The national debate over energy policy has focused heavily on petroleum prices. NACS has historically focused its advocacy efforts on policies that would directly affect petroleum retailers rather than engage in broader policies that more directly affect the refining and crude oil industries. Consequently, while we have been supportive of certain policies (additional production of crude oil on domestic lands and expansion of refining capacity), we have endeavored to remain in the background on these issues.
The current situation regarding America’s overall energy policy is now having a direct effect on retailer operations. It can be argued that federal policies have directly contributed to the high price of crude oil, and consequently are a primary source of pain for retailers in the current economic climate. For example: Higher crude oil prices result in higher wholesale fuel costs and contribute to reduced retailer margins and the extension of retailer credit lines to maintain adequate motor fuel supplies in inventory.
The convenience and petroleum retailing industry sells more than 80 percent of the gasoline in the United States. In 2008, the industry sold $450.2 billion worth of fuel, representing 72 percent of the industry’s total sales for the year. As witnessed in 2008, when crude oil prices increased to $140 per barrel, the impact on retailers was significant. The future of the liquid motor fuels market has serious implications for the business model of this industry. As such, it is critical that the industry be engaged in discussions affecting this broad market.
While NACS is not taking the lead on these issues, NACS is incorporating the following positions into its advocacy and communications:
- NACS believes that recent transportation fuel prices are fundamentally the result of inadequate supply at a time of increasing international demand and that these prices are having a negative effect on consumers and retailers alike.
- NACS believes the United States can and must take a more aggressive role in providing for its own energy needs by concurrently expanding its use of domestically available natural resources and promoting the development of marketable alternative fuels.
- NACS believes the commodities futures markets play an important role in the transportation fuels sector, but that questions concerning its operations must be resolved in a manner that poses the least amount of disruption to the market.
Therefore,
- NACS supports oil and natural gas exploration and production on domestic land, including:
- The Arctic National Wildlife Refuge
- The Outer Continental Shelf
- The Gulf of Mexico
- NACS supports development of alternative forms of petroleum resources, including:
- Production of shale oil reserves in Utah, Colorado and Wyoming
- Utilization of oil sands imported from Canada
- Conversion of coal into liquid oil
- NACS supports the development and marketing of alternative transportation fuels, provided:
- Such fuels are implemented with due respect to the existing storage and distribution infrastructure and maximize the compatibility of the same.
- Retailers are not required by law to convert existing equipment to accommodate new fuel formulations and are left to make conversion decisions based upon the development of consumer demand
- Policies are implemented in such a way as to not disadvantage the development of particular fuels or feedstocks
- NACS supports enhanced transparency in the commodities futures markets, including:
- Identification of traders, commercial and non-commercial
- Other features deemed by experts to promote transparency and eliminate potential deceptive practices