FYI
Visit
for late breaking news.
8 • OIL
&
ENERGY
NEFI Submits Written Comments Supporting
Renewable Fuel Rule Blending Credit Reform
NEFI recently submitted written comments to the EPA on a proposed
rule to reform the Renewable Fuel Standard (RFS) program by reducing
the likelihood of counterfeit blending credits from entering the
marketplace. Refiners require blending credits generated from biofuels
blended below the terminal rack in order to meet annual blending
volumes imposed by the EPA for above the rack operations.
Blending credits under the RFS program have become more
valuable as refiners miss EPA mandated blending targets. As the value
of blending credits increase, so do counterfeit credits. Counterfeit
credits result in distrust of the market by those seeking to purchase
credits to augment above-the-rack blending volumes. Over the past
two years, unsuspecting refiners purchased millions of fraudulent
renewable fuel blending credits.
The proposed rule is important to heating oil dealers for two reasons.
First, blending credits will become more valuable to below-the-rack
blenders as states in the Northeast move forward with plans to require
minimum biodiesel content in home heating oil, therefore integrity in
the credit trading system is important. Second, the proposed rule would
require lengthy new bio-content shipping paper language that may
affect metered delivery tickets for home heating oil.
In comments on the proposed rule, NEFI told the EPA that it
supports more transparency in the blending credit market so that
authentication of credits can be more easily determined by
purchasers. NEFI also asked the EPA to exempt metered delivery
tickets for home heating oil customers from the proposed biodiesel
blend content notification requirement. NEFI told the EPA that the
proposed notification is too long and cannot be printed on customer
delivery tickets by mechanical meters, which have limited line and
character printing capabilities.
Bipartisan Bill Could Limit Bank Access To Free Money
Senators Sherrod Brown (D-OH) and David Vitter (R-LA) recently
announced plans to introduce legislation in the U.S. Senate that would
seek to prevent taxpayer bailouts by placing new restrictions on large
banks. This includes prohibiting access to cash at nearly zero-interest
rates via the Federal Reserve Discount Window for non-commercial
banking operations such as derivatives deals. If this applies to
commodities derivatives, it could potentially stop large financial
institutions from gambling in commodities with cheap taxpayer-
provided money from the Fed.
The bill’s prospects are unclear. It could get traction in the Senate,
where lawmakers are set to begin drafting legislation to reauthorize
the Commodity Futures Trading Commission (CFTC). CFTC
Reauthorization could ignite a debate over several areas of financial
regulation; including the merits of recently introduced House
legislation that could considerably draw back financial regulations
rather than strengthening them. As part of its role as co-chair of the
Commodity Markets Oversight Coalition, NEFI is monitoring
developments closely and is prepared to engage lawmakers during
the CFTC Reauthorization process in order to (1) preserve reforms
designed to increase transparency and stability in the commodity
markets and (2) to further strengthen necessary protections for
hedgers and consumers and (3) to limit the harmful effects of
disruptive trading and excessive speculation.
Energy Secretary Nominee
Hails Natural Gas ‘Revolution’
At his confirmation hearing before the Senate Energy Committee
last month, Energy Secretary-nominee Ernest Moniz, a nuclear
physicist and a researcher at MIT, called for a major expansion in
natural gas use in the United States. Moniz called the surge in natural
gas production a “revolution” that has lowered energy costs for
manufacturers and others and resulted in a decline in U.S. carbon
emissions to their lowest levels since 1994. These comments raise
questions about Moniz’s support for natural gas exports. As Energy
Secretary, Moniz would be responsible for green-lighting exports
under the Natural Gas Act of 1938. A total of 21 requests for export
permits are currently pending at the Department of Energy. Moniz
was noncommittal on gas exports during the hearing and said he
would review each export permit request on a case-by-case basis.
In its recently approved 2013 agenda, NEFI announced support for
establishing competitive parity between oil and natural gas in the
global market through the approval of natural gas exports.
EPA Proposes To Amend Ultra-Low
Sulfur Diesel Fuel Dispenser Label Rule
The U.S. EPA is proposing to amend a key provision in the federal
Ultra-Low Sulfur Diesel fuel (ULSD) regulations that will have an impact
on heating oil dealers with wholesale and retail diesel dispensers. The
good news is that the proposed amendment comes in the form of
regulatory relief. The EPA is proposing to eliminate the dispenser label
requirement for diesel fuel pumps dispensing clear highway 15-ppm
ULSD. Currently, the EPA requires any pump dispensing clear highway
ULSD, including skid tanks, to have the following label affixed in a
conspicuous manner:
“ULTRA-LOW SULFUR HIGHWAY DIESEL FUEL
(15-PPM SULFUR MAXIMUM)
Required for use in all highway diesel vehicles and engines.
Recommended for use in all diesel vehicles and engines.”
The EPA is proposing to eliminate the label requirement for clear
highway 15-ppm ULSD beginning December 1, 2014. The agency is
also proposing to drop the label requirement because the sulfur
content of all clear highway diesel fuel is now 15-ppm nationwide and
there is no longer a need to distinguish it from 500-ppm highway
diesel fuel, which has been completely phased out. The EPA will allow
voluntary use of the clear highway 15ppm ULSD label on a voluntary
basis after 12/01/14 for those marketers who wish to avoid potential
consumer confusion when refueling. The EPA clear highway diesel fuel
label
must not
be confused with dyed diesel dispenser labels required
by the IRS. The IRS label that reads …
“DYED DIESEL FUEL, NONTAXABLE USE ONLY,
PENALTY FOR TAXABLE USE”
…must still be placed in a conspicuous area on both sides of every
wholesale and retail dispenser, including skid tanks selling dyed diesel
fuel. The IRS vigorously enforces the dyed diesel dispenser label
requirement and issues a $10 per gallon penalty for every gallon of
fuel in the above or below ground storage tank supplying the
dispenser not correctly displaying the IRS label.
