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Issue #1908 February 27,2017

Minnesota Petroleum Marketer

Issue #1908 February 27, 2017 Inside this Issue:

MINNESOTA PETROLEUM MARKETERS ASSOCIATION

3244 RICE STREET ST. PAUL, MN 55126-3047

651/484-7227 800/864-3813 FAX 651/484-9189

Kevin Thoma—Editor E-Mail: [email protected]

www.mpmaonline.com

The Minnesota Petroleum Marketer (ISSN 1062-8282) is published semi-monthly by the Northwest Petroleum Association dba Minnesota Petroleum Marketers Association. Subscription cost $25.00 per year. POSTMASTER: Send address changes to Minnesota Petroleum Marketer at address above.

Annual Tier II Reporting 2

PMAA Update 3-4

Interesting 4

Short-Term Energy Outlook 5

Food Managers Training 6

Legal Corner 7

Insurance Corner 8

Classifieds 9

Convention Form 10

Bulletin No. 1908 -2- February 27, 2017

ANNUAL TIER II REPORTING

ANNUAL EPCRA TIER II REPORTS DUE BY MARCH 1, 2017 EPA EPCRA Tier II reports must be filed for bulk plants, marinas and fleet fueling facilities and select retail gasoline fa-cilities that stored more than 10,000 pounds (minimum 1,626 gallons) of hazardous chemicals (petroleum fuels) at any single time during the 2016 calendar year. EPCRA 2016 reports must be filed with state emergency response au-thorities no later than March 1, 2017. Retail gasoline facilities with a storage capacity greater than 75,000 gallons of gasoline and/or 100,000 gallons or more of diesel fuel must also file EPCRA reports. Federal regulations exempt retail fueling facilities at or below these product capacity thresholds from the annual Tier II inventory reporting. EPCRA PAPER FORMS AND ELECTRONIC SUBMISSION SOFTWARE:

EPCRA Tier II forms for paper filing may be downloaded here: EPCRA Forms. IMPORTANT! Many states now require EPCRA reports be filed electronically and have adopted the EPA’s

Tier2 Submit electronic filing portal. Tier2 Submit electronic filing for Windows and MacIntosh applications may be downloaded here: EPCRA Electronic Filing.

An electronic filing tutorial may be downloaded here: Electronic Filing Tutorial. A complete list of state EPCRA Tier II requirements and procedures can be downloaded here: State EPCRA

Requirements.

EPCRA CAS NUMBERS: The following CAS designations (from material safety data sheets) must also be included on EPCRA Tier II re-

ports; o Gasoline (CAS 8006-61-9); o Diesel Fuel (CAS 68476-34-6); o Kerosene (CAS 8008-20-6); o Fuel Oil (CAS 68476-30-2); o Aviation Gasoline (CAS Mixture); o Jet A (CAS Mixture); o JP 8 (CAS Mixture).

EPCRA NAICS CODE:

Standard Industrial Classification (SIC) codes can no longer be used to describe facilities on EPCRA Tier II re-ports. Instead, North American Industrial Classification System (NAICS) codes must be used. Applicable NAICS codes for the petroleum marketing industry include:

o Petroleum Bulk plants - NAICS 424710 o Heating Oil Dealers - NAICS 454311 o Retail Gasoline Stations with Convenience Stores - NAICS 447110 o Retail Gasoline Stations without Convenience Stores - NAICS 447190

Cardlock Sites – NAICS 447190.

PENALTY FOR FAILURE TO FILE EPCRA TIER II: The EPA fine for violating EPCRA Tier II reporting is $37,500 per day, per violation. EPA checks for filing of EP-

CA Tier II reports during routine compliance audits or after a release has occurred.

RECENT ADDITIONS TO TIER II FORM: EPCRA Tier II forms now ask whether the facility is subject to emergency planning under Section 302 of

EPCRA (Toxic Release Inventory or TRI) or the chemical accident prevention requirements under 112r of the Clean Air Act (Risk Management Program or RMP). Typically, petroleum bulk plants operated by petroleum marketers located downstream of the terminal rack are NOT subject to TRI or RMP.

This year, a new standard may apply to propane bulk plants. The Chemical Facility Anti-Terrorism Standards (CFATS) Apply to propane bulk plants where more than 60,000 pounds of propane is stored. If CFATS does apply to your pro-pane storage, you have 60 days to submit an online risk assessment known as a Top-Screen Questionnaire. For more information go to www.dhs.gov/csat-top-screen.


PMAA UPDATE

PMAA URGES PHMSA TO REINSTATE RULE ALLOWING PLACARDING TO THE LOWEST FLASHPOINT This week, PMAA filed comments asking the Pipeline Hazardous Material and Safety Administration (PHMSA) to restore a recently removed cargo tank placarding provision important to petroleum marketers. Specifically, the provision allowed marketers to permanently attach a UN 1203 placard to cargo tanks for alternating loads of diesel fuel and gasoline rather than having to continually change placards between runs. The 1203 placarding provision stood for 35 years until PHMSA issued an interpretive letter in 2015 that limited permanent 1203 placards to straight loads of gasoline or split loads of gasoline and diesel fuel stored in separate compartments of the same load. In November 2015, PMAA petitioned the agency to undertake a rulemaking to restore the ability to placard to 1203 provision. Unfortunately, PHMSA failed to act on the petition for over a year until PMAA successfully lobbied Congress for legisla-tion requiring the agency to initiate a rulemaking within 90 days. PHMSA expressed concerns in its 2015 interpretive let-ter for the safety of emergency responders because gasoline with ethanol blends over 10 percent required a different placard and emergency response procedures than E10 blends. PMAA told PHMSA in written comments that placarding alternating straight loads of diesel fuel and gasoline with the UN 1203 placard does not pose any danger to public safety because emergency response methods for both are identical under Emergency Response Guide 128. PMAA also ex-plained that mid-level ethanol grades are blended at the pump and not typically transported in cargo tank trucks so there was no need to remove the 1203 placarding provision based on concerns over alcohol content. PMAA told PHMSA it supports limiting the 1203 placarding provision to a maximum E10 blend to neutralize concerns over mid-level ethanol blends. PMAA plans to meet with PHMSA on this issue in the near future. PMAA SUBMITS COMMENTS ON PETITION TO MOVE RFS OBLIGATED PARTY STATUS PMAA submitted comments this week on a petition for rulemaking that would move obligated party status under the RFS program from refiners and importers to position holders at the terminal rack. Blenders below the rack would not be af-fected by the proposed move in obligated party status. Valero filed the petition to move the point of obligation due to the increasing economic burden placed on obligated parties (currently refiners and importers) from high RIN values. Please note that any regulatory action that follows as a result of a petition for rulemaking would still need to go through the for-mal notice and comment period rulemaking requirements. In other words, even if EPA grants the petition for rulemaking, moving the point of obligation to the position holder will still need to go through the formal rulemaking process, and therefore, PMAA will have another chance to comment on the proposal. PMAA has long supported identifying refiners and importers of gasoline and diesel fuel as the entities responsible for complying with annual volumetric blending obligations mandated under the RFS. PMAA recently reiterated its support for keeping the point of obligation with refiners and importers in a joint industry letter sent to EPA Administrator Gina McCar-thy in November 2016. However, on Wednesday, PMAA told the EPA in written comments of its growing concern that keeping the point of obli-gation with refiners and importers may be creating downstream market conditions that prevent small business retailers from competing on a level playing field with their larger unbranded competitors. Go to http://smallretailerscoalition.com/ for a video explaining why moving the point of obligation to the position holder at the rack will benefit petroleum market-ers. Go to http://energytomorrow.org/blog/2017/02/16/shifting-rfs-responsibility-could-impact for arguments against mov-ing the point of obligation to the position holder at the rack. PMAA believes that inflated value of Renewable Identification Numbers (RINS) due to annual increases in the renewable fuel obligation is driving much of the downstream market dis-tortion. Still, PMAA said it was not entirely convinced that moving the point of obligation to position holders would solve the inequities that are manifest under the current RFS regulatory framework. Consequently, PMAA told the EPA it has decided to take a neutral position on where the point of obligation should be set under the RFS. PMAA will continue to review this issue at our Washington, DC Conference, May 17-19th. PMAA will also continue to pursue a cap on the maximum amount of ethanol blended into gasoline at 9.7 percent. PMAA believes that capping the ethanol mandate at this level is the most effective way to lower the value of RINS and, in turn, allow small business retailers to compete on a level playing field.


PMAA UPDATE CONT’D PMAA WESTERN REGION CHAIR REPRESENTS PMAA AT NATIONAL ETHANOL CONFERENCE IN SAN DIEGO On Tuesday, California PMAA Director and Western Region Chair Jimm Cross of Cross Petroleum represented PMAA at the 2017 National Ethanol Conference in San Diego, CA. Jimm was part of a panel which included Ryan McNutt, CEO, SIGMA; John Eichberger, Executive Director, Fuels Institute and Rick Long, General Manager & Associate General Counsel, PEI. During his presentation, Jimm stated that PMAA supports the use of ethanol in our nation’s fuel supply but has concerns with the diffi-culty/inability to certify existing retail infrastructure compatibility with blends above E10. He also argued on behalf of petroleum market-ers that believe the ethanol mandate is set too high and that there are concerns with UST compatibility issues and the costs associat-ed with retrofitting current UST sites. He added that the inability to recertify existing equipment is an impediment to E15 because fed-eral, state, and local laws and regulations, national and international fire codes, as well as all commercial insurance policies, require the use of Underwriters Laboratories (UL) certified storage and dispensing equipment or specific documentation proving the equip-ment is compatible. He also added that PMAA supported a bill last year known as “The Food and Fuel Consumer Protection Act” which caps the max amount of ethanol blended into the gasoline supply at 9.7 percent. Reducing the ethanol mandate will reduce RIN values which will level the playing field in the retail motor fuels marketplace. Passage of the bill will allow marketers to support ethanol use while not jeopardizing their businesses. On behalf of PMAA and petroleum marketers across the country, we thank Jimm for his outstanding representation. MNUCHIN SAYS TAX REFORM WILL CONCLUDE BY AUGUST Yesterday, Treasury Secretary Steve Mnuchin said that he wants to see very significant tax reform passed before Congress' August recess. However, Congress is working through a complex agenda and many of the primary tax policy writers believe the House will not complete a bill until next year. President Trump has promised to detail a tax plan in the coming weeks. He has not stated whether it is a version of his proposal out-lined during the campaign or if it will resemble the House Republicans' plan. Secretary Mnuchin said the Trump administration is "primarily focused on a middle-income tax cut and a simplification for business” which he said is “key to boosting economic growth to 3% annually or higher.” He also stated that the administration has looked at the border adjustment tax and is aware of some of the concerns with it. The border adjustment tax is a key provision of the House Republican tax plan which would tax imports and eliminate the tax on exports. Throughout the tax reform debate, PMAA will continue to weigh in on provisions that are particularly important to petroleum marketers such as the estate tax and LIFO. PMAA is still reviewing the border adjustment tax and will have additional information at a later date on how it will impact petroleum marketers.

Bill to jumpstart Minnesota shrimp industry passes first committee stop By District 22 Sen. Bill Weber, R-Luverne on Feb 21, 2017 at 10:33 p.m. Earning bipartisan support from the Senate Agriculture, Rural Development, and Housing Committee. The bill, Senate File 841, which I authored, creates a $5 million incentive program for Minnesota companies that produce over 25,000 pounds of shrimp each quarter. About 80 percent of shrimp consumed in the United States is produced abroad, but the thirst for domestic production exists. I am hopeful this legislation will allow shrimp producers already operating in Minnesota to expand, while luring new development and en-couraging shrimp production in our state. The legislation comes on the heels of an announcement that truShrimp, a subsidiary of southwestern Minnesota-based Ralco, will invest $54 million in the construction of a shrimp production facility near Balaton. A University of Minnesota study estimates that, in addition to supporting over 120 jobs, the single facility is estimated to generate $23 million annually for the region’s economy. Following its committee hearing, the bill will head to the Agriculture, Rural Development, and Housing Finance Committee for further consideration. Its House companion has not yet had a committee hearing. The economic impact that shrimp production could have on our region is limitless. I believe we are positioning ourselves to be at the forefront of an industry that has the potential for explosive growth, not only in Senate District 22, but in all of Minnesota. I commend truShrimp and its parent company, Ralco, for their commitment to their home area and state.

INTERESTING


SHORT-TERM ENERGY OUTLOOK Global liquid fuels

· Implied global petroleum and liquid fuels inventories are estimated to have increased by 0.8 million barrels per day (b/d) in 2016. EIA expects the oil market to be relatively balanced in 2017 and 2018, with inventory draws averaging 0.1 million b/d in 2017 and builds averaging 0.2 million b/d in 2018. The revised forecast, which reduces average inventory builds from last month’s out-look, resulted from changes to estimates of historical global liquid fuels consumption that created a higher base for consumption during recent years and the forecast period.

· U.S. crude oil production averaged an estimated 8.9 million b/d in 2016. U.S crude oil production is forecast to average 9.0 mil-lion b/d in 2017 and 9.5 million b/d in 2018.

· Benchmark North Sea Brent crude oil spot prices averaged $55/barrel (b) in January, a $1/b increase from December. This price was $24/b higher than the January 2016 average, and it was the highest monthly average for Brent spot prices since July 2015.

· EIA forecasts Brent crude oil prices to average $55/b in 2017 and $57/b in 2018. West Texas Intermediate (WTI) crude oil prices are forecast to average about $1/b less than Brent prices in 2017. The NYMEX contract values for April 2017 delivery traded dur-ing the five-day period ending February 2 suggest that a range from $45/b to $65/b encompasses the market expectation of WTI prices in April 2017 at the 95% confidence level.

· U.S. regular gasoline retail prices are expected to decrease from an average of $2.35/gallon (gal) in January 2017 to an average of $2.27/gal in February and then rise to $2.33/gal in March. U.S. regular gasoline retail prices are forecast to average $2.39/gal in 2017 and $2.44/gal in 2018.

Natural gas · U.S. dry natural gas production is forecast to average 73.7 billion cubic feet per day (Bcf/d) in 2017, a 1.3 Bcf/d increase from the 2016 level. This increase reverses a 2016 production decline, which was the first decline since 2005. Natural gas production in 2018 is forecast to increase by an average of 4.1 Bcf/d from the 2017 level.

· In January, average Henry Hub natural gas spot prices fell by 29 cents per million British thermal units (MMBtu) from December levels to $3.30/MMBtu. Mild January temperatures, which were the warmest since 2006, contributed to lower prices.

· Increasing capacity for natural gas-fired electric generation, growing domestic natural gas consumption, and new export capabili-ties contribute to the forecast Henry Hub natural gas spot price rising from an average of $3.43/MMBtu in 2017 to $3.70/MMBtu in 2018. NYMEX contract values for April 2017 delivery traded during the five-day period ending February 2 suggest that a price range from $2.42/MMBtu to $4.38/MMBtu encompasses the market expectation of Henry Hub natural gas prices in April 2017 at the 95% confidence level.

Electricity, coal, renewables, and emissions · Total U.S. electricity generation from utility-scale plants averaged 11,150 gigawatthours per day in 2016. Forecast U.S. genera-tion declines by 0.1% in 2017, then grows by 1.5% in 2018.

· EIA expects the share of U.S. total utility-scale electricity generation from natural gas will fall from 34% last year to an average of 32% in 2017 as a result of higher expected natural gas prices. The forecast natural gas share is forecast to rise slightly to 33% in 2018. Coal’s generation share rises from 30% in 2016 to average 31% in both 2017 and 2018. Nonhydropower renewables are forecast to provide 9% of electricity generation in 2017 and 10% in 2018. The generation share of hydropower is forecast to be relatively unchanged from 2017 to 2018, and the nuclear share declines slightly in 2018.

· The U.S. residential electricity price averaged 12.3 cents per kilowatthour (kWh) in January 2017 and is expected to average 12.5 cents/kWh in the first quarter of 2017. EIA expects the annual average U.S. residential electricity price to increase by 3.0% in 2017 and by 2.4% in 2018.

· U.S. coal production is estimated to have declined by 158 million short tons (MMst) (18%) in 2016 to 739 MMst, which would be the lowest level since 1978. EIA expects growth in coal-fired electricity generation to contribute to a 3% increase in coal production in 2017. Coal production is expect to increase by 1% in 2018.

· Coal exports in November 2016 totaled 6.6 MMst, which was 35% higher than in October and 39% higher than coal exports in November 2015. Despite the monthly and year-over-year increases, EIA estimates that U.S. coal exports declined by 20% in 2016 to 59 MMst, the lowest level since 2009. Exports are expected to average 51 MMst in 2017 and 50 MMst in 2018.

· After declining by 1.7% in 2016, energy-related carbon dioxide (CO2) emissions are projected to increase by 0.3% in 2017 and by 1.4% in 2018. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, and energy prices.

2017 Certified Food Manager & Recertification Training

Sponsored by SafeFoodTraining

Department of Health & Agriculture approved

· Certified Food Manager Course & Exam $165 8:29 a.m. to 4:29 p.m. · Recertification Course $75 8:29 a.m to 12:29 p.m. · Online Certified Food Manager Course & Exam $175 Exam at 2:15 p.m. · Online Food Manager Recertification Course $75

Register online at: www.safefoodtraining.com NEW Mail in Registration address Mail form & payment to: SafeFoodTraining, 7469 Fernbrook Lane Maple Grove, MN 55311. Questions: email us at [email protected] or call Tim at 952-210-0195. Please copy form as needed MPMD Feb 2017 Course Date & Location _______________________________________ Amount enclosed _______ Name _____________________________________________________ Certification/ Renewal Business name __________________________ Address _____________________________________ City_______________________________ State ____ Zip ________ Phone # ______________________


CERTIFIED FOOD MANAGERS TRAINING AND RECERTIFICATION

March 1 –Wed. - Bloomington LaQuinta Inn 2 – Thurs. – St. Cloud, Holiday Inn 7 – Tues. – Plymouth, Green Mill

9 – Thurs.- Woodbury Country Inn 13 – Mon. – - Minneapolis Sheraton Midtown 15 – Wed. – Burnsville, Best Western Premier

28– Tues. - Mounds View, Mermaid Event Center 30– Thurs. – Chanhassen, AmericInn

April

3 –Mon. - Bloomington LaQuinta Inn 4– Tues. – Otsego/Elk River Holiday Inn

6 – Thurs.- Plymouth, Comfort Inn 11– Tues. – Woodbury Country Inn 18 – Tues. – Minneapolis Aloft Hotel

19– Wed. – Burnsville, Best Western Premier 25–Tues. – Roseville Country Inn

25 - Tues –Detroit Lakes Holiday Inn 26–Wed. – Chanhassen, AmericInn

May

2 – Tues. – Bloomington LaQuinta Inn 3– Wed. – St. Cloud, Holiday Inn

9 – Tues. – Woodbury Country Inn 10 –Wed. – Plymouth, Comfort Inn

15– Mon. - Minneapolis Aloft Hotel 18 – Thurs. - Burnsville, Best Western Premier

23– Tues. - Mounds View, Mermaid Event Center 24– Wed. – Chanhassen, AmericInn

31 – Wed. – Otsego/Elk River Holiday Inn

June 1 –Thurs. - Bloomington LaQuinta Inn

6 – Tues. – Woodbury Country Inn 7 – Wed.- Plymouth, Comfort Inn

13 – Tues. – Minneapolis Aloft Hotel


LEGAL CORNER

Loss of Access and What it Means to Your Business By Tami Diehm and Jim Dierking, Winthrop & Weinstine Every summer, road projects throughout the state affect hundreds of roads and cause headaches for all of us – slow traffic, detours, an exit is temporarily closed. We have all accepted the fact that these inconveniences are a part of life in Minnesota – besides winter, it’s our “other season.” But what if the temporary inconven-ience of a road project turns into a permanent change in the access road that leads to your business? What if, instead of three months of bright orange signs directing customers to your gas pumps, traffic is permanently rerouted away from your business? Unfortunately, this scenario becomes reality for business owners throughout the state every year. But, what can you do? “Eminent domain” is the power that the government has to take or condemn property for “public use,” without the landowner’s consent. While you have the right to challenge the government’s de-cision to take your property, as long as the property is needed for a public purpose, such as a road, these challenges are rarely successful. However, regardless of whether you challenge the taking itself, you are en-titled to compensation for the property interests that you have lost. Damages can include not only the fair market value of the land that was taken, but also costs to relocate your business and sometimes even damag-es due to change in access. In many cases, property owners can also be reimbursed for legal fees and the costs of appraisals. While the procedures for a straight forward condemnation action are well settled, at times disagreements arise over whether a property owner is entitled to payment, and how much that payment should be. It be-comes more complicated when no physical property is taken from the business, but the access roads are re-routed so significantly that the business suffers as a result. We all know that traffic generates revenue for gas and convenience stores and a permanent change in traffic patterns can have a devastating effect on these types of businesses. The law in this area is not only confusing, but it is also inconsistently applied. In many cases, business owners are not compensated for changes in roadways that affect access to their property but are not immediately adjacent to their property. In these instances, a property owner can bring legal action to force the government to consider compensation. In these lawsuits, the property owner has the burden of proving that (1) the government’s action is a “taking” under the law and (2) the effect of the taking on the business is substantial and detrimental. This winter, the Association has had the opportunity to support gas and convenience store owners who have suffered signifi-cant loss in revenue due to access changes, including those of the type described above. While the Associa-tion is not a party to any of the law suits, it has provided the court with valuable information about the devas-tating impact that changes in access can have on gas and convenience stores in general. By doing so, the Association has tried to provide the court with expertise and evidence that the court may not otherwise have available, which allows the Association to take an active role to protect the rights of all of its members. Even for members who have not faced this issue, it is clear that access is universally important.


INSURANCE CORNER


CLASSIFIEDS

NOTE: Classified ads are accepted on a first come, first serve basis. The cost is $3.00 a line for non-members. The Association office does not look into nor endorse the products and services offered through the Newsletter ads. FOR SALE: 1999 chev c7500 propane delivery bobtail, 3126 cat, 6 speed, ac, 277,000 mi, 3000 gal Westmor tank, VK-Apr 16, hydro-2015, very nice condition, ask-ing $19,950 obo, call Shane, 701-238-1281 FOR SALE: C-Store equipment for sale. We have equipment from a store closure that must go. Shelving, displays, signage, warmers, fryers, breading table, coffee equipment, etc. Call Josh for details at 507-452-4743 FOR SALE: Convenience Store located at the intersection of Hwy’s 59 & 67 in Clark-field. Many updates inside and out including complete store remodel in 2008 with new electrical, plumbing, flooring, siding, etc. LED lighting in cooler & canopy & a steel roof new in July 2014! New walk-in cooler & freezer installed in kitchen in June 2016. Kitchen sells breakfast, lunch and dinner. Also includes 2-6,000 gal. fiberglass tanks, 24-hour pay-at-the-pump, Security camera system, ATM Machine is owned, Propane Exchange program and much more! Environmental work has been completed. In-ventory is NOT included in price. $149,900. Call Jenni Shuler (320) 669-4961 FOR SALE: 2005 Western Star—Mercedes motor, 13 speed, complete records avail-able. $13,200.00 can be seen in Milaca, MN. Call Gary at 1-563-845-9711 WANTED: Representing a buyer looking for a C-store with gas. Seven country met-ro area preferred. Priced under $3m. Contact Scott Schultz, REMAX Results Com-mericial, 952-221-7419, [email protected] with potential properties.

REMINDER—This newsletter is available in an electronic version to be sent directly to your email. If you would like to receive the newsletter electronically, email Holly Werner at [email protected] and request the electronic version of the MPM Marketer.

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