PHILADELPHIA -- For the more than 500 attendees of the Society of Independent Gasoline Marketers Association's (SIGMA) annual meeting, taking place October 21-23, the aftermath of Hurricanes Katrina and Rita and the political push to boost refining capacity were top of mind.
With refining capacity not expected to be back at pre-storm levels until early next year, marketers commiserated on what has been a very tough supply situation these past few months. Marketers shared horror stories of fuel trucks being confiscated by federal emergency personnel and [image-nocss] having to hire police escorts for fuel deliveries all the while dealing with significant damage to their own locations.
The disasters and the resulting price spikes sparked activity on Capital Hill to open up any of the current bottlenecks to increased refining capacity. At the legislative committee meeting, SIGMA counsels Tim Columbus and Greg Scott discussed three bills up before the House and Senate that aim to expand supply partly by limiting the number of boutique fuels.
It was a concept the association was not comfortable endorsing up until the Saturday committee meeting; although SIGMA supported a stop in the proliferation of boutique fuels, it was not sure how this would affect domestic refining capacity and whether it would open up the field to increased imports from foreign refiners now able to meet fewer fuel specs.
It also was receiving mixed messages from the supply community. The refiners have been schizophrenic about this, said Columbus, observing that the major suppliers have not sent a consistent signal on whether or not trimming the boutique fuel roster would indeed help.
Two Senate bills and one House bill are pending in attempts to consolidate the number of boutique fuels, either by winnowing down the total number of fuels to five or six (not including California), or by deleting a state fuel requirement if it is identical to a federal fuel requirement. One bill, S. 1859, seemed to offer the best of both worlds, including limiting the number of fuels in the federal fuel list to five.
Outside of California, there would be one federal diesel fuel. One conventional gasoline for ozone attainment areas. One federal reformulated gasoline. Two Reid vapor-pressure-(RVP) controlled conventional gasolines.One board member, Mike Coulson, president of Coulson Oil Co., Little Rock, Ark., cut the debate short. We've been asking for this stuff for 13 years, he argued. [Senate bill] 1859 is what we ought to endorse and take our chances. The motion passed unanimously.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.