YOUR WEEKLY MEMBER NEWS LETTER: is a service provided only to members of the Nebraska Petroleum Markers & Convenience Store Association (NPCA). If you have any key personnel that would like to be added at no additional charge, please feel free to reply totkeigher@npcainc.com, katie@npcainc.comor call (402)-474-6691.
Over the course of 99 truck days - 17 actual days - seven trucks and seven drivers clearly demonstrated that it is possible to get at least 10 miles from a gallon of diesel fuel in a Class 8 Heavy Duty Tractor. If the 1.7 million trucks on North American highways today achieved the same level of efficiency as the trucks in the
Run on Less initiative, they would save 9.7 billion gallons of diesel fuel - about $24.3 billion based on today's fuel costs - alongside 98 million tons of carbon dioxide each year.
All of the drivers averaged 10.1 mpg during the roadshow. The participants were: Henry Albert in a Freightliner Cascadia driving for Albert Transport; Brad Long in an International ProStar driving for Hirschbach; Tommy Revell in a Volvo VNM driving for PepsiCo's Frito-Lay Division; Roberto Sandoval driving an International LT for Mesilla Valley Transportation; Joel Morrow driving a Volvo VNM for Ploger Transportation; Clark Reed driving a Freightliner Cascadia for Nussbaum; and Mark Risien driving a Freightliner Cascadia for US Xpress. The trucks used unique combinations of data-gathering technologies and retrofits meant to improve their efficiency.
During the press conference to present the results, Mike O'Connell, senior director of supply chain for PepsiCo, an event sponsor, said, "When the idea for Run on Less first came about, we knew we needed to be part of the experience. Through the road show we have demonstrated best practices in attaining better miles per gallon, providing a platform to encourage widespread adoption of fuel efficiency."
Annie Peter, fleet sector marketing manager for Shell Lubricants, another sponsor, added: "Throughout the event Shell has received inquiries as to why an energy company would sponsor an initiative such as Run on Less. We at Shell are committed to raising awareness about the energy challenge that is facing us today. We felt Run on Less was a great way to demonstrate that commitment and raise awareness about the energy challenges within the transport space."
The seven participating trucks delivered real freight on real routes across the United States, and some of them had to contend with the effects of hurricanes Harvey and Irma. The average gross combination weight over the course of the run was 55,527 pounds. For 31 of the 99 days, that average was up to 65,000 pounds.
Compared against the national average of 6.4 MPG, these seven trucks saved 2,877 gallons of fuel and $7,193 over the three-week period.
One of the most impressive one-day totals, given the challenging conditions, was when one participating truck encountered a 3,270-feet elevation gain with a 72,960 GCW load, while experiencing a 2.7-MPG headwind. It still achieved 9.7 MPG.
Even the lowest daily MPG recorded for a single truck, at 7.1, was better than the national average. The average of all the lowest days was 8.8 MPG, which was close to the 9 MPG goal that the Run on Less organizers - the North American Council for Freight Efficiency and Carbon War Room - hoped for during the planning stage.
One of the most interesting findings is that while the trucks had some similar specifications, they also each had some differences. Broadly speaking, similarities included the use of
low-rolling resistance tires, extensive aerodynamic technology on both the
tractor and the
trailer,
automated transmission and
idle reduction technology.
Another key factor in achieving consistently high MPG results is the drivers themselves. Industry estimates suggest that drivers can have as much as a 30 percent impact on fuel efficiency, based on how they handle the vehicle. The seven participating drivers were all high MPG fanatics who engage in driving practices that ensure they get the most out of a gallon of fuel.
So what are the takeaways from the first Run on Less roadshow?
Fleets of all sizes should be encouraged that it's possible to find a combination of fuel-saving technologies that work best for them based on their duty cycle, geography, etc. They can use the specs of the Run on Less trucks - late model tractors with commercially available technologies on them - as a starting point of what has been proven to work and can make modifications from there.
Truck manufacturers and components suppliers must continue developing and modifying products that push the MPG envelope farther. Enough fleet operators have demonstrated that even with today's lower fuel prices, they are willing to make the necessary investments to achieve more miles to the gallon.
While 10.1 MPG may seem like a good number, it was the average of all seven trucks over the course of therun. On any given day there were trucks that performed beyond 10.1 MPG. In fact, the highest daily MPG was 12.8 and three trucks achieved daily MPGs over 12.5.
High miles per gallon is possible with trucks on the road today operating in the real world, delivering real freight and dealing with the effects of weather, terrain and congestion. There is no reason for the national average to stay at 6.4 MPG. And there is no reason to think that 12 MPG or more is out of reach.
Technology being used as part of EPA's SuperTruck II initiative - the federal government's innovation program intended to help develop and demonstrate cost-effective technologies for doubling the freight efficiency of Class 8 trucks (aka 18-wheelers) - eventually will find its way into real world use, as did technology from SuperTruck I.
In the meantime, manufacturers and suppliers must keep improving their products, fleets must continue to spec fuel efficient technologies on their trucks, drivers should drive in a fuel-efficient manner, shippers need to seek out fuel efficient fleets to haul their goods, and other industry stakeholders need to share unbiased information and best practices.
As Peter pointed out, "Transport accounts for one-quarter of the world's energy use and one-fifth of the global energy related to carbon dioxide emissions. This means that the transport sector has a fundamental role to play in helping global efforts to reduce emissions."
We're thrilled to see major fleets such as PepsiCo and Shell take this into account. In fact, during the Run on Less finale press conference, O'Connell shared that PepsiCo has a goal to reduce absolute greenhouse gas emissions across the value chain by 20 percent by 2030. Annie Peter said Shell will continue to seek ways to increase efficiency and reduce emissions.
If the trucking industry commits to using less fuel and reducing its carbon footprint, who knows how high that MPG number could go? Of course, it will be critical for government, the NGO community, energy suppliers, manufacturers, fleet owners, businesses and associations of all types to continue to work together.
If seven trucks and seven drivers can get to 10.1 MPG, think of what the industry can achieve through a collective effort.
Have you ever met a business owner who didn't want to save money? Yet, the way some companies try to cut costs can have the opposite effect. With the economy leaving little room for error, trimming unnecessary expenses is the logical first step toward keeping more profit. Unfortunately, risk management is sometimes looked upon as one of those unnecessary expenses.
It could be that some businesses don't fully recognize the benefits a risk management culture can have. Instead, owners may be discouraged by the amount of time and money needed to reach that point. Successful businesses, on the other hand, know that to avoid possible financial pitfalls, they need to reduce their exposure. They realize risk management, despite the time and financial investment it can require, can have overall economic benefits while creating a safer working environment.
Involvement is key
No company, no business owner is immune to the possibility of losses. Indeed, the act of running a business exposes owners to everyday risks, such as fire, vehicle accidents, or even fraud. Identifying risks ahead of time and then dedicating resources and effort to avoid them through aggressive risk management can help keep a business ahead of the game.
Why bother?
It may feel counterintuitive to believe that a risk management culture-the sum total of all the efforts, attitudes, and investments related to workplace safety and loss prevention-can actually improve your bottom line. But, investing in risk management can definitely have advantages:
First, by managing risk, your company could experience fewer insurance claims. That may equate to lower insurance premium.
Second, fewer claims means you also help reduce the "after effects." Insurance is meant to cover the direct costs associated with a claim, such as property damage, medical bills, and legal expenses. What is often not anticipated, however, are the unexpected, "hidden" costs from a loss. For example, insurance may not cover the cost of hiring and training a replacement employee, lost productivity, negative publicity, higher premiums related to the loss...and the list goes on. These are typically out-of-pocket expenses and can quickly add up. It could take a lot of extra sales to recoup those losses.
Last, workers compensation claims often result in a higher work comp mod. Not only can this have an immediate effect on your premiums, the consequences could be felt for a long time.
Business owners who take risk management seriously understand its positive effect on their operations, both from employee well-being and financial standpoints. They see immediate value in being proactive. As one company risk manager put it, "There are many business owners who believe that risk management is too expensive. I would challenge them to put a pencil to it. I think they will be surprised that safety pays."
Attending a Federated Insurance Risk Management AcademySM seminar can be an effective way to start or grow your risk management program. Upcoming 1- and 2½ -day sessions are posted at
federatedinsurance.com, or contact your
local Federated representative for more information.
The 2018 PACEshow, the premier Midwest petroleum and convenience exhibition will be held Thursday, February 22nd and Friday, February 23rd in Kansas City, MO.
All successful tradeshows have 2 key components - the number and quality of exhibitors and the number and quality of attendees.As a result:
►Exhibitors. All NPCA associate members should exhibit at the 2018 PACEshow. Your competition will be there, shouldn't you be there to talk to your current clients, meet new clients and see what your competition is up to??? You can bet your competition will be doing all this and more. ►Exhibitors. Please encourage all of your vendors to exhibit at the 2018 PACEshow. ►Attendees. Please mark your calendars and make sure you attend and actively participate in the 2018 PACEshow. ►Attendees. Please encourage all of your key employees to attend and actively participate in the 2018 PACEshow.
Yesterday, PMAA UST Task Force member Bruce Garrett of Volta Oil Company (Plymouth, Massachusetts) represented PMAA before the national Association of State and Territorial Solid Waste Management Officials' (ASTSWMO) conference regarding PMAA's alternative sump testing method and ULSD corrosion concerns. The EPA's Office of Underground Storage Tanks (OUST) approved PMAA's low liquid level integrity test as an alternative method for containment sump testing that is required under the 2015 federal UST regulations. The 2015 regulations require liquid testing every three years of all containment sumps used for interstitial monitoring of piping. However, the test method cited in the rule requires filling sumps with water above the penetration points in the sump wall. This sump test method would be prohibitively expensive for tank owners. Instead, the PMAA UST Task Force developed an alternative test for containment sumps.
The alternative requires filling sumps only to the level of a liquid sensing device equipped with a positive shutdown that is mounted below penetration points in the sump wall. PMAA's alternative test method will significantly reduce reoccurring sump testing compliance costs for tank owners while being equally protective of the environment as filling the sump to the top, according to the OUST. This is an important victory for petroleum marketers that builds on previous cost saving flexibility won by the PMAA UST Task Force during the rulemaking process.
PMAA is continuing to work with OUST on additional flexibility measures for compliance with the 2015 UST requirements. In June, PMAA submitted comments to the EPA's Regulatory Reform Task Force requesting a 3-year compliance extension of the 2015 underground storage tank regulations.
Meanwhile, Mr. Garrett highlighted PMAA's concerns with ULSD corrosion studies to date. PMAA believes that the focus of accelerated corrosion studies on retail sites alone is misguided and could result in unfairly shifting responsibility for all corrective action to petroleum marketers. PMAA supports fuel quality studies along the entire petroleum production and distribution chain to determine the cause of accelerated corrosion. Until a broader study is undertaken, PMAA will refrain from funding studies that focus solely on finding causes downstream of the terminal rack.
After an uprising from Midwestern Senate Republicans regarding potential reductions in biofuel quotas for the RFS, EPA Administrator Scott Pruitt responded in a letter assuring them that he would no longer consider cutting biofuel quotas in the RFS. In the letter, Pruitt first states that he would not be moving the point of obligation. Secondly, Pruitt states in the letter that EPA will meet the statutory deadline to issue a final Renewable Volume Obligation (RVO) rule by November 30, 2017, and suggests that the final RFS should have at least 2.1 billion gallons for biomass-based diesel in 2018 and 2019. Furthermore, Pruitt says that the EPA is exploring whether the agency has the authority to issue a waiver to the Reid Vapor Pressure (RVP) requirements that would allow the sale of E15 year-round. Finally, Pruitt states that EPA will not pursue amendment regulations to modify treatment of Renewable Identification Numbers (RINs) associated with ethanol exports.
Given the letter, now Senators outside of the Midwest are fighting back. Nine Senators led by Senator Cruz (TX) sent a letter to President Trump insisting that he meet them within the next three weeks to consider changes to the RFS. The Senators also request that their "Senate colleagues who previously lobbied you on behalf of the ethanol industry" be included in the meeting in order to work out an agreement on the best path forward for the RFS. Other signers on the letter are Senators Cornyn (TX), Lee (UT), Toomey (PA), Enzi (WY), Barrasso (WY), Flake (AZ), Inhofe (OK) and Lankford (OK). Also in reaction to the Administration's response to the Midwestern senators, Senator Cruz put a hold on Agriculture Department nominee Bill Northey in order to better leverage negotiations.
PMAA is disappointed with the EPA Administrator's letter to Midwestern Senators because higher ethanol blends may lead to a de facto E15 mandate and set off a chain of events, resulting in a significant disruption of the nation's gasoline distribution and supply chain and skyrocketing prices at the pump. The vast majority of the nation's retail outlets, 95 percent of which are owned by independent petroleum marketing businesses, cannot legally store and dispense blends of gasoline over 10 percent ethanol. Existing equipment is certified for a maximum E10 blend. Currently, there is no viable way for UST system operators to demonstrate that existing equipment is compatible with gasoline blends over E10.
The battle is not over and PMAA will continue to support efforts to reduce the RFS's impact on small business petroleum marketers.
Wednesday night House Republicans passed the Senate's budget by a 216-212 vote. In doing so, a critical obstacle toward a major rewrite of the tax code was removed as the budget reconciliation procedural power allowing the Senate to pass a tax bill with just 51 votes is now in play.
In July, PMAA sent a letter to Senate Finance Committee Chairman Orrin Hatch (R-UT) regarding his request for stakeholder comments on overhauling the tax code. One of PMAA's most critical issues in the tax reform debate is how to treat pass-through businesses. The "framework" for tax reform released a few weeks ago calls for a reduction in the corporate income tax rate from 35 percent to 20 percent, and the creation of a new business tax for pass-through businesses of 25 percent (rather than having their business income taxed at the top individual rate of 39.6 percent) and PMAA strongly supports this change.
PMAA also continues to urge Congress to repeal the Estate Tax, but not to repeal the step-up in basis. Under the current law, family members who inherit a business take the business at its value as of the date of the original owner's death. However, if the step-up in basis were eliminated, the family members would be required to pay capital gains taxes on the original owners' gains in the business. In short, rather than bequeathing his or her descendants a legacy, a successful small business owner who grew his or her business from scratch, would be bequeathing his or her descendants a large tax burden, which many families may be unable to pay without selling the business. There is absolutely no reason for the repeal of the estate tax and the repeal of the step-up in basis to go hand in hand. PMAA urges Congress to reject any proposal to eliminate the step-up in basis as doing so would be extremely detrimental to a large number of America's small businesses.
Last night, the Senate voted to move forward with a provision in the budget resolution and vote against an amendment that would have blocked oil and gas drilling in part of the Arctic National Wildlife Reserve (ANWR). The amendment failed with a vote of 48-52, mostly along party lines, with Sen. Susan Collins (R-ME) voting for the amendment and Sen. Joe Manchin (D-WV) voting against the amendment.
Conservatives in Congress have been pushing for years to allow energy exploration in a 1.5 million-acre section of the ANWR, where billions of barrels of oil lie beneath its coastal plain. Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-AK) and Sen. Dan Sullivan (R-AK) pressed to get this provision in the budget and have previously backed legislation that would allow oil and gas development in ANWR. President Trump is also in favor of opening up parts of the refuge for oil and gas development.
White House Considering Support for Gas Tax Increase in Infrastructure Package
On Wednesday, White House director of the National Economic Council Gary Cohn told moderate Republican and Democratic members of the Problem Solvers Caucus, that "they will have a chance to vote to hike the gas tax as part of an infrastructure package in early 2018." Rumors are that the President is considering 7 cents increase in the federal gasoline tax.
Transportation Secretary Elaine Chao reported this week that work on President Trump's $1 trillion infrastructure plan would have to wait until work on a tax overhaul is complete. The likelihood that a gas tax increase would happen next year are slim as conservatives would be reluctant to raise the gas tax during an election year.
Supreme Court to Consider AX Antitrust Case
On Wednesday, Secretary of Energy Rick Perry released the Department of Energy's (DOE) Regulatory Review Report to the President. Perry stated that, "As Secretary of Energy, and in line with the President's Executive Order to promote energy independence and economic growth, I directed Departmental staff to review and reduce regulatory burdens on the American people. Through our ongoing efforts, we will promote job creation and economic growth, unleash American energy dominance, and advance the energy security of our international trading partners. From our review, we have identified several hurdles to domestic energy development and use, and offered recommendations to eliminate those burdens."
These recommendations are to: 1) streamline natural gas exports; 2) review national laboratory policies; 3) review National Environmental Policy Act (NEPA) regulations; and 4) review the DOE Appliance Standards Program.
In closing, Secretary Perry said that he looks forward to the President's review of the DOE recommendations, and to freeing the energy sector from unnecessary regulatory burdens.
Click here for more information on the DOE Final Report on Regulatory Review under Executive Order 13783.
Starting in April, all in-person purchases for MasterCard credit and debit card customers in the U.S. and Canada will no longer require a signature.
MasterCard states that its secure systems, along with digital payment methods such as card chips, tokenization, biometrics and digital platforms, provide more secure methods to prove a person's identity and the signature simply is not required for security.
Earlier this year MasterCard announced that they are working on a tool to allow cardholders to register and enroll their fingerprint, which is then encrypted and stored on the card. Cardholders will then be able to insert their chip card into a standard reader and place their thumb on the biometric reader, which will scan the fingerprint and authorize the purchase - no PIN required. That is expected for release later this year.
Earlier this week, the U.S. Commerce Department announced its affirmative preliminary determinations in the antidumping duty investigations of biodiesel imports from Argentina and Indonesia. As a result, importers of Argentinian and Indonesian biodiesel will be forced to pay cash deposits on biodiesel imported from the two countries. The cash deposit rates range from 50.29 percent to 70.05 percent for Argentinian biodiesel, and 50.71 for biodiesel imported from Indonesia. The cash deposit requirements will be imposed when the preliminary determination is published in the Federal Register sometime soon. This is the second trade action relating to biodiesel. Antidumping and countervailing duties go hand in hand as both seek to remedy the same issue.
In August, the Commerce Department made a preliminary determination in a countervailing duty case that found that Argentina and Indonesia have been unfairly subsidizing their production of biodiesel. Because of the preliminary countervailing duties of as much as 64.17 percent that were applied in August, Argentina's Foreign Ministry indicated that the new duties would have little impact because the countervailing duties already made access to the U.S. market impossible.
Argentinian biodiesel currently accounts for two-thirds of the U.S.'s biodiesel imports. PMAA is concerned that the cash deposits on biodiesel will likely force fuel prices to rise because the U.S. must satisfy the biodiesel quota under the RFS and will have to find a way to replace nearly 250 million gallons of biodiesel per year. The Commerce department is scheduled to announce its final determinations on or about January 3, 2018, unless the statutory deadline is extended. A final determination by the International Trade Commission will follow within 45 days. If the antidumping finding is upheld, duties would be in place for five years.
