OPMCA Connection
Keeping You Informed!


OPMCA Connection keeps you informed and current on regulations from all state and national agencies as well as laws pertaining to the petroleum marketing/c-store industry.
OPMCA STAFF

Candace McGinnis
Executive Director  
Candace@opmca4you.com 

Hannah Fite
Director of Member Services  
Hannah@opmca4you.com

OPMCA  
6420 N. Santa Fe, Suite B
Oklahoma City, OK 73116
Phone: (405) 842-6625 
(800) 256-5013 
Fax: (405) 842-9562
2019-2020 Board of Directors

Jerry Davidson, Chairman  
 Pete's Corporation

Tommy Shreffler
OnCue Marketing, LLC

Teresa Hollenbeck
Red Rock Distributing Company

Kurtis Hutchinson
Hutchinson Oil Company

Duff Thompson
AVP Metro Petroleum LLC

Rob Toth
Coffeyville Resource
Fall Outing Registration is OPEN!!
The 2019 OPMCA Fall Outing will be held on Sept. 9-10 at the Shangri-La Golf Club, Resort and Marina. Guests will enjoy two days of golfing, a yacht cruise, a Luau themed dinner and more! The room block ends August 25th , be sure to register and book your room before then!
Monday, July 15, 2019
  • HOS waiver for: ALABAMA, ARKANSAS, FLORIDA, GEORGIA, ILLINOIS, INDIANA, KANSAS, KENTUCKY, LOUISIANA, MISSISSIPPI, MISSOURI, OKLAHOMA, TENNESSEE AND TEXAS

  • PMAA Reminds Petroleum Marketers to Object to the Interchange Fee Settlement

  • PMAA Compliance Bulletin: EPA Compliance Requirements for Sale of E15 Gasoline Blends

  • Senators Urge Trump Administration to Preserve RFS Small Refinery Waivers

  • Ways and Means Chairman Says Technical Corrections Bill Will Get Done This Year

  • EPA Releases Proposed RFS

  • What Impacts Retail Gas Prices?

  • Federated Insurance Complimentary Webinar
HOS Waiver
All, FMCSA issued the following HOS waiver for: ALABAMA, ARKANSAS, FLORIDA, GEORGIA, ILLINOIS, INDIANA, KANSAS, KENTUCKY, LOUISIANA, MISSISSIPPI, MISSOURI, OKLAHOMA, TENNESSEE AND TEXAS.

Click HERE to view.
PMAA Reminds Petroleum Marketers to Object to the Interchange Fee Settlement
PMAA General Counsel advises that all branded marketers and branded c-store operators object to the pending $6.24 billion settlement in the consolidated payment card interchange fee class action case (In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL-1720) by July 23, 2019. The settlement class is comprised of all merchants that accepted Visa and Mastercard payment cards from January 1, 2004 to January 25, 2019. The settlement fund is designed to compensate class members for the interchange fees they paid, which were allegedly inflated as a result of certain violations of the antitrust laws by Visa and Mastercard and their participating banks.

Please understand that objecting to the settlement is different from opting out of the settlement. PMAA DOES NOT recommend opting out of the class . If you do so, you will not be able to participate in the settlement. If you do nothing, you will remain in the class (if you are, in fact, a member of the class) and if, and when, the settlement is finally approved in November 2019, you will be sent a claim form to fill out. If you object to the settlement (which is what we recommend), you will remain in the settlement class and receive a claim form if and when the settlement is finally approved. There are no adverse consequences associated with objecting. Enclosed is a template (WORD DOC) that PMAA General Counsel prepared for PMAA members who wish to object to the proposed settlement . If you read the template PMAA prepared as well the class notice (page 12), you will be advised of the basis for
objecting. Please note: Any Valero marketer who received a notice of ineligibility to participate in the settlement, please contact PMAA General Counsel at aalfano@bmalaw.net . Finally, PMAA has no reason to recommend that unbranded motor fuel marketers, heating fuels marketers, or unbranded c-store operators object to the proposed settlement.

Last December, PMAA filed objections to the settlement over concerns that branded marketers would not receive notice or payment because their major oil company suppliers are the only entity known to credit card processors. Although Judge Brodie of the US District Court for the Eastern District of New York addressed this issue by saying, "Class Counsel assured the court that Branded operators would in fact receive notice,” PMAA does not count on Visa and MasterCard sending settlement notices to branded jobbers even though jobbers ultimately paid the excessive interchange fees that will fund the settlement. A Court hearing will be held on November 7, 2019 to decide whether to approve the settlement.

PMAA plans to file another objection to the settlement before the July 23 rd deadline.  

PMAA Compliance Bulletin: EPA Compliance Requirements for Sale of E15 Gasoline Blends
On May 30, 2019, EPA finalized regulatory changes to allow gasoline blended with up to 15 percent ethanol (E15) to take advantage of the 1-psi Reid Vapor Pressure (RVP) waiver that currently applies to E10 during the summer months. Previously, E15 could only be sold during the winter driving season. With the EPA’s latest rule, E15 may now be sold year-round beginning June 5, 2019, subject to certain regulatory requirements. Petroleum marketers who wish to sell E15 to retail or wholesale purchaser consumers must comply with the following requirements. PMAA Contact: Mark S. Morgan , PMAA Regulatory Counsel

Click here to read the compliance requirements.

Senators Urge Trump Administration to Preserve RFS Small Refinery Waivers
At the end of June, Senators Jim Inhofe (R-OK), Ted Cruz (R-TX), Pat Toomey (R-PA), along with six other GOP Senators, said that the small refinery hardship waivers are working and there is no need to stop issuing them. The GOP Senators were responding to a June 11 th letter from Democrat presidential hopefuls Sens. Amy Klobuchar (D-MN), Kristen Gillibrand (D-NY) and Michael Bennet (D-CO) urging the Trump Administration to cease issuing the waivers because it undermines the future of E15 growth which helps rural America. Sen. Toomey said in a statement that “The waivers simply diminish the burden of this terrible mandate on refineries least able to afford it, and therefore allow them to continue doing business.”

Earlier in June, Senators Deb Fischer (R-NE) and Tammy Duckworth (D-IL) introduced legislation known as the “RFS Integrity Act of 2019” which would require small refineries to petition for RFS hardship exemptions by June 1st of each year to ensure that the EPA accounts for exempted gallons in the annual Renewable Volume Obligations (RVOs) it sets each November. The bill also seeks to increase transparency by ensuring that certain information surrounding the exemptions is made available to the public through freedom of information laws. Furthermore, the bill would require the EPA to notify Congress on the methodology it uses when granting small refinery exemptions and provide some information on the companies applying for the waivers.

Under the RFS, refiners must blend certain volumes of biofuels into their fuel each year or purchase credits from those that do. Small refineries with a capacity of less than 75,000 barrels per day can receive waivers if they prove that compliance with RFS would cause them significant economic harm. The EPA has granted over 40 SREs for 2016 and 2017 compliance years and has indicated that it has received 40 petitions for SREs for 2018. Midwestern Senators have criticized the Trump Administration for granting the refinery waivers and not reallocating them to other obligated parties to make up for the lost gallons. Additionally, biofuel groups have argued that the numerous refinery waivers from 2016-2017 have indirectly reduced the
ethanol mandate which have driven down RIN values and, therefore, weakened the market for E15.

The Trump Administration has come under fire for issuing the waivers because corn growers argue that the SREs undermine the growth of E15 since it lowers RIN values. The Wall Street Journal reported recently that the Trump Administration may be inclined to limit the number of SREs it grants for 2018 to improve ethanol sales and chances for reelection.
Click here to read the story.

Ways and Means Chairman Says Technical Corrections Bill Will Get Done This Year
At a markup of three tax bills in June, House Ways and Means Committee Chairman Richard Neal (D-MA) stated that a "technical corrections" bill for the 2017 tax reform law is coming this year. His comments came after Rep. David Schweikert (R-AZ) tried to attach several provisions fixing errors in the Tax Cuts and Jobs Act, including the “retail glitch” that makes retailers (who do not sell fuel) ineligible for the benefit of 100 percent bonus depreciation for qualified improvement property acquired and placed into service after September 27, 2017. Congress could likely merge a technical corrections bill with a tax extenders package later this year which would include a short-term extension of the biodiesel blender’s tax credit along with a prospective renewal of the oil spill liability tax (OSLT).

The Qualified Improvement Property (QIP) coalition, in which PMAA supports, has made this a top priority to fix the retail glitch. Section 168 of the old tax law had three individual categories of qualified improvement property: leasehold improvement property; retail improvement property; and restaurant improvement property. Each category had a 15-year Modified Accelerated Cost Recovery System (MACRS) recovery period, meaning property could depreciate over the course of 15 years.

To simplify the tax code, tax writers combined the three above categories into one category called “qualified improvement property” in the new bill and meant to designate it with a 15- year recovery period. The intent to designate this 15-year recovery period was explicitly stated in the conference agreement. However, when the final bill was written, the 15-year recovery period was accidentally omitted from the text by tax writers, and the recovery period then
defaulted to 39 years. This omittance is a serious mistake because to benefit from 100 percent bonus depreciation, there must be a MACRS recovery period of 20 years or less.

Without the inclusion of the 15-year recovery period:
  • Recovery period increases from 15 years to 39 years
  • Retailers no longer qualify for bonus depreciation
  • In the old law, retailers qualified for 50 percent bonus depreciation. 

EPA Releases Proposed RFS
On July 5th, the EPA proposed increasing the volume of renewable fuels to 20.04 billion gallons in 2020, up from 19.92 billion gallons in 2019. The corn ethanol mandate was not reduced, but will remain at the 15 billion-gallon statutory maximum set by Congress under the RFS. On the biodiesel front, the rulemaking also proposes to set the 2021 renewable fuel volume for biomass-based diesel at 2.43 billion gallons, level with the 2020 blending requirement.

Overall, the proposed 2020 renewable fuel volumes are a mixed bag for petroleum marketers. The good news is that the rule did not propose to force large refiners to make up for the lost gallons of obligated blending volume lost in 2019 due to blending waivers issued by the EPA to small refineries based on financial hardship. Carrying those gallons over to large refiner obligated blending volumes for 2020 likely could have caused the value of corn RIN blending credits to increase.

The corn ethanol industry and many midwestern lawmakers are not pleased with EPA's move which indirectly reduces the corn ethanol mandate and the potential market for E15 blends. They argue that it has reduced the ethanol mandate by 2 billion gallons below statutory volume requirements.

Under the RFS, refiners must blend certain volumes of biofuels into their fuel each year or purchase credits from those that do. Small refineries with a capacity of less than 75,000 barrels per day can receive waivers if they prove that compliance with RFS would cause them significant economic harm. The EPA has granted over 40 SREs for 2016 and 2017 compliance years and has indicated that it has received 40 petitions for SREs for 2018.

For petroleum marketers, the corn ethanol mandate continues to put marketers in a precarious situation given UST system incompatibility with E10 plus blends with regard to the seals, glues, gaskets and other components that would force them to break concrete to sell higher ethanol blends.

PMAA will be filing comments to the EPA on the proposed blending volumes prior to the deadline.

Below are detailed graphs of EPA's proposal

What Impacts Retail Gas Prices?
The National Association of Convenience Stores recently worked with  The Wall Street Journal  to produce a five-minute online video that concisely explains why gas prices may vary around the country—and even from one corner to the next.

“Anyone who has a friend or relative who is always complaining that there’s a conspiracy regarding gas prices, should share this video with them,” said Jeff Lenard, vice president of Strategic Industry Initiatives, NACS.

The presentation is available on both the  WSJ website  and  YouTube .
For more on how gasoline prices can fluctuate with the seasons and market-related events, see  “Changing Seasons, Changing Gas Prices”  in NACS Daily. NACS also has fuels-related research and resources at  convenience.org/fuels.

Federated Insurance Complimentary Webinar
Cyber Security and Risk Management Tuesday, July 16, 2019 (1 PM CT)
45 minutes | Complimentary | Advance registration required

Hardly a day goes by that we don’t hear about a security breach or incident involving the loss of sensitive data to outside influence or “hackers.” We will discuss several layers of risk management that could or should be implemented to reduce a business’s exposure, as well as coverage options available to transfer this risk to an insurance carrier. Cyber-crime is the fastest growing and most dynamic exposure in business today and we’ll address strategies to minimize the risk. 

Click HERE to register now!