|Trump Administration Revokes Waiver Allowing California to Set Emissions Standards
This week, President Trump announced that the EPA is revoking California’s waiver that allows the state to set its own, more stringent auto emissions standards. Thirteen other states and the District of Columbia follow California’s standards as well. Additionally, the EPA, with the help of the U.S. Department of Transportation (U.S. DOT), is revoking California’s requirement that auto manufacturers offer for sale an increasing number of zero emission vehicles (ZEV) in the state each year. The U.S. DOT is also drafting a notice asserting that the California (ZEV) standards are preempted by federal fuel economy regulations. President Trump made the announcement saying, "The Trump Administration is revoking California's Federal Waiver on emissions in order to produce far less expensive cars for the consumer, while at the same time making the cars substantially SAFER. This will lead to more production because of this pricing and safety advantage, and due to the fact that older, highly polluting cars, will be replaced by new, extremely environmentally friendly cars."
The announcement comes just one month after Ford Motor Company, BMW AG, Volkswagen AG and Honda Motor Company, reached an agreement with the California Air Resources Board (CARB)on emissions standards. Under the terms of the agreement, automakers pledged to increase the average fuel economy of their fleets to around 50 miles per gallon by the end of the 2026. GM did not take a position on the agreement, and Fiat Chrysler indicated that it wasn’t invited to the discussion.
California Governor Gavin Newsome, along with many states that follow California’s standards and several environmental groups, announced they will challenge President Trump’s decision. However, the inevitable court battle between state and federal regulators is unlikely to be resolved until after next year’s presidential election. If a Democrat were to beat President Trump in the election, it would be easier for the new president to undo the decision if a court decision has not already been made.
Last August, the EPA and National Highway and Transportation Safety Administration (NHTSA) issued a proposed rule that would freeze federal mpg requirements and corresponding greenhouse gas standards at 2020 levels. The rule would also revoke the rights of individual states to adopt more stringent emissions standards. Currently, 11 states including CO, CT, ME, MD, MA, NJ, NY, OR, RI and VT adopted the California ZEV standards. These states would also lose their ZEV mandates should the EPA rule be finalized.
In October, PMAA submitted comments in support of the Trump Administration’s proposed rule. PMAA highlighted numerous reasons why current MPG standards could harm petroleum marketers and how important it is that the Trump Administration’s proposed rule is adopted.
House Passes Government Spending Bill, Senate to Follow Next Week
On Thursday, the House passed a government funding bill known as a continuing resolution (CR) (H.R. 4378) that would avert a government shutdown, by a 301-123 vote. Now the Senate has five legislative days to pass the funding autopilot bill (current gov’t funding expires Sept. 30th) which would give lawmakers until November 21 to pass the remaining full year appropriations bills for the Fiscal Year that begins next month.
The bill was passed after Democrats compromised with the Trump Administration on allowing farmers to continue to receive reimbursements for the cost of tariffs. CR funding would be at levels provided under FY 2019 appropriations laws. The bill also would extend several programs that are slated to expire at the end of fiscal 2019, including the National Flood Insurance Program and various health programs. The Senate is expected to pass the CR next week and then both chambers are expected to leave for a two-week recess.
Given than Congress is likely to approve a spending bill through November 21, action on a tax extenders/retirement fixes/technical fixes to the GOP’s Tax Cuts and Jobs Act will have to wait until November or even into December. A retroactive extension of the biodiesel blender’s tax credit through 2019 as well as a prospective renewal of the oil spill liability tax (OSLT) is likely to be included in a tax extenders package to be included later this year.
Meanwhile, House Democrats are reportedly working on a clean energy package that could jump start negotiations on a tax extenders package. One of the likely demands is to extend and expand the $7,500 EV tax credit which would benefit Tesla and GM who have already hit their EV targets meaning that they are no longer able to take advantage of the current credit. The package will likely include demands for solar and wind credits. Stay tuned.
Trump Weighs Options as Farming and Oil Interests Spar
According to recent reports, the Trump Administration is drafting a plan that would increase blending mandates under the RFS by five percent over 2019 volumes. The White House, EPA and Department of Agriculture are formulating final details of the plan. The increase in blending mandates are important to petroleum marketers because it could drive up RIN prices and force E15 on the market. The administration is taking this action in order to shore up support among farmers who are angry over falling crop prices from stagnant ethanol blending volume and loss of market share due to the recent increase in small refinery blending waivers and ongoing trade war with China. However, the Trump Administration’s plan is unlikely to satisfy renewable fuel producers because the higher blending volumes are not enough to offset the 4.2 billion gallons of renewable fuel lost to small refinery blending waivers. The plan’s expected unveiling could happen as soon as October 1.
In response to the reports, numerous oil refinery executives sent a letter to President Trump last week asking him to ignore the demands of farming interests to increase the blending mandates of biofuels under the RFS. After meeting with oil refiner executives last week, President Trump said that it has been very difficult to find a plan that would appease both refiners and farmers.
Vice President Mike Pence met with Sen. Chuck Grassley (R-IA) and other farming states last week to discuss the issue of small refinery exemptions and what the administration can do to help farmers. According to reports, the potential deal would include a limit to the number of small refinery exemptions that EPA issues, an increase in the volumes of biofuels that must be blended into gasoline and efforts to boost the spread of E15. Sen. Grassley announced that he felt that an agreement had been reached but is waiting to see how the EPA will write the specific policies.
Furthermore, oil-state Senators met with President Trump yesterday to discuss putting a cap on RINs prices, and allowing the EPA to sell its own waiver credits if RINs prices skyrocket. However, Sen. Grassley has stated that this would be a deal breaker for the ethanol industry.
Please Continue to Urge Congress to Extend the Biodiesel Blender’s Tax Credit
Given that Congress is back in town, please continue to remind them to extend the $1 per gallon biodiesel blender’s tax credit.
Since 2005, there has been a $1 per gallon biodiesel and renewable diesel blenders' tax credit which was created to stimulate production and consumption of biodiesel and renewable diesel. The biodiesel blender's credit has worked successfully to build a strong incentive for downstream fuel marketers to blend renewable fuel into the fuel supply which has lowered prices for motorists and heating fuels for consumers. As a result, the U.S. biodiesel and renewable diesel market has grown from roughly 100 million gallons in 2005 to nearly 2.6 billion gallons in 2017.
Unfortunately, the tax credit expired on December 31, 2017 and has been in limbo since. Congress must act before the end of this year to retroactively extend the credit for calendar year 2018 and through at least 2019.
Click here to urge your members of Congress to cosponsor H.R. 2089/S. 617 to renew the tax credit.
Fuel Fund Seeks Help for Bahamians
As is often the case, Fuel Relief Fund (FRF) is one of the first aid organizations on the ground following a disaster. With a team now on Great Abaco Island, the area hardest hit by Hurricane Dorian, and an initial shipment of fuel being sent from the US mainland, we will be able to start distributing fuel. But this will not even come close to being enough. FRF need tens-of-thousands more gallons of fuel to reach those in need.
Please consider donating today to help the people of the Bahamas. Every dollar counts! To read the notice in its entirety and to donate, click here.
EPA Considering a Re-do of Its 2018 Upwind States Ruling
Following a recent partial overturn of a rule, EPA is now considering re-working its 2018 ruling on upwind states requirements, which will play a role in determining who meets the 2008 ozone standard ahead of the 2021 deadline. The EPA's 2018 rule declared that upwind states have done enough to curb their ozone-forming pollution. Recently, however, the D.C. Circuit Court of Appeals ruled that a previous EPA ruling, its 2016 update to the Cross-State Air Pollution Rule (CSAPR close-out rule), which was designed to harmonize it with the 2008 ozone standard, had failed to set deadlines for upwind states to act and told EPA to fix it. Now EPA has until October 29, 2019 to respond to the ruling and then to determine what to do about it.
The Court of Appeals ruled that the Obama Administration had not set a deadline for upwind states to eliminate air pollution that drifts into downwind states. The “good neighbor” provision of the Clean Air Act requires upwind states to reduce ozone-forming pollution that drifts into downwind states. Specifically, the court declared, “The Rule’s open-ended compliance timeframe exceeds the bounds of EPA’s statutory authority by allowing upwind states to continue their significant contributions to downwind nonattainment well past the deadline for downwind areas to comply with the National Ambient Air Quality Standards.” Three-quarters of ozone pollution in downwind states are caused by pollution from upwind states. In 2016 EPA did not set a deadline for upwind states to fully curb their emissions that significantly contribute to downwind states air quality problems, yet the downwind states had already been forced to comply with the standard.
Announcing Our Fall Meeting Partner Sponsors!
PMAA wants to give a huge THANK YOU to our Fall Meeting 2019 Partner Sponsors: Federated Insurance, RAI Trade Marketing Services, Renewable Energy Group, Inc., Altria Client Services, The Spirit® Brand and Meridian Associates, Inc.
We appreciate the loyalty and support of our PMAA Corporate Partners and their continuous commitment to the petroleum industry. For more information on our Partner Programs, please contact Susan Isard.
PMAA Corporate Platinum Partner Spotlight Featuring:
Planning Tool Helps Guide Disaster Preparation and Recovery Strategies
The skies are clear. The river is at its normal level. Authorities are reporting a low risk of wildfire. Fault lines have been quiet. It’s tempting to operate your business as if these will always be the case. But what will you do when disaster strikes? Ask any business owner who has been through a disaster — thorough preparation makes all the difference.
When you experience a catastrophe, the trauma and stress make it difficult, if not impossible, to think clearly enough to begin setting things right. And unless you’ve collected all the documents and information you need for operational continuity; you’ll have a hard time getting things moving again.
Please click here for the press release on Federated’s Tool Guide. For additional information or to discuss further, please contact your Federated regional representative or PMAA’s newly assigned National Account Executive Jack West at 800.533.0472. Federated is a PMAA Corporate Platinum Partner.
FINAL CALL: Please Pre-Register TODAY for PMAA’S Fall Meeting September 30-October 1
PMAA will hold its Fall Meeting in conjunction with the NACS Show on September 30-October 1 at the Hyatt Regency Atlanta located in the heart of downtown Atlanta. It is an excellent opportunity to meet your fellow marketers to discuss and learn more about our industry, while also enjoying all the great activities and restaurants that Atlanta has to offer.
The PMAA meeting will begin with a New Attendee Orientation mid-afternoon on September 30 followed by the Federal Legislative Update which will fill you in on everything happening in Washington. A welcome reception with NACS to State Association Leaders (All PMAA members are welcome) will follow at Georgia World Congress Center. PMAA will provide round-trip shuttle service. On the morning of October 1, there will be a Buffet Breakfast followed by Region and Committee Meetings. The PMAA Board of Directors meeting is scheduled after the Distinguished Service Award Luncheon sponsored by PMAA’s Corporate Platinum Partner Federated Insurance. New Mexico Marketer Benny Hodges is this year’s recipient of PMAA’s highest honor.
Click here for our event website for all details including registration with secure event payment processing through Cvent. Please note that NACS Housing is no longer taking hotel reservations and you will need to contact the hotels directly. More information on this is on the Hotel and Travel tab of the event website. To register, responding to PMAA’s event email invitation is the recommended method to register or decline. You can also register through the website at the Register Now tab. Pre-registration is encouraged by September 23 to expedite your time during the conference, to be included in our hotel guarantees and to have a name badge ready for you.
Please note that the NACS Show registration is separate from the PMAA Meeting Registration.
We look forward to seeing you in Atlanta!
Purchase PAC Raffle Tickets for a Chance to Own a Dustin Johnson Autographed TaylorMade Golf Hat and a Titleist Velocity Masters Golf Ball
Purchase your PMAA Political Action Committee (PAC) raffle tickets now for an opportunity to win an autographed TaylorMade golf hat and a Titleist Velocity Masters golf ball with display case by Dustin Johnson. He is an American Professional golfer who plays on the PGA Tour. He has been a success almost from the moment he showed up on the PGA Tour as one of pro golf’s longest drivers and he is ranked number 2 in the world of golf. It is also backed by SportsMemorabilia.com’s authenticity guarantee.
The PMAA SBC PAC will hold the raffle during the Fall Meeting in Atlanta, Georgia being held September 30 to October 1 and the raffle winner will be identified during the Board Meeting on October 1. The winner does not have to be present to win. If you are not attending the conference, you will be notified the week following the October drawing if you are the fortunate owner of the Dustin Johnson’s Collectibles.
The proceeds of the raffle will benefit the PMAA SBC PAC. The money distributed to the PAC is used to benefit federal legislators who support the industry and have a solid record on key industry legislative issues. Tickets are $25 each or five for $100. Advanced tickets are available until September 27 by contacting Sabrina Pitcher at 703-351-8000. Ticket sales will continue at PMAA’s Fall Meeting in Atlanta, Georgia on September 30. Tickets must be paid for with personal funds by MasterCard, VISA, American Express, Cash or Check (checks should be made out to the PMAA Small Business Committee).
INTL FCStone Hosting Energy Risk Management Academy November 12, 2019
INTL FCStone Financial Inc., a PMAA Corporate Bronze Partner, is hosting an Energy Risk Academy in Omaha, Nebraska on November 12. This interactive, pure educational seminar will provide you with an informative overview of the energy market and how implementing a price-risk management strategy could help protect your bottom line from being seriously impacted during volatile times.
In times of volatile energy prices, energy producers and consumers need to know all available Price Risk Management alternatives to meet their energy needs.
Besides the benefit of invaluable market knowledge, INTL FC Stone is offering PMAA members $100 off the registration fee by using the discount code: ENERGY. Those members who register before October 15th will also receive an automatic early-bird discount of an additional $50 off registration.