Connecticut lawmakers have until the end of the current legislative session to fix a problem with the state’s underground fuel tank cleanup program, or risk having federal environmental regulators cease recognizing it as a viable alternative to self-insurance for service station owners.

If the federal Environmental Protection Agency withdraws its approval of the state’s Underground Storage Tank Petroleum Clean-Up program, Connecticut gas stations owners would be forced to get their own insurance. And industry officials say if that happens, hundreds of gas stations could go out of business in a relatively short time, a move that could ultimately drive up already high gasoline prices in the state.

“Over 650 stations would go out of business if the state program goes away and the owners are forced to self-insure,” said Michael J. Fox of the Stamford-based trade group Gasoline & Automotive Service Dealers of America. “The remaining stations are going to have to jack up their prices to cover the cost of self-insurance.”

The problem with the program is two-fold: State lawmakers’ continual raiding of the funding source to pay station owners reimbursement for the cleanup of leaking tanks and the resulting backlog in paying those claims.

The Underground Storage Tank Petroleum Clean-Up program board, which is in charge of administering reimbursement payments, has already approved $17 million in reimbursements, said Dennis Schain, a spokesman for the Connecticut Department of Energy and Environmental Protection. The state agency provides support for the cleanup reimbursement program.

But those reimbursements haven’t been paid, because out of $344 million collected last year in gross receipts taxes that motorists paid on gasoline last year, only $250,000 went into the fund, Schain said.

It’s unclear in talking to state lawmakers where the money that was supposed to have gone into the fund last year and in previous years has gone. But Schain said the fund has no reserves to meet the reimbursements already approved or another $81 million in claims that gas station owners have been submitted, but that the board has not yet approved for reimbursement.

The state’s cleanup reimbursement fund is supposed to get its revenue from the gross receipts tax that motorists pay every time they fill up their cars with gasoline. The gross receipts tax places a 7.53 percent levy on wholesale gas prices.

But Fox said money from the tax has been diverted for years.

“There’s money there,” Fox said. “They just need to stop stealing it.”
The funding mechanism for the cleanup reimbursement was created at a time when many of the nation’s largest petroleum companies still owned some of the gas stations around Connecticut, Fox said.

“But the majors have gotten out of retail ownership,” he said. “There’s no deep pockets left here anymore.”

Getting private insurers to issue policies to cover potential fuel leaks at service stations isn’t realistic, he said.

Any station that has experienced a tank leak in the past might not qualify for a policy because the insurer would likely view it as a “pre-existing condition,” Fox said. And if they do qualify for a policy, it will likely be a costly one, he said.

“Our people will lose their businesses,” Fox said.

Schain said DEEP officials are sympathetic to the predicament facing gas station owners.

“There’s an awareness of the complexity of all of this,” he said.

In fact, DEEP officials have known since the summer that EPA is prepared to stop recognizing the reimbursement fund.

James Owens III, director of the Office of Site Remediation and Restoration in the EPA’s Boston office, described the condition of the state’s reimbursement fund as “dire” in a letter he sent to DEEP officials in July 2011.

For now, the strategy state officials have in addressing the EPA’s concerns appears to be a one-year stop gap measure to buy state lawmakers more time to develop a permanent solution in terms of a funding source.
The stop-gap measure has Gov. Dannel P. Malloy calling for the allocation of $5 million in his proposed budget to begin to pay for some of the backlog in cleanup reimbursements. That allocation must be approved by the General Assembly and the state’s Bond Commission.

Schain said that while federal EPA officials haven’t signed off on the state’s strategy, “conversations we have had lead us to believe they will be okay with that.”

Fox acknowledged it is unlikely that state lawmakers will agree not to keep diverting at least some of the gasoline gross receipts money for purposes other than what it was originally intended.

“I’m willing to sit down and work with anybody to reach a mutually agreeable resolution to this, although this is not something that is going to be resolved overnight,” Fox said. “What we will not do is stand for this program going away because a lot of our people will lose their businesses if it does.”

Fox said if the state eliminates the reimbursement fund, his organization will go to court immediately and sue the state.

AMENDED NOTICE OF REASONALBE ANTICIPATION OF IMMINENT ABNORMAL DISRUPTION IN MARKET FOR ENERGY RESOURCS

In light of anticipated impacts of Hurricane Irene on the State of Connecticut, the Attorney General hereby gives notice pursuant to Conn. Gen. Stat. § 42-234(d) of the reasonable anticipation of an imminent abnormal disruption in the market for energy resources. For purposes of this notice, the inception date of the imminent abnormal market disruption is August 26, 2011 at 1:00 pm, and the end date is 5:00 pm on September 6, 2011. The end date of the imminent abnormal market disruption is subject to amendment by further notice. As used herein, “energy resources” and “abnormal market disruption” shall be defined as set forth in Conn. Gen. Stat. § 42-234(a)(1) and § 42-234(a)(3), respectively.

See Conn. Gen. Stat. Conn. Gen. Stat. § 42-234.

(1) “Energy resource” shall include, but not be limited to, middle distillate, residual fuel oil, motor gasoline, propane, aviation gasoline and aviation turbine fuel, natural gas, electricity, coal and coal products, wood fuels and any other resource yielding energy;

(2) “Seller” shall include, but not be limited to, a supplier, wholesaler, distributor or retailer involved in the sale or distribution in this state of an energy resource;

(3) “Abnormal market disruption” refers to any stress to an energy resource market resulting from weather conditions, acts of nature, failure or shortage of a source of energy, strike, civil disorder, war, national or local emergency, oil spill or other extraordinary adverse circumstance;

(4) “Margin” means, for each grade of product sold, the percentage calculated by the following formula: One hundred multiplied by a fraction, the numerator of which is the difference between the sales price per gallon and the product price per gallon and the denominator of which is the product price per gallon. For purposes of this subdivision, “product price per gallon” includes all applicable taxes;

(5) “Notice” means a posting made by the Attorney General pursuant to subsection (d) of this section announcing the inception and end date of any abnormal market disruption or the reasonable anticipation of any imminent abnormal market disruption. (b) No seller during any period of abnormal market disruption or during any period in which an imminent abnormal market disruption is reasonably anticipated shall sell or offer to sell an energy resource for an amount that represents an unconscionably excessive price.

(c) Evidence that (1) the amount charged represents a gross disparity between the price of an energy resource that was the subject of the transaction and the price at which such energy resource was sold or offered for sale by the seller in the usual course of business immediately prior to (A) the onset of an abnormal market disruption, or (B) any period in which an imminent abnormal market disruption is reasonably anticipated, and (2) the amount charged by the seller was not attributable to additional costs incurred by the seller in connection with the sale of such product, shall constitute prima facie evidence that a price is unconscionably excessive. (d) The Attorney General shall post a notice on the home page of the Internet web site of the office of the Attorney General announcing the inception and end date of any abnormal market disruption or the reasonable anticipation of any imminent abnormal market disruption.

(e) Notwithstanding the provisions of subsections (b) and (c) of this section, it shall not be a violation of this section if a seller sells or offers to sell motor gasoline during an abnormal market disruption or any period in which an imminent abnormal market disruption is reasonably anticipated if the seller’s average margin for such motor gasoline during the longer of the following: (1) Any such period of abnormal market disruption or imminent abnormal market disruption, or (2) thirty days following the date notice was provided by the Attorney General pursuant to subsection (d) of this section, is not greater than such seller’s maximum margin on the sale of such motor gasoline during the ninety-day period prior to the onset of the abnormal market disruption or period in which an imminent abnormal market disruption is reasonably anticipated.

(f) This section shall not be construed to limit the ability of the Commissioner of Consumer Protection or the courts to establish certain acts or practices as unfair or unconscionable in the absence of abnormal market disruptions.

(Oct. 25 Sp. Sess. P.A. 05-2, S. 10; Oct. 25 Sp. Sess. P.A. 05-4, S. 3; P.A. 10-176, S. 2.)

History: Oct. 25 Sp. Sess. P.A. 05-2 effective October 31, 2005; Oct. 25 Sp. Sess. P.A. 05-4 amended Subsec. (a)(3) to make a technical change, effective December 1, 2005; P.A. 10-176 amended Subsec. (a) to add Subdivs. (4) and (5) defining “margin” and “notice”, added new Subsec. (d) re Attorney General posting notice, added Subsec. (e) re average margin for sales or offers that are not a violation of section and redesignated existing Subsec. (d) as Subsec. (f), effective July 1, 2010.
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Sec. 42-234a. Abnormal market disruptions and prices of energy resources: Civil actions by Attorney General; unfair trade practice. (a) The Attorney General, upon referral by the Commissioner of Consumer Protection, may bring a civil action in the superior court for the judicial district of Hartford against any person who violates any provisions of section 42-234 to recover a civil penalty of not more than ten thousand dollars per violation and such equitable relief as the court deems appropriate.

(b) The Attorney General, upon referral by the Commissioner of Consumer Protection, may bring a civil action in the superior court for the judicial district of Hartford against any person who knowingly violates any provision of section 42-234 to recover a civil penalty of not more than ten thousand dollars per violation, double damages and such equitable relief as the court deems appropriate.

(c) Notwithstanding the provisions of this section, any violation of section 42-234 shall be deemed to be an unfair trade practice within the provisions of chapter 735a.

Blast Email – Fax Communication Re: Gasoline Deliveries during Hurricane!

With the pending hurricane on the way the CT DOT has requested that all Distributors fill gasoline tanks! This will require a waiver for hours on the road and the ICPA along with GASDA has requested the DOT & DMV to grant this wavier!

With that said, as we all know the storm my come or the storm may not come and if it comes you most likely will sell the extra gas and if it does not come you most likely will not and then you will have draft issues. Our suggestion is to call your supplier NOW and work out these issues in advance. Communicate on the phone and follow up with emails if they say Yes to delayed drafts!

Also WATCH YOUR FILLS FOR WATER! Get water paste NOW do not wait! Check your tanks daily with water paste as is REQURIED by law. Do not think if your fills caps are not put back on tight by the delivery driver that you will not be responsible for the water in your tanks. We have seen this before! Get Veeder Route copies now showing zero water in your tanks! Check after ever single deliver no matter what time of the day or night it comes and if you get more than 1 inch of water after a delivery report it ASAP which means right after the delivery, not the next day after you have sold hundreds of gallons of possibly contaminated product to consumers! Sorry to tell you but it is your RESPONSIBILITY to make sure contaminated product does not get pumped into your customers’ cars NO MATTER how it gets into the tanks!! Your fault or not your fault! Why you have water alarms now and that is what they are for!

Here is what we see – during heavy rain storms delivery drivers are human – they do not always put the caps back on and seal them. Heavy rain goes into your fill area and the caps pop off, water goes into the tanks, the next day after the rain has stopped, dealers go and look and no water or the water is below the fill because it has already gotten into the tanks!! Tell your employee’s to call you ASAP is a water alarm goes off and check it out then – even if at 3AM!! These are all suggestions on how to avoid issues with the pending storm and while they are a pain, following them will be much less of a pain if you get water in your tanks and pumped into your customers’ cars. Have seen this before and it is no fun!!

Click Here for Complete Information!

Click Here for Complete Copy of Press Release!

Futures markets allow airlines that buy jet fuel or cereal makers that buy grain to hedge against the risk of changing prices by purchasing contracts for future delivery at a set price. A buyer and seller come together to determine a fair market value. But a growing number of experts now warn that excessive speculation in these markets has driven up prices to the speculators’ profit and to the punishment of the public.

New data seem to confirm the trend. Gensler cited May 31 data that show end-users accounted for just 12 percent of the “long” positions in futures contracts for benchmark West Texas Intermediate crude oil. Long positions are bets that prices will rise in the future. That means that 88 percent of bets on price hikes for oil were held by financial players_ mainly Wall Street banks and hedge funds that invest for the ultra wealthy — not interests seeking to use the oil.
The trend was the same for wheat futures traded on the Chicago Board of Trade, Gensler said; there end-users represented just 10 percent of trades betting that prices would keep rising months out — or “long” positions. Wheat prices, like oil, have soared this year.
This May 31 data suggests that huge inflows of speculative money create a self-fulfilling prophecy that drives up commodity prices.
CFTC data also show that up to 80 percent of trading in key futures markets is either day trades or trading around the expiration of contracts, Gensler said.

“This means that only about 20 percent or less of the trading is done by traders who bring a longer-term perspective to the market on the price of the commodity,” the CFTC chairman said. “We plan to publish historical data on directional position changes later this month on our website to enhance market transparency.”

Gensler said a top priority is finalizing a rule to establish so-called position limits_ caps on how much of the market any one trader can capture — “a tool to curb or prevent excessive speculation that may burden interstate commerce,” Gensler said.

Up until 2001, financial speculators faced caps on how much they could buy in futures markets. Those caps disappeared in 2001. A McClatchy investigation last month showed that participation ratios have flipped since then, with speculators now accounting for more than 70 percent of the oil futures market. On Thursday, Gensler said that number is up to 88 percent.

Gensler said that last year’s Dodd-Frank Act gave the CFTC new authority to policy financial manipulation of commodity markets. “We will use the tools to be a more effective cop on the beat, to promote market integrity and to protect market participants,” he vowed.

“It is essential to complete the task of implementing the aggregate position limits regime, congressionally mandated to guard against the burdens of excessive speculation,” Gensler said.
Gensler warned that Republicans in Congress have tried to slash CFTC funding in a bid to thwart its new regulatory powers, and Wall Street firms are furiously lobbying to delay new rules.

Gensler said that the CFTC’s mandate has been expanded seven-fold, and it needs more resources, not less, to do its job. “If the agency’s funding does not grow — or worse, gets cut — we would be unable to enforce new rules” to protect the public, he said.

In a Tuesday investment note, analysts at Wall Street research firm Oppenheimer & Co. said the OPEC oil cartel has put a number on how much speculators may be adding to the price of a barrel of oil.
“OPEC believes the current oil prices reflect $15-20 (per barrel) of risk premium attributed to financial speculation, which may be conservative,” the Oppenheimer report said. Oil currently trades at about $100 a barrel. “Barring a severe economic recession, we believe oil prices will remain inflated unless oil speculation is effectively regulated.”

Another McClatchy investigative report in May, based on secret State Department cables obtained by WikiLeaks, showed how Saudi producers told the Bush administration they’d grant Washington’s request to pump more oil in 2008 as prices hit record levels even though they lacked customers for the oil they already were pumping. Oil prices were soaring because of unbridled financial speculation, the Saudis insisted.

Not everyone blames speculators. Federal Reserve Chairman Ben Bernanke used a Tuesday speech in Atlanta to insist that global demand for oil is outstripping supply and brings oil price volatility. Similarly, he said, droughts and production shortfalls have resulted in demand outstripping supply in many grains markets.

Under the agreement, the 45-cent-per-gallon ethanol blender credit–the Volumetric Ethanol Excise Tax Credit (VEETC)–will be repealed on July 31 instead of December 31, saving $2 billion through the remainder of 2011.

The 54-cent-per-gallon tariff on ethanol imports will also expire on July 31.

The tax credit for cellulosic biofuel production, currently set to expire at the end of 2012, will be extended for three years, with annual caps on gallons, and will be expanded to include promising fuels from algae. This will allow the non-corn advanced biofuels industry to emerge and develop, said Feinstein.

Reduced tax credits for alternative fueling infrastructure, including electricity charging stations and natural gas fueling stations, will be extended through 2014. The small-producer tax credit will expire at the end of 2012, with a reduction in the per-gallon credit.

The loss of the subsidy could add extra costs for refiners like Valero and Marathon Oil, but is unlikely to reduce demand for corn because government mandates require increasing amounts of the corn-based fuel until 2015, said a Reuters report.

The agreement, based on Thune and Klobuchar’s Ethanol Reform & Deficit Reduction Act, would dedicate two-thirds of the savings, $1.3 billion, to debt reduction and the remaining $668 million in savings to renewable fuel incentives, which the legislators say will help lower retail gasoline prices.

The compromise can now be considered by the full Senate.

“After productive discussions with industry stakeholders over the past several weeks, we have reached a bipartisan solution that reduces the federal deficit and modifies current biofuels policy without pulling the rug out from under American renewable energy producers,” said Thune.

This deal “is a major step toward providing our businesses a clear path forward and keeping the biofuels industry competitive while reducing our debt by over a billion dollars this year. With this agreement we can not only continue to support homegrown energy, we can also demonstrate that members with different viewpoints can come together to find common ground to reduce the debt. It is a model for reducing government subsidies going forward,” said Klobuchar.

Recent votes in the Senate on this issue have sought to end the current VEETC while still continuing to fund blender pumps. This agreement is consistent with those votes.

Additional details:

Blender pump and alternative fueling infrastructure tax credit. Extends the existing alternative fuel station tax credit to include blender pumps and extend the credit through 2014 by using 2011 funding only; modify the tax credit to allow for ethanol blends between E15 and E85; and clarify that entire cost of dual-use blender pumps qualify for the credit rather than the incremental cost.

A taxpayer may take a 20% tax credit for the installation of alternative fuel infrastructure, up to $30,000, including E85 (85% ethanol and 15% gasoline) infrastructure. This credit is currently scheduled to expire on December 31, 2011. Other fuels that are eligible for the credit include electric charging stations and natural gas refueling stations.

Small-producer ethanol credit. Extend through 2012 the small-producer ethanol credit by using 2011 funding only. This credit is currently scheduled to expire December 31, 2011. The small ethanol producer credit is valued at seven cents per gallon of ethanol produced. The credit may be claimed on the first 15 million gallons of ethanol produced by a small producer in a given year. It applies to any ethanol producer with production capacity below 60 million gallons per year.

Credit for production of cellulosic biofuels and special depreciation allowance for cellulosic biofuels plants. Modify and extend through 2015 the existing $1.01 per gallon tax credit for cellulosic biofuels that would otherwise expire on December 31, 2012. This is done by using 2011 funding only. Includes a depreciation allowance for cellulosic plants, and the definition of cellulosic biofuels will include fuels made from algae.

For complete financial information and to arrange a visit to the site – Please call the office 203-327-4773  Cell 203-253-4901 or Email mike@gasda.org! Ask for Mike or John and request a Buyers Registration Form!