RESULTS FROM NCWM ANNUAL CONFERENCE
Victory for Petroleum Marketers
This week, the National Conference on Weights and Measures
(NCWM) held its annual meeting in Detroit, Michigan. Items
on the agenda important to petroleum marketers were a 10
micron diesel filter mandate and a proposal to create an
official diesel gallon equivalent (DGE) method of sale for
CNG and LNG.
In a significant victory for PMAA, the NCWM voted down a
proposal to mandate a 10 micron diesel filter. If the item
were to have been approved, it would have cost marketers
approximately $230 extra a month due to having to change
diesel filters more often. This estimate didn't take into
account for loss of sales due to changing filters more
Currently, the market uses a 30 micron filter for diesel
fuel and a 10 micron filter for gasoline. PMAA commissioned
a study by Research Laboratories, Inc. to compare the
different micron diesel filters. The study concluded that a
30 micron diesel filter is just as effective as a 10 micron
in filtering particulates. Forcing a 10 micron diesel filter
on petroleum marketers would also have impacted the
functionality of the automatic shut-off nozzle because it
requires a certain amount of flow in order to shut off when
a vehicle’s tank is full. If a dispenser is running slowly,
the tank may overflow creating a cleanup issue. Bottom line:
mandating a 10 micron diesel filter was unnecessary.
PMAA would like to thank PMAA Chairman Sam Bell, Kansas
marketer Scott Zaremba, and Brian Parnell with Mapco Express
for representing petroleum marketers at NCWM. They were
instrumental in making sure the micron filter proposal did
not move forward. Also, PMAA would like to thank Minnesota
marketer Vern Kelley who helped with the micron filter
Additionally, the NCWM voted down the proposal to create an
official diesel gallon equivalent (DGE) method of sale for
CNG and LNG. What does this mean? CNG will continue to be
sold in gasoline gallon equivalents. Regarding LNG, since
there are no standards in place, it may be sold in diesel
gallon equivalents. However, given the LNG-DGE is not in the
NCWM handbook, this method of sale still lacks a uniform
standard across states. The DGE unit is necessary to help
facilitate the introduction of natural gas for trucking
companies and other operators of heavy-duty vehicles to
better understand the value proposition provided by natural
gas. In addition, it would have allowed the taxation of CNG
and LNG on a per-gallon basis instead of a mass basis.
However, this issue remains unresolved and debate on the
possibility of a mass standard within the NCWM will
continue, something that marketers and the natural gas
industry oppose. Allowing the method of sale to be
determined by DGE will allow trucking companies to make
easier cost comparisons.
TEMPORARY HIGHWAY BILL DEAL ON THE HORIZON
In a rush to complete a short-term
deal before federal officials start delaying payments on
August 1 to states for road and bridge construction
projects, the House passed a bill (H.R. 5021) this week
that would fund the highway program through May 2015.
Now the Senate will bring up the House bill and two
alternative funding bills. The final outcome is likely to be
passage of the House funding bill with a refocus again on a
long term highway funding solution. Although the House
passed the bill 367-55, it is opposed by some Democrats who
want to hold off on a short term bill in order to keep the
pressure on to pass a longer term bill.
to the House bill, the Senate will debate two other funding
patches. One that was approved by the Senate Finance
Committee and a proposal authored by Sen. Barbara Boxer
(D-CA). The House bill is similar to the Senate Finance bill
with both providing roughly $10.8 billion for the Highway
Both plans use pension smoothing and an
extension of customs user fees as offsets, but the Senate
Finance Committee bill also includes $4.3 billion in tax
compliance provisions that will not pass the House. Although
President Obama would also like a long-term fix, he has
approved the short term House bill.
to petroleum marketers, the House and Senate Finance
Committee plans both contain language fought by PMAA that
would transfer one billion dollars transfer from the Leaking
Underground Storage Tank (LUST) Trust Fund, leaving only
PMAA, NACS and SIGMA sent a
letter in June to Senate Finance Committee Chairman Ron
Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) urging
the Senate to reject a proposal for a second, fatal raid of
the Leaking Underground Storage Tank (LUST) Fund. In 2012
Congress hijacked $2.4 billion of the $3.8 billion that
PMAA, NACS and SIGMA members paid in fees to the LUST Fund.
The $2.4 billion was moved to fund the Highway Trust Fund.
Petroleum marketers have supported the LUST Fund and
have paid $3.8 billion in LUST taxes since its inception. In
2012, Congress included a provision in the Highway bill that
raided the LUST Trust Fund of $2.4 billion dollars and moved
it to the Highway Trust Fund. While PMAA opposed this
provision, Congress could have lessened the blow by
including language which would have required that future
revenue collected for the LUST Fund is used for its intended
purpose. Now Congress is back to raid from the petroleum
marketers fund, this time proposing to take one billion
dollars of the remaining $1.4 billion from the fund.
PMAA believes the LUST Fund should be solely used to
support UST leak prevention and remediation programs. PMAA
is also concerned that states might increase tank fees to
account for the LUST Fund shortfall. Raiding another one
billion dollars from the fund will cripple important
programs and ultimately harm marketing companies who have
paid the tax and built the fund over the past 25 years. If
the fund isn’t being used for its intended purpose, the fee
should be eliminated.
HOUSE PASSES PERMANENT BONUS DEPRECIATION BILL; WHITE HOUSE WOULD VETO
On July 11,
2014, the House passed, by a bipartisan vote of 258-160,
H.R. 4718, a bill that would restore and make bonus
depreciation permanent. Bonus depreciation allows businesses
to immediately write off more than half the cost of some
investments such as new equipment.
has threatened to veto a permanent bonus depreciation
provision but may agree with the tactic the Senate will
probably take – to extend for two years the previous bonus
depreciation allowance that expired on December 31.
PMAA strongly supports H.R. 4718 because it makes the
depreciation permanent and expands it to stores that are
leased as well as those that are owned.
PMAA PARTNER SPOTLIGHT FEATURING: MERIDIAN ASSOCIATES, INC.
The Seven Daily Practices of Super Successful Petro
CEOs by Betsi Bixby
What exactly do super
successful marketers do differently? Before I answer that
question, let’s get clarity on what’s super success versus
common, typical everyday success.
In the gallon-driven
petroleum world, kudos most often go to the CEOs snagging
the largest volume gains. Every refiner convention, you see
the list. But those volume gains don't always translate to
biggest profit gains and certainly don’t guarantee the
Knowing what happens behind the
volume gains from seeing countless financial statements, I
prefer to define super success this way:
Super Success = Achieving Desired Profit and Desired
Lifestyle with Joy.
Please read Betsi’s article in
here. To learn more about PMAA’s Platinum Partner,
Meridian Associates, please
or contact them at 800.728.9008.
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