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By Barbara Grondin Francella
High gasoline prices, the recessionary economy, food price inflation, energy independence -- the issues shaping this year's presidential election have never hit closer to home for convenience store operators.
With polls showing Sens. Barack Obama and John McCain in a near dead heat going into the Nov. 4 election, Convenience Store News took time to ask a few industry players who know their way around a politician or two, what a President Obama or President McCain -- and an expected Democratic-controlled Congress -- will mean to the c-store/gasoline industry. Taking time to discuss the most pressing industry issues were Dan Gilligan, president of the Petroleum Marketers Association of America; John Eichberger, vice president, government affairs, for NACS: the Association of Convenience and Petroleum Retailing; David McCorkle, president of the Pennsylvania Food Merchants Association and Pennsylvania Convenience Store Council; and Tom Robinson, president of Robinson Oil Corp., operator of 34 Rotten Robbie stores, based in San Jose, Calif. McCorkle and Robinson also serve on NACS' Legislative Committee.
All agreed, after the last eight years, the old adage that a Republican in office is better for business than a Democrat may no longer hold true.
"It depends on the issue," Eichberger said. "On some, President George W. Bush has been much better than either Kerry or Gore would have been. On other issues, he's been absent."
Eichberger believes the Republicans lost the majority in Congress because they became big spenders. "In some cases, they were so focused on big business, they were hurting small-business," he said. "When the Democrats came in, at least we knew who our enemies were. But on some issues, we knew they had a small business perspective. We could divorce ourselves from Big Oil and make it clear to them who convenience store/gas retailers are. That's how we cut a deal on price-gouging legislation, for instance."
Americans will demand whomever takes the oath of office in January to deal with the problems plaguing our economy, Gilligan said. "But either Obama or McCain will have a hard time finding the money needed to fund programs and initiatives, and increasing taxes is not thought to help an ailing economy. I'm not sure either one will be able to make many dramatic changes and implement policies he might want to."
Here, in CSNews' take on the Sunday morning talking head shows, the industry foursome weigh in on the election and what its outcome may mean for the c-store industry.
CSNews: First, does anyone want to predict who the new president will be?
Gilligan: I think it will be very, very close. But as we've learned in politics, many things can happen between now and Election Day. The Democrats will control the House and Senate. Congress has an enormous inherited challenge, and in many ways, it doesn't matter if Obama or McCain is elected, though one of them will set the tone for what happens. A president's influence is in tone and veto power.
CSNews: Who would be better for the convenience store industry, Obama or McCain?
Gilligan: I couldn't say now. Retailers have benefited from tax changes made early in the Bush administration and will suffer if those rates are increased as a result of an administration change. But both candidates present advantages and disadvantages to the industry.
Eichberger: On certain issues, Obama and congressional Democrats may have a more sympathetic ear. But on issues like the Food and Drug Administration's control of tobacco sales, both candidates are bad for us.
On environmental issues -- carbon controls and global warming -- neither will be good for the petroleum industry. On energy policy, I think McCain will be overall better, being more open to crude oil production, which may offset some of the pain of carbon controls. Obama will be more for alternative fuels. McCain is not so gung-ho on ethanol.
Also, for the most part, retailers don't want a federal health insurance program, which is part of the Obama platform. They'd rather band together to buy into a group health plan.
Robinson: I wish when the media talked about liberals and conservatives they'd take it one step further and classify them as social or economic conservatives or liberals. I think the majority of small business owners and executives tend to have values that line up with economic conservatives, who tend to be more Republican. But often, economic conservatives don't help an industry fix a problem. In many instances, if we have a grievance that requires some government intervention, for example credit card legislation, it is easier to make the argument to the Democrats in Congress, who tend to have the opinion that government should be more involved in the economy, than Republicans, who tend to believe the economy is better if government is not involved.
CSNews: How successful would McCain be with his agenda if he has to deal with a Democratic-controlled Congress?
Gilligan: He'll make far more headway than Bush did. I think he'd be effective reaching accommodations with Democrats. But the next Congress and president are inheriting such a difficult time, what they can do will be very limited. Whoever is elected will have to set broad goals and work it that way.
McCorkle: The question is how large will the majority be in Congress?
McCain opposes a federal minimum wage, while a President Obama would have a willing Congress to make substantial changes in minimum wage, indexing it to inflation. A Democratic majority House also will be able to push hard for [a stronger] Federal Family Leave Act, healthcare reform and workforce development.
Eichberger: McCain would not be able to get his initiatives through the same way as Obama would. But if it was a Republican-controlled Congress, he may not get initiatives through either! He's not well liked by some Congressmen in his party. He's a maverick.
If Obama is elected, he will try to get something done so that in 2010, voters may increase the majority and then he can push a more aggressive agenda in 2011 and 2012.
Robinson: It seems to me neither party behaves themselves very well when they are the majority. My preference is to have a president of one party and a legislature of a different party. It requires more compromise.
CSNews: How would each candidate deal with the list of factors reshaping gas retailing: high prices and a recessionary economy, global warming concerns, alternative fuels, the war in Iraq and other supply concerns and credit card fees?
Gilligan: Next to the economy, I think the price of gas is the No. 1 issue. Quite frankly, I'm disappointed in both Republicans and Democrats. There is too much partisan finger-pointing going on. We need to get beyond the blame game and start addressing the issue.
[PMAA] is supporting a bill to reduce excessive speculation in futures markets, but fighting Wall Street is tough.
I simply tell retailers to plan for gas prices to be high and build it into their business model. Plan on smaller volumes, no matter who is president. U.S. supply and demand don't always drive the price of energy as they did in years past.
Eighty-five percent of all U.S. transportation fuels involve oil. It is predicted by 2028, 85 percent of transportation fuels will be oil-based, exactly where we are today. We may expand other alternative fuels, but we will be dealing with substantial investments in oil production and refining needs for the foreseeable future.
In terms of climate-related issues, I think the candidates have similar perspectives. I'm a big supporter of biofuels, but we have already seen the adverse impact of ethanol. Both candidates have ambitious climate-change ideas, but considering current gas prices, asking consumers to pay 50 cents a gallon more to hopefully reduce global warming will be a very tough sell. This will be especially true if China and India continue to increase gas consumption while the U.S. is forced to cut back.
McCorkle: Whoever is elected will potentially have a great impact on the motor fuels industry, especially as it relates to international relations. There are a number of places in the world where a bottleneck or breakdown in getting petroleum products to refiners would have a tremendous impact on economies worldwide.
McCain's opposition to providing taxpayer subsidies for corn-based ethanol production and his plan to end tariffs on imported Brazilian ethanol, sugar and other commodities make sound economic sense. Obama's support for cellulosic ethanol could be good, if a cost effective production method can be developed. As for biodiesel, there probably won't be enough to make a big difference in the energy world.
Both candidates are seeking energy independence, but both need to clarify their positions on how they plan to reach those objectives before this industry can support them.
Robinson: It seems politicians either have a supply solution or a demand solution. I think you need both. The next president can't just do something to 'send a message.' He has to do something that works.
CSNews: How much influence will Obama or McCain have on the economy?
Eichberger: When it comes to consumer confidence, how the country is feeling after the election, and how that impacts how people spend, I don't know. You have two polar opposites as candidates.
I think the population is asking for change and doesn't care what the change is. The everyday consumer might be a little more 'Happy days are here again!' after the election, but we will need to see a fundamental shift in economic performance. People blame the president for the economy, but the president doesn't have a lot to do with it.
CSNews: Is there any change or policy being espoused by either candidate that could greatly impact the c-store industry?
Robinson: Competition in our industry is local. If there is a law I have to comply with, I know the retailer down the street has to comply with it as well. Although I care about who wins the presidency and what law is passed, I take the "I don't care who wins" attitude. I care about regulation of my industry. But if it is something that won't put me out of business, and it affects the industry equally, I have an even playing field, and I try to deal with it better than the competitor down the road.