This week, the Senate began what will likely be several weeks of debate concerning a comprehensive energy policy bill. The legislation includes an increase in the existing mandate for renewable fuels from the current 7.5 billion gallons by 2012 to 36 billion gallons in 2022. More troubling, however, is the required use of 8.5 billion gallons as early as next year. A coalition of organizations representing a broad range of interests, primarily stemming from the food industry, have expressed strong opposition to the requirement because of the unintended consequences it is likely to have on animal feed and end-use food products. NACS has joined this group to express its opposition.
Senate Price Gouging
The energy policy bill also includes revised price gouging legislation offered by Senator Maria Cantwell (D-WA). The senator has been very cooperative with NACS to amend her language to protect honest retailers from wrongful prosecution. Consequently, the bill under consideration before the Senate reflects changes advocated by NACS to define price gouging and to enable retailers to respond to market conditions. Specifically, the bill:
- Declares it unlawful to charge an unconscionably excessive price for crude oil, gasoline or distillates during a presidential energy emergency
- Unconscionably excessive price is defined as a price that:
- Constitutes a gross disparity from the average price charged by that retailer during the 30 days prior to the emergency and grossly exceed the price charged by other suppliers within the same relevant geographic market; or,
- Represents an unfair leverage on the part of the supplier; and,
The price is not attributable to increased costs, including replacement costs, and is not attributable to local, regional, national or international market conditions.
- In determining if a violation has occurred, prosecutors shall take into consideration whether:
- The price charged would reasonably exist in a competitive and freely functioning market; and
- The amount of fuel sold during the emergency period was greater than the average amount sold during the preceding 30 days.
Penalties in the Senate bill are much lower than provided in the House bill, such as:
- Civil penalties of not more than $500,000 for an independent small business marketer of gasoline and not more tan $5 million for any other supplier
- Criminal penalties of not more than $5 million and/or 5 years in prison
In a letter to Cantwell (PDF), NACS expressed its appreciation for the changes she made to her bill on behalf of the retail community. However, NACS continues to oppose the legislation for concerns regarding the affect any legislation that seeks to control prices will have on the market.
Vote on E-85 Mandate Postponed
The House postponed a markup on legislation that would also increase the renewable fuels mandate, albeit at a much slower pace. Of most importance to NACS is a provision in the draft legislation that would have directed the Secretary of Energy to implement a requirement for retailers to install E-85 fueling systems once the number of registered flex-fuel vehicles in a region reached 15 percent of the fleet.
NACS is working hard to strip this provision from the bill when the House Energy and Commerce Committee considers it. A markup is possible as early as next week.
Regulating Popcorn Butter
This week in Congress, Representative Lynne Woolsey (D-CA) introduced a bill (H.R. 2693) mandating that OSHA issue a temporary regulation, and then a final regulation on workplace exposure to diacetyl, the butter flavoring ingredient frequently used in microwave popcorn. NACS believes it is bad public policy for Congress to circumvent the regular process of regulatory rulemaking.
Additionally, while the bill addresses the supposed harmful effect to manufacturing employees, its interpretation can also mean that it would have an effect on retail employees. If this bill were to become law, the regulation would apply to all locations in the flavoring manufacturing industry that manufacture, use, handle or process diacetyl.
Attorney could interpret the word handle to apply to employees that deliver, stock shelves and checkout customers buying the product. Just wait for the lawsuits! Well, hopefully we are jumping the gun on the lawsuits, but in D.C. this week, a government employee did sue his drycleaner for $65 million in damages because it lost his pants.
Cough Syrup Abuse
Concerned about the widespread misuse of over-the-counter medicines, Senator Joe Biden (D-DE) is planning to introduce legislation that would regulate cough and cold products containing Dextramathorphan (Dex). Minors have been purchasing products with Dex, such as Robitussin, and drinking them to get high. NACS has been working with Biden's office on this legislation, and it appears that the focus will be on making these products age-restricted. We have indicated to the senator and his staff that if the scope of legislation remains focused on age restriction and equally applies to all retailers, NACS would not oppose his bill.
Until next week, have a great weekend.
John Eichberger
Vice President, Government Relations