Sponsored by:
NRC Realty & Capital Advisors
who generously supports
PMAA's work in our Nation's Capital.

PMAA's weekly update on important national industry issues.

PMAA's Weekly Review - July 24, 2015  [WR-15-29]

In This Issue:
























A new choice for petroleum marketers.  The Spirit brand is offered by the Petroleum Marketers Oil Company, LLC (PMOCO).



Visit us at:



Petroleum Marketers Association of America


1901 North Fort Myer Drive

Suite 500

Arlington, Virginia 22209


This week, the National Conference on Weights and Measures (NCWM) held its annual meeting in Philadelphia, Pennsylvania. Items on the agenda important to petroleum marketers included a 10 micron diesel filter mandate and a repeal of 85 octane. Currently, the market uses a 30 micron filter for diesel fuel. Another proposal would create an official diesel gallon equivalent (DGE) method of sale for CNG and LNG.

Once again, PMAA defeated the 10 micron filter mandate. If the item were to have been approved, it would have cost marketers approximately $230 additional per 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 often. PMAA argued that diesel fuel can be contaminated from many parts of the supply chain starting with the refinery, through a pipeline, in terminal storage tanks, in barges and ships in a retail storage tank. Solving this problem requires a comprehensive examination of the entire supply chain and it was unfortunate that much of the blame has fallen on petroleum marketers -- the final step in the supply chain -- without recognizing that upstream measures beyond retailers' control contribute to diesel cleanliness issues. PMAA argued that this should be a total industry effort and should not just fall on the petroleum marketer. PMAA would support the 10 micron filter mandate so long as our upstream partners filtered (at the terminal, refining, for example) and ensured that the fuel marketers receive it clean and free of particulate. Essentially, the product needs to be treated or refined in a manner that it will not re-particulate. PMAA also provided NCWM officials studies that show 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.

PMAA also opposed an item to repeal 85 octane. Several states allow the use of 85 octane and repealing it would ultimately harm petroleum marketers and consumers by restricting supply which would lead to higher prices at the pump. There has been limited evidence presented regarding harm to engines or complaints from consumers regarding engine damage—or any other problems—due to 85 octane gasoline. Furthermore, there is simply not enough information to determine whether the overall environmental impact of an 87 octane standard will be positive or negative.

Finally, 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, since the LNG-DGE is not in the NCWM handbook, this method of sale 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.

PMAA would like to thank Bruce Garrett (Massachusetts marketer and UST Task Force member), Davis Cosey (Georgia marketer and UST Task Force member, Sam Bell (former PMAA Chairman), Brian Parnell (Mapco Express and TFCA member), Kat Madaras (Fuel Merchants Association of New Jersey), Tom Palace (Kansas Association Executive) and Dawna Leitzke (South Dakota Association Executive) for attending the NCWM meeting. They were instrumental in defeating the 10 micron filter proposal.    


Senators are struggling to bring a six year transportation funding bill for a vote over the weekend or next week, while House members prefer their five month extension of the funding that will otherwise expire July 31.

Just getting the long term bill to a vote in the Senate will likely require debate on numerous controversial amendments such as defunding Planned Parenthood, with reauthorization of the Export-Import Bank as the one "must have" inclusion. Both Republican and Democratic House leaders say they don’t care for the Senate bill, that it is a rushed compromise that doesn’t achieve long-term funding certainty or appease either party.

Furthermore, since the House plans to leave for the August recess at the end of next week, spending another week working through an amendment list will prove problematic for negotiators. Meanwhile, the Senate highway bill contains language notable to marketers that studies the efficacy of the Federal Motor Carrier Safety Administration’s (FMCSA) system of analyzing safety based violations from inspections and crash data to determinate a commercial motor carrier's on-road performance, known as the Safety Measurement System (SMS). Click for more specifics on the proposal in the Senate bill.

President Obama has indicated that he would sign the House bill version. PMAA anticipates that the most likely outcome is a Highway Trust Fund (HTF) extension through December 19, 2015.

Biodiesel Tax Credit Moved from Blenders to Producers

On Tuesday, the Senate Finance Committee approved 23 to 3 a bill that would extend fifty-two tax provisions that expired on December 31, 2014.

Included in the package are two year extensions of the 30 percent investment tax credit for alternative fuel pumps, an extension of the 50 percent bonus depreciation to qualified property purchased and placed in service before January 1, 2017 and Section 179 expensing. The bill would also amend the Section 179 expensing limits so that, for the first time, the maximum deduction and phase will be indexed for inflation.

In addition, the bill extends through 2016 the $0.50 per gallon alternative fuel tax credit and alternative fuel mixture tax credit. This credit can be claimed as a nonrefundable excise tax credit or a refundable income tax credit for the blending and sale of alternative fuel mixtures including compressed or liquefied natural gas, ethanol, biofuels, and liquefied hydrogen.

The bill would cost $96 billion over 10 years. House Ways and Means Committee Chairman Paul Ryan (R-WI) plans to consider tax extenders after the August recess.

PMAA strongly supports these extensions and has worked with Congress on the renewals.

Finally, the package also included language important to PMAA, a two year renewal of the biodiesel blenders tax credit that expired December 31, 2014. However, Monday night we learned of an amendment sponsored by Senators Grassley (R-Iowa), Cantwell (D-WA), Thune (R-SD) that would move the credit from the blender to the producer. The amendment was passed by the Committee on Tuesday. PMAA is opposed to the amendment because the credit will not likely be passed on to the marketer if it is taken at the production level. Furthermore, the language would disconnect the credit from biodiesel consumption, and simply be a subsidy for domestic production which is contrary to the original intent of the biodiesel tax credit which was to promote the use of biodiesel in the marketplace. PMAA is working closely with NATSO, NACS and SIGMA to maintain the biodiesel credit at the blender level and will be meeting with House and Senate leadership as well as the tax writing committees next week.


On Thursday, the House Science Subcommittee on Energy and the Subcommittee on Oversight held a hearing on the RFS. Witnesses discussed the vast changes in technical and market conditions in today’s energy sector compared to when the RFS was established in legislation enacted in 2005 and 2007. Members of the committee also outlined some of the costs and environmental impacts of the RFS mandate.

Witnesses before the subcommittee were: Matthew Smorch, Vice President for Strategy and Supply, CountryMark (Refinery); Dr. Jason Hill, Associate Professor of Bioproducts and Biosystems Engineering, University of Minnesota; Chuck Red, Vice President of Fuels Development for Applied Research Associates, Inc.; and Tim Reid, Director of Engine Design, Mercury Marine.

Subcommittee Chairman Randy Weber (R-Texas) stated that “The RFS shows that the federal government cannot use mandates to create a functional industry out of thin air. Production of renewable fuels has increased, but demand for fuels with higher blends of ethanol simply does not exist, even in the most favorable market conditions. While the federal government has an important role in energy research and development, including in developing efficient transportation fuel technologies, federal mandates are the wrong approach to fueling innovation.” Furthermore, “The RFS was wrong about gas consumption –demand for gasoline is falling. The RFS was wrong about the growth of the renewable fuel industry, particularly in terms of advanced biofuels and cellulosic fuels. And the RFS was wrong about the impact incorporating renewable fuels would have on the environment.”

PMAA currently supports EPA’s regulatory adjustment to the RFS by lowering the corn-based ethanol mandate to a level achievable with E10 and reasonable growth for E85 for years 2014 and 2015. However, PMAA has concerns with the 2016 proposed RFS blending volume mandate and supports a reasonable number that’s less than 14 billion gallons in order to prevent breaching the ethanol blend wall and the resulting chaos in the retail motor fuels market. EPA’s acknowledgement that there are constraints in the motor fuels market to accommodate increasing volumes of ethanol including concerns related to retail infrastructure compatibility is justification to lower the ethanol mandate. Finally, PMAA has no concerns regarding the biodiesel proposed volumes for 2014 – 2017.


This week a bipartisan group of 36 senators urged EPA to raise the biodiesel Renewable Fuel Standard (RFS) to at least a higher level than the industry actually produced in 2013 – 1.8 billion gallons. 1.8 billion is EPA’s proposed volume requirement for 2016.

The effort was led by Senators Chuck Grassley (R-Iowa), Patty Murray (D-Wash.), Roy Blunt (R-Mo.) and Heidi Heitkamp (D-N.D.). “While the proposal is a positive step for biodiesel, we remain concerned that the proposed biodiesel volumes for 2016 and 2017 fail to adequately recognize the domestic biodiesel industry’s production capacity and its ability to increase production,” the senators wrote to EPA Administrator Gina McCarthy. “Biodiesel is the first EPA-designated advanced biofuel under the RFS to reach commercial scale production nationwide. It is exceeding the goals that Congress envisioned when it created the RFS with bipartisan support in 2005, while creating jobs, generating tax revenues, reducing pollution, and improving energy security. We urge you to support continued growth in the domestic biodiesel industry by making reasonable and sustainable increases in the biodiesel volumes for 2016 and 2017 in the final rule."


On Wednesday, the House Energy Committee’s Subcommittee on Energy and Power unanimously approved draft legislation consisting of four titles – modernizing energy infrastructure, 21st century workforce, energy security and diplomacy, and energy efficiency and accountability. No amendments were offered in the markup, but members expressed items they would like to see included in the bill (such as lifting the 40-year-old crude oil export ban) as it moves forward.

Energy and Commerce Committee Chairman Fred Upton (R-MI) noted, “I am proud to say that this is the first attempt to put together a broad bipartisan energy package in nearly a decade. While a lot of work remains to be done, I am pleased that today’s draft starts on the right foot with broad bipartisan support. While it does not encompass the entire universe of issues on the table, Members and staff will continue discussions over the next several weeks in order to advance a broader package when we return in September."

Included in the bill is language that would streamline natural gas pipelines but not petroleum pipelines. PMAA opposes the House energy bill language because PMAA believes natural gas pipeline expansion and petroleum pipeline expansion should be treated fairly. Fortunately, the House language does not automatically approve the natural gas pipeline application if the 90 day deadline following appropriate environmental review is not met.

Not to be outdone, Senators Lisa Murkowski (R-AK) and Marie Cantwell (D-WA) introduced the "Energy Policy Modernization Act" on Thursday which will be marked up over two days next week.

PMAA will thoroughly review and report on the new House and Senate bills in next week’s Weekly Review. 



The U.S. EPA published the final UST system testing and inspection rule on July 15, 2015. The PMAA 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. The PMAA UST Task force was successful in this effort reducing annual costs of the final rule from $6,966 per site to $2,377 per site. Overall, total annual compliance costs on the industry as a whole were reduced from $1.5 billion to $530 million as a result of PMAA’s efforts.

PMAA was successful in achieving three of its primary goals aimed at reducing compliance costs imposed by the rule. First, PMAA convinced the EPA to drop regularly scheduled testing of the interstitial spaces of UST secondary containment equipment. PMAA’s second goal of delaying implementation of testing and inspection requirements was also successful. PMAA was able to delay these 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. PMAA achieved many additional cost reductions as well. PMAA’s effort on behalf of tank owners was unparalleled in the industry.

While PMAA is pleased with the gains made, more work must be accomplished to further reduce compliance costs and burdens imposed by the final rule. First, the PMAA UST Task Force will present to the EPA a list of questions seeking clarification on a number of provisions in the final rule. The Task Force believes these clarifications will result in added annual cost savings for tank owners. Second, the PMAA UST Task force will meet with the EPA to discuss ways to further reduce costs associated with sump testing scheduled for once every three years under the final rule. PMAA believes the current test method for sumps is seriously flawed and unnecessarily expensive. Due to these ongoing efforts definitive compliance guidance is not available at this time. However, given the three year implementation schedule for most provisions under the rule there is plenty of time to get clarifications and changes needed for a compliance guideline.


Adoption of Existing EPA Operator Training, Secondary Containment and Delivery Prohibition Guidelines into Regulations – The Energy Policy Act of 2005 required states receiving LUST money from the EPA to meet certain guidelines. The EPA established those guidelines which include; UST inspections as well as operator training, secondary containment, and delivery prohibition requirements. These guidelines were adopted by states and have been requirements for marketers to follow for a number of years now. The final UST rule simply adopts the EPA guidelines as regulatory requirements. There is a procedural change that will not affect tank owners who already must comply with these requirements on the state level.

Walk Through Inspections – The final rule requires tank owners to conduct UST system walk though inspections on the following equipment: spill buckets, fill caps and check release detection equipment operability. Once per year, tank owners must check sump areas for damage, release or leaks.

Spill Prevention Equipment Tests - The final rule requires spill prevention equipment testing once every three years. The final rule does not require periodic testing of double walled spill containment equipment if the integrity of both walls is periodically monitored.

Overfill Prevention Equipment Inspections – The final rule requires testing and operation inspection of overfill protection equipment once every three years. Tank owners must inspect automatic shut-off devices, flow restrictors and alarms. The test requires a demonstration that the equipment will operate or activate properly.

Secondary Containment Testing – The final requires testing once every three years of all sumps that are used for secondary containment and interstitial monitoring of double walled pipes and/or other equipment including under dispenser containment. The test must show that the sump is water or vacuum pressure tight. Double walled sumps used for interstitial monitoring of piping are not required to be tested if both walls of the containment sump are periodically monitored.

Release Detection Equipment Tests – The final rule requires annual operational and maintenance tests on electronic and mechanical components of release detection equipment to ensure proper operation. Owners must: check ATG systems and other controllers, test alarm, verify system configuration, test battery back-up, inspect probes and sensors, automatic line leak detectors, vacuum pumps and pressure gages, as well as hand held electronic sampling equipment.

E-15 Compatibility Requirements – The final rule adopts previously adopted EPA guidelines that require tank owners to demonstrate UST system compatibility with ethanol gasoline blends greater than E-10 or diesel fuel blends greater than B-20 by; certification and listing of equipment by a nationally recognized testing laboratory; equipment manufacturer approval; or an alternative method developed by a state UST authority. Tank owners who plan to place fuel blends greater than E-10 or B-20 in a UST system must first provide 30-day prior notice to state UST program authorities. This is purely a “housekeeping” measure by the EPA and does not change the E-15 compatibility requirements which PMAA believes is inadequate to protect tank owners from liability in the event of a release.

Under Dispenser Containment – The final rule requires the installation of double walled under dispenser containment any time the dispenser and all the equipment used to connect it to the vertical riser pipe from the UST system is replaced.

Statistical Inventory Reconciliation – The final rule adds statistical inventory reconciliation as an approved method of leak detection. The final rule also provides performance standards that SIR methods must meet.

Vent Line Flow Restrictors – The final rule requires ball float valves to be tested periodically for operability. The final bans the installation of new ball float valves. Existing ball float valves may continue in service until replaced.

Internal Tank Linings – The final rule requires tank owners to permanently close USTs that use internal tank liners as the sole method of corrosion protection when an inspection determines the lining no longer is performing to original design specifications and cannot be repaired. Lining must be inspected within ten years after lining and every five years thereafter.

Change of Ownership Notification – The final rule requires tank owners to provide notice to state regulatory authorities anytime ownership of a tank system is changed. The final rule provides a new notification form entitled: Notification of Ownership Change for Underground Storage Tanks.


There are a number of compliance dates that are required under the rule.

October 13, 2015 - Provisions including, notification of tank ownership, elimination of new installation of float ball valves, under dispenser containment requirement upon installation of new dispenser and all of its underground components, statistical inventory release are effective October 13, 2015 under the federal rules.

October 13, 2018 – Provisions including, the first 30 day walk-through inspection, spill equipment test, overfill equipment inspection, secondary containment test, and release detection equipment test must be completed no later than October 18, 2018. Once the first 30 day walk-through inspection is completed, subsequent inspections must occur every 30 days thereafter. Once the first sump inspection is performed by October 13, 2018, subsequent sump inspections must occur once every year thereafter. Once the first release detection test is completed by October 13, 2018, subsequent testing must occur once every year thereafter.

Compliance in EPA Approved State UST Programs – Currently, 38 states have EPA approved UST programs. These states have their own UST program authority and regulations and must adopt the final rule in order to receive annual funding from the EPA. Some states adopt EPA regulations automatically by reference, some by rulemaking and others by legislative approval. The EPA gives these states three years to adopt the requirements under the final rule. Therefore, the October 13, 2015 compliance date may not apply in some of these states depending how long it takes to adopt the final rule into state regulations. These states will however be required to meet the October 13, 2018 implementation deadline or risk losing program authority from the EPA.

Compliance in States Without EPA Approved Programs - In the 12 states that currently do not have program approval, the EPA UST regulations apply directly. Those states include; Alaska, Arizona, California, Florida, Illinois, Kentucky, Michigan, New Jersey, New York, Ohio, Wisconsin and Wyoming. Therefore, the October 13, 2015 compliance date applies in these states as well as the October 13, 2018 deadline for reoccurring testing and inspections.


PMAA will provide compliance information for the October 13, 2015 compliance deadline within the next 30-days once clarification on certain provisions is obtained from the EPA. At this time, PEI RP-1200 is the only standard recognized by the EPA to implement the requirements of the rule. Petroleum marketers must follow this standard when conducting inspections and testing. PMAA will provide notification should any new standards be developed. State program authorities may also adopt methods to implement the rule that differ from PEI RP-1200. Marketers are encouraged to work with their state programs to come up with alternative methods that are less burdensome and costly but equally protective of the environment.


Federated’s Risk Management Academy provides a unique opportunity for businesses to learn best practices and network with industry peers through short risk management seminars. These seminars are designed for individuals in positions of risk leadership including owners, operations management, service management, risk management, or human resources. Sessions target specific risk management exposures for all industries as well as targeted exposures for individual industries. The key to a successful business is implementing and leading a strong risk management culture, so attendees should be in a position to take action!

Through PMAA's relationship with Federated Insurance, there is no charge to attend this training and you do not have to be a current Federated client. However, attendees are responsible for air and ground transportation and lodging to and from Owatonna, Minnesota. Several PMAA members have attended in the past and can give referrals on the course content.

The class is limited to 25 attendees and the registration cutoff date is August 14. For a short video about the seminar and other details, please visit.  To reserve your spot in the upcoming session or for answers to any questions you may have, contact Royetta Spurgeon at Federated 800.533.0472 extension 455-5604.


Every year, the NACS Show brings together convenience and fuel retailing industry professionals for four days of learning, buying and selling, networking and fun — all designed to help participants grow and run successful operations. For industry retailers who are serious about the success of their business, the NACS Show is an event not to miss. The NACS Show will be held from October 11-14 at the Las Vegas Convention Center.

This year’s NACS Show features 400,000 net square feet of exhibit space, which is sold out. Applications are being accepted for the booth waitlist. Expo hours will take place Monday, October 12, 11:30 am – 5:30 pm; Tuesday, October 13, 11:30 am – 5:30 pm; and Wednesday, October 14, 9:00 am – 1:30 pm. Attendees can also look forward to three days of general sessions and more than 55 educational sessions as well as training sessions tailored to meet your needs

The opening General Session will take place on Monday, October 12 from 10:00 am – 11:15 am at the Westgate Las Vegas Resort & Casino located directly next to the Las Vegas Convention Center. Speaker information will be announced at a later date.

The closing General Session will take place on Wednesday, October 14 from 8:00 am – 9:00 am at the Westgate Las Vegas Resort & Casino located directly next to the Las Vegas Convention Center. Speaker information will be announced at a later date.

In addition to online registration and housing, the NACS Show website  features the latest information about exhibitors, housing, speakers, educational sessions and networking events.

Please note that the NACS Show registration is separate from the PMAA Meeting Registration.

PMAA’s Fall Meeting will be held on October 10-11 at the Las Vegas Convention Center’s North Hall, Level 2. Please view information here. Registration will be opening soon!

Are Your Property Limits Accurate?

Imagine you get that middle-of-the-night call every business owner dreads: There’s smoke coming from the roof at your main location. When you arrive, the entire building is in flames. The fire gets put out shortly after dawn, but it’s evident the fire and water damage is extensive. That shiny new equipment is now scrap, the shelves, light fixtures, inventory, carpet, family photos—anything and everything—ruined.

Now imagine finding out that, while the walls and roof were insured at their full replacement value, not much else was. Not calculating replacement value for property contents is a costly mistake some business owners make when valuing their business insurance limits. Don’t be one of them

Please click here to read this article in its entirety. For additional information or to discuss this in further detail, please contact your Federated  regional representative or PMAA’s National Account Executive Jerry Leemkuil (jjleemkuil@fedins.com) at 800.533.0472.


Following are a few of the different categories where Staples Advantage can help you out.

Technology: Staples Advantage has access to hundreds of different manufacturers that we can work with to get you the most aggressive price on hardware, software, tablets, and accessories. We have even partnered with HP internally and can get free demos if the opportunity qualifies.

Furniture: Business Interiors by Staples is the nation’s largest contract furniture dealer. There are over 750 manufacturers that we have access to. What you see on your site is only a small sample of what we can find for your office. You can order a couple chairs or a desk to new layouts for a whole building.

Facilities: Cleaning and break room is often where we can save you the most when it comes to your everyday purchases. We do no cost dispensers for the bathroom, coffee, water, or around the office. This is also our fastest growing category with new SKUs being added daily. Most people don't think of Staples Advantage for granola bars and band aids, but we have them and much more.

Print Items: Print just added a feature where you can upload your artwork on the site and get your project picked up at the store within 24 hours. You just add it to your cart and pay for it then. You owe nothing when you go to the store and pick it up.

Staples Advantage is here to do anything we can to partner with your organization. You’re eligible to receive low, Staples Advantage pricing through your PMAA member services at no cost to you. Please visit our PMAA Member Services webpage   email or call your account manager Tim Jansen at 888.224.-3784 Extension 4508.


PMAA Home Page | Opt-Out