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.

Candace McGinnis
Executive Director  

Hannah Fite
Director of Member Services  

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!
Tuesday, July 30, 2019
  • Petroleum Storage Tank Rules Effective August 2, 1019

  • PMAA priorities Report July 2019

  • EPA to Hold RFS Hearing on July 31st

  • PMAA Objects to the Proposed Visa/Mastercard Settlement Case

  • FDA proposal Banning Sales of Flavored E-Cigarettes in Convenience Stores in Flawed

  • Highlights From NCWM's Annual Meeting

  • We Card Awareness Month September - 2019

  • Federated Insurance July Educational Articles
Petroleum Storage Tank Rules Effective August 1, 2019
PMAA Priorities Report July 2019
PMAA has put together a report of the top priorities/issues for July 2019. To view the full report, please click HERE.

EPA to Hold RFS Hearing on July 31st  
The EPA recently announced that it will hold a hearing on July 31st at 9:00am in Ypsilanti, Michigan regarding its proposed rule to set 2020 renewable volume obligations (RVOs) and the 2021 RVO for biomass-based diesel under the Renewable Fuel Standard (RFS). 

On July 5, the EPA released its proposed RFS obligated blending volumes for 2020. The proposal increases 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 billiongallon 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.

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.

PMAA Objects to the Proposed Visa/MasterCard Settlement Case 
Last week, PMAA, SIGMA and the National Association of Shell Marketers (NASM) (“the Associations”) filed an objection to the proposed Visa/MasterCard settlement case over concerns that branded petroleum marketers would be unable to file a claim against the pending $6.24 billion settlement fund in the consolidated payment card interchange fee class action case (In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL-1720). The settlement class is comprised of all merchants that accepted Visa and Mastercard payment cards from 2004 to the present. 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. 

Major oil refiners have claimed to be class members that are entitled to receive payment from the settlement fund even though they have divested nearly all of their company-owned retail sites over the last 20 years. The Associations argued that petroleum marketers are “Branded Operators” and class members who are entitled to the settlement fund because they “accept” the Visa/MasterCard at their branded outlets. The Associations said in their objection, “In fact, standard contractual language in agreements that Branded Operators sign in order to purchase motor fuel and use the name of major refiners at their outlets requires that Branded Operators accept Visa and MasterCard payment cards, among others. There should be no question, then, that Branded Operators are class members for the transactions they accept.” Click here to read PMAA, SIGMA and NASM’s statement of objection. 

A Court hearing will be held on November 7, 2019 to decide whether to approve the settlement.

FDA Proposal Banning Sales of Flavored E-Cigarettes in Convenience Stores is Flawed
Urge Your Senators to Support Bill to Crack Down on Online Sales of E-Cigarettes to Minors

In March, the Food and Drug Administration (FDA) issued draft guidance that would effectively ban flavored e-cigarette sales in convenience stores. Under the draft guidance, stores would continue to be able to sell tobacco, mint and menthol flavored e-cigarette products but would not be able sell other flavored products unless minors are prohibited from entering the stores or those products are sold in a separate section of the store that minors are prohibited from accessing. At the same time, however, vape shops and online retailers would continue to be allowed to sell these products.

Although the FDA’s actions are aimed at reducing teen vaping, its policies, if implemented, could actually lead to an increase in teen vaping and are counterproductive. Henry Armour, CEO of the National Association of Convenience Stores (NACS), recently argued in an op-ed for CNBC that the studies the FDA cites in its own policy proposal do not back up the agency’s claims that their actions would reduce teen vaping. Click here to view the article.

Armour examines statistics from studies cited in the FDA’s own policy proposal related to the sale of e-cigarettes to minors. For instance, an August 2018 study cited by the FDA found that more than half of minors that obtain e-cigarettes receive them from people over the legal age to purchase the products, also known as “social sources.” The study showed that only 31 percent of minors who obtained e-cigarettes bought them in a retail sale. Interestingly, nearly 70 percent of e-cigarettes purchased by minors in a retail sale were purchased from either a vape shop, tobacco store or online. Oddly, under the FDA’s proposed policies, these are the only outlets that will be permitted by the FDA to sell flavored e-cigarette products. In fact, the same study found that only 5.6 percent of e-cigarette purchases by minors were made at convenience stores. As Armour states in his article, “vape and tobacco stores sell about 20 times as many e-cigarettes to minors as convenience stores — even though convenience stores outnumber them by 15 to 1.” 

PMAA is also concerned with FDA’s proposal because it will undoubtedly be counterproductive based on the facts from previous studies. PMAA has been working closely with NACS and other groups on this issue and has been urging the FDA to withdraw its current proposal. PMAA supports FDA’s efforts to curb teen vaping but the current policy proposal will not work and will likely lead to an increase in e-cigarette use by minors. In May, PMAA submitted comments on FDA’s draft guidance. Click here to read the comments.

PMAA is also advocating for a bill that was recently introduced by Sens. John Cornyn (R-TX), Diane Feinstein (D-CA) and Chris Van Hollen (D-MD) known as the “Preventing Online Sales of E Cigarettes to Children Act” (S. 1253). The bill would prohibit online sales of e-cigarettes to minors by applying the same safeguards already in place for regular cigarettes and smokeless tobacco products. The bill amends the “Prevent All Cigarette Trafficking Act (PACT Act)” to also include e-cigarettes in the definition that already includes traditional cigarettes. 

Specifically, the bill would require online retailers of e-cigarettes to:

• Verify the age of customers for all purchases.
• Require an adult with ID to be present for delivery.
• Label shipping packages to show they contain tobacco products.
• Comply with all state and local tobacco tax requirements.

PMAA asks that you remind your Senators to cosponsor this important legislation. Click here to do so.

Highlights from NCWM’s Annual Meeting
Earlier in July, the National Conference of Weights and Measures (NCWM) held its annual meeting. Several proposals were on the table that are likely to impact petroleum marketers. 

  • The Skimmer Task Group presented a proposal to the NCWM Specifications and Tolerances Committee (S&T) that would require “Any retail motor fuel device capable of conducting customer initiated electronic financial transactions must be secured to substantially restrict the ability of unauthorized persons to manipulate it to obtain payment information that could be used to commit fraud.” The proposal provides four options for 1) physical lock, locking device, or a physical securing device that will restrict access, 2) Electronic alarming or disabling of the equipment, 3) Advanced payment acceptance technologies that increase protections against the theft of payment information, 4) or other alternative approved by local or state weights and measures authorities. There was substantial discussion of this proposal during open hearings. Some commenters questioned whether weights and measures is the correct authority to deal with this issue. In general, however, this seemed to have the support of many states. This is an informational item and S&T agreed to keep this item as an informational item, so it was not approved. 

  • The conference approved revisions to Handbook 44 Section 3.30 Liquid Measuring Devices to include diesel exhaust fluid (DEF) dispensers as Retail Devices. This was accomplished by revising the term Retail Motor Fuel Devices to Retail Devices and subjects DEF dispensers to the same provisions as motor fuel dispenser. 

  • The conference approved revisions to exempt sites where no product grades are repeated (one dispenser for each product) from displaying the dispenser designation on a printed ticket. The purpose of adding a dispenser number to a printed ticket is so that if there is a problem, the problem can be traced back to the dispenser. If there is only one dispenser that sells a particular product (e.g., regular gasoline) at a site, then a dispenser number is not needed to identify the dispenser that sold the product.

  • The conference approved revisions to the Laws and Regulations Handbook 130 Section 2.2.1 Premium Diesel Fuel to revise the definition of premium diesel fuel and the names that can be used to designate a premium diesel fuel. The revised definition is the result of an industry effort to provide consistency in the marketplace on what minimum specification needs to be met to call a diesel fuel premium, super, supreme, or premier. The revision sets minimum standards for cetane, low temperature operability, lubricity, corrosion, filter blocking tendency, and injector deposit control. In addition, the revision also provides criteria for identifying a diesel fuel (e.g., plus diesel) that offers additional benefits over diesel fuel but does not meet the criteria for premium. PMAA supported this item.

  • Finally, the conference approved revisions to Handbook 130 Section G. 2.1.2 Gasoline-Ethanol Blends to allow the sale of E15 during the summer months. This section currently requires ethanol blends to meet ASTM D4814, Standard Specification for Automotive Spark-Ignition Engine Fuel with the exception of blends containing 9 to 10 volume percent ethanol as allowed by EPA regulations during the summer months. The purpose of this proposal is to modify this section to include ethanol blends up to 15 percent based on the recent EPA final rule. This item was proposed as a priority item which moved the item directly to voting. This proposal was hotly debated. Industry, including PMAA, opposed moving this forward to vote as a priority item. It was felt that the proposal was not properly researched and vetted and that this revision would result in conflicts between EPA requirements and Handbook 130. Industry proposed further consideration. The ethanol industry and several states argued that without this change, states that adopt Handbook 130 would not be able to allow the sale of E15 during the summer months. Ultimately, the item was approved by the NCWM.

We Card Awareness Month - September 2019
We Card  has a variety a communication tools to prepare you for We Card Awareness Month in September that can be downloaded at  www.wecard.org/awareness.

  We Card's  goal is to highlight September as a time to encourage retailers to train or re-train store employees, order 2020  We Card  materials (calendars and kits) and raise awareness of FDA regulations, state and local law compliance on tobacco, e-cigarettes and vapor products.  
During this fiscal year, FDA has already completed 106,000 compliance checks nationwide as of June 30th. Ongoing state level and local compliance checks and the focus on e-cigarettes and vaping products as age-restricted products makes it a terrific opportunity to step up responsible retailing efforts to identify and prevent age-restricted product sales to minors.
Federated Insurance July Educational Articles