Petroleum Marketers Address Legislative Concerns
NEW YORK -- Congress and the Obama Administration are moving on three issues that significantly impact the marketing of petroleum products: global climate change, the regulation of commodity futures trading and credit card interchange fees, according to representatives of the Petroleum Marketers Association of America.
Speaking at Telvent DTN's Government Affairs Recap webinar yesterday, PMAA Manager of Regulatory Affairs and Communications Brandon Wright and Vice President Sherry Cabrera said the association was making headway and educating lawmakers on these three issues, which directly affect the way motor fuels are sold.
Climate Change
In the area of global climate change, the Environmental Protection Agency (EPA) favors a cap-and-trade program to limit the amount of greenhouse gas emissions coming from the transportation fuels and other industries, targeting companies that emit the highest levels of CO2. Under a cap-and-trade approach, a national inventory of current greenhouse gas emissions would be taken to establish an emission baseline, according to PMAA. After the baseline is known, a cap on emissions will be established somewhere below the current baseline so that emitters will be forced to purchase credits from the EPA to exceed the cap.
In June, the House of Representatives passed the American Clean Energy and Security Act, with just one vote more than the 218 needed to pass, which is intended to decrease CO2 emissions 17 percent by 2020. It also establishes a cap-and-trade program with the petroleum industry, which PMAA said emits 44 percent of total CO2, receiving 2 percent of emission allowances.
A Senate bill introduced in September carries a goal of a 20-percent reduction in CO2 by 2020.
"This is a top priority for the Obama administration and Congress, just below health care and financial market reform," Wright said, noting the Energy Information Administration estimates such legislation would push the retail price of gasoline and diesel to $5 a gallon.
"The House and Senate bills will unfairly penalize consumers and businesses, especially folks living in rural areas, such as farmers and ranchers, who rely on petroleum to meet the basic functions of life: working, shopping, seeking medical care and education," Wright said.
All of this legislative activity is leading up to international climate talks in Copenhagen in December, Write noted.
Oil Prices
In the area of the oil futures trading, representatives of PMAA and the New England Fuel Institute (NEFI) testified on the topic on the Hill and at U.S. Commodities Future Trading Commission (CFTC)16 times since early last year, calling for legislation that would tighten oversight of commodities trading, Cabrera said. PMAA and ENFI have built the Commodities Market Oversight Coalition, now with more than 100 organizations working to communicate the need for reform. PMAA was the first national oil industry association to endorse Gary Gensler as the new CFTC chairman.
"As crude oil surged, trade volume outstripped physical demand tenfold," Cabrera said, adding PMAA members began noticing day-to-day price volatility in early 2000. "We noticed price was not about supply and demand. We do not need one entity buying up huge amounts and artificially raising the price of oil."
The association is working for legislation that would require standardized over-the-counter derivatives to be centrally cleared by an organization regulated by CFTC or the Securities Exchange Commission; close all loopholes and require the 50 largest traders of oil contracts to report to regulators all of their oil reserves; and require some oil traders to divulge reserves held in offshore tankers, which would provide transparency and prevent traders from artificially driving up prices.
As part of the Merchant Payment Coalition, PMAA also is lobbying for legislation that would tackle the issue of high credit card interchange fees.
"When the price of gasoline reached and topped $4 a gallon, our retail members saw the credit card companies make more per gallon sold than they did," Wright said, noting the credit card industry collected $48 billion in interchange fees last year, up from $42 billion in 2007.
Happy with the progress convenience store retailers have made in educating Congress on the topic, PMAA expects to see some legislative action on the issue later this year. Sen. Chris Dodd, the Senate Banking Committee chair, has said he will take up the issue later this year.
"We want language that would allow retailers to negotiate their fees," he said, adding studies show 15 percent of interchange fees paid by retailers cover the costs of processing the payments; the other 85 percent of fees are used for credit card company's direct marketing expenses.
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Speaking at Telvent DTN's Government Affairs Recap webinar yesterday, PMAA Manager of Regulatory Affairs and Communications Brandon Wright and Vice President Sherry Cabrera said the association was making headway and educating lawmakers on these three issues, which directly affect the way motor fuels are sold.
Climate Change
In the area of global climate change, the Environmental Protection Agency (EPA) favors a cap-and-trade program to limit the amount of greenhouse gas emissions coming from the transportation fuels and other industries, targeting companies that emit the highest levels of CO2. Under a cap-and-trade approach, a national inventory of current greenhouse gas emissions would be taken to establish an emission baseline, according to PMAA. After the baseline is known, a cap on emissions will be established somewhere below the current baseline so that emitters will be forced to purchase credits from the EPA to exceed the cap.
In June, the House of Representatives passed the American Clean Energy and Security Act, with just one vote more than the 218 needed to pass, which is intended to decrease CO2 emissions 17 percent by 2020. It also establishes a cap-and-trade program with the petroleum industry, which PMAA said emits 44 percent of total CO2, receiving 2 percent of emission allowances.
A Senate bill introduced in September carries a goal of a 20-percent reduction in CO2 by 2020.
"This is a top priority for the Obama administration and Congress, just below health care and financial market reform," Wright said, noting the Energy Information Administration estimates such legislation would push the retail price of gasoline and diesel to $5 a gallon.
"The House and Senate bills will unfairly penalize consumers and businesses, especially folks living in rural areas, such as farmers and ranchers, who rely on petroleum to meet the basic functions of life: working, shopping, seeking medical care and education," Wright said.
All of this legislative activity is leading up to international climate talks in Copenhagen in December, Write noted.
Oil Prices
In the area of the oil futures trading, representatives of PMAA and the New England Fuel Institute (NEFI) testified on the topic on the Hill and at U.S. Commodities Future Trading Commission (CFTC)16 times since early last year, calling for legislation that would tighten oversight of commodities trading, Cabrera said. PMAA and ENFI have built the Commodities Market Oversight Coalition, now with more than 100 organizations working to communicate the need for reform. PMAA was the first national oil industry association to endorse Gary Gensler as the new CFTC chairman.
"As crude oil surged, trade volume outstripped physical demand tenfold," Cabrera said, adding PMAA members began noticing day-to-day price volatility in early 2000. "We noticed price was not about supply and demand. We do not need one entity buying up huge amounts and artificially raising the price of oil."
The association is working for legislation that would require standardized over-the-counter derivatives to be centrally cleared by an organization regulated by CFTC or the Securities Exchange Commission; close all loopholes and require the 50 largest traders of oil contracts to report to regulators all of their oil reserves; and require some oil traders to divulge reserves held in offshore tankers, which would provide transparency and prevent traders from artificially driving up prices.
As part of the Merchant Payment Coalition, PMAA also is lobbying for legislation that would tackle the issue of high credit card interchange fees.
"When the price of gasoline reached and topped $4 a gallon, our retail members saw the credit card companies make more per gallon sold than they did," Wright said, noting the credit card industry collected $48 billion in interchange fees last year, up from $42 billion in 2007.
Happy with the progress convenience store retailers have made in educating Congress on the topic, PMAA expects to see some legislative action on the issue later this year. Sen. Chris Dodd, the Senate Banking Committee chair, has said he will take up the issue later this year.
"We want language that would allow retailers to negotiate their fees," he said, adding studies show 15 percent of interchange fees paid by retailers cover the costs of processing the payments; the other 85 percent of fees are used for credit card company's direct marketing expenses.
Related News:
ExxonMobil CEO Outlines Energy Solutions
Valero Pumps Up Cap-and-Trade Debate
Lawmakers to Debate Credit Card Fees