels in early 2008, indicate an excess of
supply relative to consumption. In the U.S.,
this excess supply is partially the result
of gasoline use declining 0.8 percent in the
early months of 2008 (January through the
middle of March) over the same time in 2007.
While this surplus dampened the price of
wholesale gasoline relative to crude oil,
resulting in relatively low gasoline margins
so far this year, crude prices have risen to
record levels driven by tight global oil
markets. The surge in crude oil prices has
resulted in consumers paying record high
gasoline prices.
In recent weeks, gasoline inventories have
fallen sharply even though imports have
remained relatively steady while demand has
increased seasonally. This is mostly due to
inventories being used as refiners undergo
maintenance and reduce their capacity
utilization in the face of low gasoline
margins. A contributing factor has been the
transition from winter to summer grade
gasoline, encouraged by significant price
discounts to move winter gasoline out of
primary storage to make room for summer
grade fuel. This is the typical seasonal
pattern, but the drawdown occurred several
weeks later than usual this year. While
gasoline inventories are currently still in
the upper half of the five-year average
range for this time of year, refinery
margins have increased from very low levels
in recent weeks. Even if the gasoline
balance as reflected in inventory levels
remains in the normal range this summer,
high retail prices will continue to be
driven largely by tight and expensive crude
oil supplies.
Unlike gasoline, distillate has maintained a
high price margin relative to crude oil so
far this year. While distillate stocks are
now near the bottom of the five-year average
range, they were near the top of the average
range at the beginning of February. So why
have distillate wholesale prices been so
high relative to crude oil for most of the
winter? The answer lies in world distillate
markets which have been unusually tight this
year, placing extra pressure on U.S. diesel
and heating oil prices over and above the
high price of crude oil. High exports of
distillate in January and February to help
meet unusual needs in Latin American and
Europe contributed to the drawdown. Yet the
weekly distillate stock draws from the
beginning of January through the second week
in March (nearing the end of the heating
season) were actually smaller this year than
those in four out of the five previous
years. Inventories continued to fall in
ensuing weeks, reflecting the continued
drain of inventories resulting from
persistent winter weather in the Northeast
combined with a relatively low inflow of
distillate product from domestic refiners.
While weaker U.S. demand growth for
distillates may slow the drain on domestic
stock levels, strong world demand is
expected to maintain tight distillate
supply-demand balances, thereby limiting
U.S. imports and potentially encouraging
more exports. This could slow re-stocking
ahead of the 2008-2009 winter season, as
well. Hence, distillate prices may remain
high due to both high crude oil prices and
high wholesale prices relative to crude oil.
FROM THE ENERGY
INFORMATION ADMINISTRATION
U.S. Average Gasoline Prices - For
the fifth consecutive week, the U.S. average
retail price for regular gasoline moved
higher, reaching yet another all-time high
price of 360.3 cents per gallon. The average
price has spiked 21.4 cents since April 14.
On a regional basis, while prices increased
throughout the country, they did so at a
somewhat slower pace than was the case
during the previous week. The largest
increase occurred on the East Coast where
the average price jumped by 11.7 cents to
360.1 cents per gallon. This was the only
region of the country to experience an
increase greater than ten cents. The price
in the Midwest increased 9.8 cents to 356.8
cents per gallon up by 64.3 cents from a
year earlier. The average price in the Gulf
Coast was up 9.4 cents to 350.5 cents per
gallon. The average price in the Rocky
Mountains, the lowest of any region, rose to
347.8 cents per gallon up 6.2 cents from the
previous week. Once again, the West Coast
average price increased the least of any
region moving up by 5.2 cents to 378.6 cents
per gallon. Nonetheless, despite the
relatively small increase, the average price
was the highest of any region. The average
price in California increased by 4.6 cents
to hit 389.2 cents per gallon.
U.S. Average Diesel Fuel Prices - For
the third week in a row, the U.S. average
diesel price reached a new record high
increasing 3.4 cents to 417.7 cents per
gallon, 136.6 cents above a year ago.
Although prices moved higher in all major
regions, the pace of the increase slowed
rising by 3.4 cents. East Coast prices
increased 2.3 cents to 423.0 cents per
gallon tallying the smallest increase for
any of the five principal regions but still
143 cents above last year. (Prices were
unchanged in New England, increased by 0.6
cent in the Central Atlantic and grew by 3.1
cents in the Lower Atlantic.) In the
Midwest, the price moved up 3.5 cents to
413.3 cents per gallon. The price in the
Gulf Coast increased 3.6 cents to 411.3
cents per gallon remaining the lowest of any
region. The price in the Rocky Mountains
moved up by 3 cents to 414.1 cents per
gallon, 115.3 cents higher than a year
earlier. On the West Coast, the average
price went up the most of any region
increasing by 5.7 cents to 431.2 cents per
gallon, 136 cents higher than last year. In
California, the average price increased by
7.3 cents to 439.0 cents per gallon. |
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