KPMA Marketer Summer 2013

SUMMER 2013

RFS SpecialREPORT Ethanol, RINs, Biofuel and the Blend WallSEE PG 10

The Benefitsof Association

InvolvementSEE PG 16

KPMA MARKETER 3

Letter from the Chairman ............................................................................5

From the Executive Director ......................................................................7

KPMA News .........................................................................................................9

RFS Special Report: Ethanol, RINs, Biofuel

and the Blend Wall ................................................................................... 10

The Benefits of Association Involvement ........................................ 16

KPMA Winter Seminar to Feature Tom Kloza ................................ 19

Thank You to Our Advertisers!ADD Systems ...............................................................................................................................15Atlantic Clean Fuel .................................................................................................................. 21C&S Canopy, Inc. ........................................................................................................................18C.L. McBride Company, Inc. ................................................................................................14H.T. Hackney Co. .........................................................................................................................14Harrell’s Car Wash Systems ................................................................................................. 21Heartland Payment Systems ..............................................................................................13Johnson Legal Network, PLLC ......................................................................................... 21Jones & Frank ............................................................................................................................. 24Marathon Petroleum ................................................................................................................4Mid-Valley Supply .......................................................................................................................2Modern Welding Co. of Owensboro, Inc. .....................................................................6S. Abraham & Sons, Inc. .........................................................................................................15Shield Environmental Associates, Inc. ......................................................................... 21Southern Services, Inc............................................................................................................18TOPICZ ...............................................................................................................................................8WorldPay ........................................................................................................................................19

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KPMA Marketer is published by Innovative Publishing Ink. 10629 Henning Way, Suite 8 • Louisville, Kentucky 40241 • Phone 502.423.7272 • Fax 888.780.2241

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OFFICERS & STAFFChairmanBob RileyBob Riley Distributors, Inc.Richmond, Kentucky

Vice ChairmanRayburn DossDoss-Fuelco, Inc.Harlan, Kentucky

Secretary and TreasurerJay HallThoroughbred Energy, LLCLexington, Kentucky

Executive DirectorBrian ClarkKPMALexington, Kentucky

Marketing & Membership ManagerAnne Sabatino HardyKPMALexington, Kentucky

COUNSELGovernment RelationsMike Helton(502) 226-3975

Legal Counsel Richard Johnson(859) 252-0093

Federal Regulatory CounselMark Morgan(202) 364-6767

Member of

TABLE OF CONTENTS

KPMA MARKETER 5

He supported this by citing survey data that revealed consumers’ “understanding“ about farming. It indicated that the farming community has allowed critics to shape and lead public perception about many of these issues in a manner that will have long-term detrimental implica-tions for the farming sector of our economy.

Are farming critics correct about modern farming? I don’t know, but I believe the editor is correct about the critics being effective in getting their message across to consumers.

Do we have a similar image problem? I believe that we do. I don’t have any scientific survey data to back this up, but I do have subjective data gathered over many morn-ings eating breakfast at a local home-style restaurant I frequent. Like most small-town places, there is a regular gang that shows up to eat and talk each morning. I generally just read my paper, but when I hear words like “gas prices,” my attention gets refocused. Based on much observation — as Richard Dawson always exclaimed, “Survey says!” — I believe we have an image problem.

Have you heard the saying “Perception is reality”? I run into this fairly often when I am speaking with customers. A particular person will have formed a belief about some subject that is firmly held but, frankly, wrong. The petroleum industry is drowning in these firmly held untruths. This is a problem that we all experience every day working with the public. It impacts how each of us runs his or her company, often in ways that we don’t recognize.

For the KPMA and its members, this image problem is both a constraint and an opportunity. It is a constraint because it has created a less-than-ideal pre-existing environment in which we make our case for the various issues that we advocate for or against. Through the existence of the KPMA and our unified efforts, we have the opportunity, on a state and local basis, to change perceptions. Many KPMA member companies are locally owned and operated businesses, each committed to and involved in its community. We are the companies

that sponsor the local youth sports teams and support area good works and civic activities. This engagement is important to maintain through positive contact with those who live and work around us — our customers. I believe that, as KPMA continues to develop programs and services and determine areas of focus, an important task for our staff and committees will be to brainstorm ways of reminding the motoring public that Kentucky marketers are an important part of the fabric of our various com-munities — and defining who we really are.

LETTER FROM THE CHAIRMAN

Who Decides Who You Are? by Bob Riley, KPMA Chairman and President of Bob Riley Distributors, Inc.,

Richmond, Kentucky

For the KPMA and its members, this image problem is both a constraint and an

opportunity. ... Through the existence of the KPMA and our unified efforts, we have the

opportunity, on a state and local basis, to change perceptions.

I was reading a piece in a farming magazine recently detailing the editor’s belief that farming has developed a poor image. He detailed many of the criticisms leveled against modern agriculture: increasing use of biotechnology, widespread pesticide use, antibiotics, poor land-use practices, a lack of sustainability and vari-ous other farming techniques viewed as bad by critics. He argued that this image problem was the result of not answering these criticisms about farming methods and resulting products.

1175-8.indd 1 6/6/13 12:45 PM

KPMA MARKETER 7

FROM THE EXECUTIVE DIRECTOR

by Brian Clark, Executive Director, KPMA

While most students were on summer break, many of Kentucky’s underground storage tank owners and operators spent time in the classroom this summer. Specifically, Kentucky’s Division of Waste Management, Underground Storage Tank Branch (USTB), released its long-awaited TOOLS program (Tank Operator Online Learning System), and the division has partnered with the KPMA to offer TOOLS training seminars across the state to help prepare the industry.

Special thanks to our 2013 KPMA sponsors and our TOOLS presenting sponsors: Federated Insurance, Southern Petroleum and Valor Oil.

Coming to a Town Near YouFederally mandated by the EPA, every underground storage tank (UST) owner in Kentucky must have a trained Designated Compli-ance Manager (DCM). Kentucky TOOLS is the official training software for Kentucky’s UST facility owners and operators to meet this requirement. Each Kentucky TOOLS seminar is presented by officials from Kentucky’s USTB and includes a copy of the Kentucky TOOLS Reference Handbook — your guide to the TOOLS software — and an essential resource for completing the training. Copies are available for purchase at www.kpmapress.com.

The first six seminars scheduled around the state (Lexington, Louisville, Florence, Owensboro, Prestonsburg and Somerset) were so successful that KPMA and the DWM/USTB added training opportunities through the fall in Frankfort (September 12 and October 23), Bowling Green (August 22) and Somerset (October 2). For more information and to register, visit www.kpma.net (choose the “Events” tab).

Education is a vital part of what the KPMA offers its members and the industry. We encourage you to take advantage of this training to stay in compliance with EPA requirements for your UST facility.

RIN-SanityOn a separate note, the Renewable Fuels Standard continues to make news as the advent of the blend wall and skyrocketing RIN prices put a strain on the petroleum supply and fuel retail system. Your KPMA joined a strong contingent of petroleum marketers from across the United States for the PMAA Day on the Hill in May. KPMA representatives spent the day in our nation’s Capitol meeting with all eight of Kentucky’s federal delegates. We carried the message that Congress needs to intervene and overhaul the RFS, particularly the EPA’s mandate for integrating E15. It is simply is not sustainable in the current marketplace.

I’m pleased to say our elected representatives were receptive to our plea. At time of writing, several committees in the Congress have reviewed the RFS, and, most recently, the House Energy and Commerce Committee Subcommittee on Energy and Power held its first hearing since the release of its anticipated RFS White Paper series. (Visit http://energycommerce.house.gov/ to read more.) Testifying before the Subcommittee were: EIA Administra-tor Adam Sieminski, EPA’s Office of Transportation and Air Quality Director Christopher Grundler and Department of Agriculture Chief Economist Joseph Glauber.

Earlier, the House Energy Subcommittee and the U.S. House of Representatives Oversight and Government Reform Committee held a hearing entitled “Up Against the Blend Wall: Examining EPA’s Role in the Renewable Fuel Standard.” Witnesses included Jack Gerard, president and CEO of the American Petroleum Institute, who testified, “The renewable fuel standard is irrepara-bly broken and poised to do significant harm to consumers, the economy and the nation’s fuel supply. The impact of the mandate has been made worse by EPA’s unwillingness to let science, court decisions and common sense guide its implementation.”

Committee Chairman James Lankford (R-Oklahoma) noted that there is evidence that the RFS is not meeting the original twofold purpose: “to move the United States toward greater energy inde-pendence and security” and “to increase the production of clean renewable fuels.” Further, Lankford points to the market change since 2005 and 2007 and the current domestic energy boom, and he stated that corn-based ethanol may not be any cleaner than gasoline and has other environmental consequences, such as using more water for producing corn-based energy than refining gasoline.

American Fuel & Petrochemical Manufacturers (AFPM) President Charles T. Drevna released this about the hearing: “EPA needs to take an honest look at the marketplace and the nation’s ability to consume the mandated volume of biofuels. Existing engine technologies, compatibility with fuel-delivery infrastructure and consumer impacts are real-world circumstances that require EPA to reduce the 2013 Renewable Volume Obligations (RVOs) for all four renewable fuel categories to more realistic levels. If left unaddressed, this pernicious policy will continue to adversely impact consumers at the grocery store and at the pump, as well as threaten engines on everything from automobiles to boats and lawnmowers.”

For more on this critical topic, read our special section on the RFS (page 10).

School Is in for Tank Owners

KPMA MARKETER 9

KPMA NEWS

KPMA Winter Seminar 2014What are you doing this January? Take a break from the cold and plan to attend the all-new KPMA

Members Only Winter Seminar in beauti-ful Hollywood, Florida, at the Westin Diplomat. This event should not be missed: networking events, educational seminars, a keynote lunch featuring OPIS Senior Analyst Tom Kloza and committee strategy sessions — all while surrounded by swaying palms and stretches of white sand beaches (not to mention the world-class Joe Lee-designed Troon golf course). Mark your calendar for January 21-23, and plan to attend. More on page 19.

Families and spouses are welcome, and the hotel’s special discounted event rate is available for up to three days before and after the event.

Welcome Our New Members!KPMA is pleased to welcome the follow-ing new members; please make them feel welcome!

EnSafeRicardo [email protected]

Fazoli’sSam [email protected]

Lon Lucas RealtyLon [email protected]

Penn Tank LinesRonald W. [email protected]

RBM CompanyJosh [email protected]

The Value of KPMA: Members Only DirectoryThe 2013-2014 KPMA Directory should be delivered soon to our members. But did you know that KPMA members can also access the directory in a searchable online version in the KPMA members-only section of our website? Try it today! Visit www.kpma.net and click “Login” in the upper right-hand corner of the site. If you have forgotten your username or password, contact KPMA at (859) 219-3571 or email [email protected].

TOOLS SeminarsThe first group of Kentucky TOOLS seminars that were held statewide this summer have nearly concluded — a second round of trainings are now open for registration (Frankfort, Kentucky: September 12, October 23; Somerset, Kentucky: October 2). Stay tuned to the weekly eMarketer for more. Contact KPMA for more information or to purchase

copies of the Kentucky TOOLS Reference Handbook. (The books can also be purchased at www.kpmapress.com.)

KPMA’s Day at the Races Date AnnouncedKPMA will hold its second annual Day at the Races on October 9, 2013. Plan to join fellow members for a day of business networking, horse races and delicious food at Keeneland, the heart of the horse industry in Kentucky. Look for more in the eMarketer and on www.kpma.net. Seating is limited. The fee of $40 per person includes a generous gourmet lunch buffet at reserved tables in the Phoenix Room, general admission and a racing program. See you there!

To submit news, calendar items or member updates, please contact Anne Sabatino Hardy at [email protected] or (859) 219-3515.

10 KPMA MARKETER

When will we hit the blend wall?This year, the RFS conventional biofuels mandate will require refiners to obtain credits showing that 13.8 billion gallons of (primarily) corn ethanol was used. However, because the U.S. will only use about 133 to 134 billion gallons of

gasoline (implying a 13.3 to 13.4 billion-gallon saturation

point), the 10 percent blend wall will be reached in 2013. This problem will be more severe in 2014, as 14.4 billion gallons

of conventional biofuels are required by law, and gasoline demand is not expected to increase. This situation is even more infeasible because sugarcane ethanol from Brazil is imported to meet part of the RFS (500 million gallons in 2012, and the EPA projects that this will be 666 million gallons in 2013).

What does that mean?As the ethanol mandates grow and as gasoline demand continues to decline, the RFS will become increasingly unworkable, and the refining industry will face a series of difficult decisions in order to stay in compliance with the law.

The auto industry is facing mandates (CAFE) to increase MPG in new cars; considering this, why wouldn’t the biofuel mandate be adjusted?The administration’s CAFE standards were implemented in 2011, and the RFS was enacted in 2007. In many ways, these are mutually exclusive regulations that were crafted in silos without consideration for how they interact with one another. More simply put, the RFS is a volumetric mandate, with no requirement that the volumes be adjusted in response to lower gasoline demand. The more ethanol that is added to the fuel supply, the lower consumer fuel economy will actually be.

Is it even possible for the blending volume mandates to be modified?The EPA administrator has the authority to waive the RFS “in whole or part” in response to severe economic or environ-mental harm or an inadequate domestic supply. AFPM believes the looming blend wall will cause severe economic harm as refiners are forced to either force a fuel into the market that engines and infrastructure are unable to safely handle or to reduce gasoline and diesel sold in the U.S. (in order to reduce compliance obligations). The EPA denied requests by governors of some states hard hit by drought to reduce the ethanol volume mandate in 2013. Even if EPA had lowered the ethanol volume mandate as the governors requested, the agency can grant a waiver only on a year-by-year basis and is subject to political influences. A longer-term congressional solution, such as a full repeal of this law, ultimately is needed.

Every day, industry professionals are bombarded with information about RFS and the blend wall that ranges from cautionary to positively alarmist. “RINsanity!” scream the headlines for seminars and news reports. But, in all the noise, it can be tough to get to the facts. KPMA Marketer spoke with Charlie Drevna, president of the American Fuel & Petrochemical Manufacturers (AFPM), to get some insight on the issues.

RFS SPECIAL REPORT: Ethanol, RINs, Biofuel and the Blend Wall

RFS — Renewable Fuel Standard

Blend wall — The point at which the gasoline supply is saturated with the maximum

amount of ethanol that can safely be dispensed through

existing infrastructure and used in all cars, small engines and other vehicles. The vast majority of cars, every other vehicle and small engines (such as boats, lawn-mowers, chainsaws, etc.), and the majority of gas stations are not able to handle gasoline containing more than 10 percent ethanol.

CAFE — The acronym for Corporate Average Fuel Economy, CAFE standards

are the U.S. regulations that set standards for average fuel

economy or MPG (miles per gallon) for auto manufacturers.

KPMA MARKETER 11

0  

1  

2  

3  

4  

5  

6  

7  

8  

9  

10  

Gaseous  and    Fuel  Cell  

Plug-­‐In  Hybrid  and  All-­‐Electric  

Diesel   Hybrid  Electric   Flex-­‐Fuel   Micro   Total  

2011  

2025  

2040  

Gasoline Market and RFS as % Market Share

RFS REQUIRED VOLUME

2007 EIA FORECAST GASOLINE DEMAND

TOTAL RFS AS % OF FORECAST MARKET (EXCL. BIODIESEL)

2013 EIA FORECAST GASOLINE DEMAND

RFS AS % OF FORECAST MARKET

(EXCL. BIODIESEL/E85)

2012 15.2 153.7 9.24% 133.8 10.50%2013 16.55 155.7 9.99% 133.8 11.50%2014 18.15 157.7 10.87% 131.8 12.40%2015 20.5 159.9 12.20% 131.2 14.20%2016 22.25 161.9 13.13% 130.6 15.50%2017 24 164.0 14.03% 130.0 16.90%2018 26 166.1 15.05% 129.2 18.60%2019 28 168.3 16.05% 128.5 20.30%2020 30 170.4 17.01% 127.9 22.20%2021 33 172.7 18.53% 126.2 24.80%2022 36 174.9 20.01% 124.5 27.40%

(Source: Energy Independence and Security Act; U.S. Energy Information Administration)

Sales of Light-Duty Vehicles Using Non-Gasoline Technologiesby Type, 2011, 2025 and 2040 (million vehicles sold)

(Source: U.S. Energy Information Administration)

Gaseous andFuel Cell

Plug-In Hybrid andAll-Electric

Diesel MicroFlex-FuelHybrid Electric Total

2011

2040

2025

0

8

7

6

5

4

3

2

1

10

9

12 KPMA MARKETER

Retailers will have to invest significant sums to equip their stations to offer E15. What is an estimate of the cost associated with equipping a station to sell E15? What kinds of changes and additions need to be made to current storage and dispensing systems to offer E15?There is a wide range of work and associated cost with retrofitting a station with equip-ment to sell E15. This can range from simple changes on the hose/nozzle to installing new underground storage tanks. Depending on how the station is configured, it can cost anywhere from $30,000 to $200,000 to retrofit a station. When you consider the average annual profit for a gas station is between $30,000 and $40,000, you can see the challenge in getting necessary infrastructure installed.

Is a retailer who sells E15 exposed to potential misfueling liabilities? Is a retailer who sells E15 exposed to potential defective product liabilities? Is it possible for E15 to produce engine maintenance indications in vehicles manufactured after 2000?There is a tremendous amount of uncer-tainty with the effects of E15 on the existing vehicle fleet and even those cars (MY 2001 and newer) approved to use the fuel by the EPA, as well as misfueling concerns for nonapproved applications. The potential liability would extend to retailers, vehicle manufacturers and anyone in the fuel supply chain.

Does the increasing production of E15 result in the increase of price for corn or other corn-based products including food?AFPM represents the manufacturers of gasoline, diesel and other transportation

fuels, so we’re not experts on the corn market, but multiple other entities involved with raising livestock, poultry and other food products have identified the RFS as a significant factor in rising food and feed prices. In 2012, approximately 40 percent of the nation’s corn crop went to ethanol production, making the ethanol industry the largest user of corn in the U.S. for the first time.

Proponents of increasing ethanol levels frequently comment that a gallon of ethanol is cheaper than a gallon of gasoline. Is this true? If so, will it always be true?Ethanol proponents obfuscate the true cost of ethanol by ignoring ethanol’s lower energy content — gasoline contains 1.5 times more energy per gallon than a gallon of ethanol. According to the U.S. Energy Information Administration, while ethanol is currently cheaper on a volumetric basis, it is more expensive on an energy basis, meaning its costs consumers more per mile. The closest consumer cost comparison is to look at the price of regular gasoline, containing 10 percent ethanol, and the price

of E85. AAA publishes the average price for each, and, historically, E85 has always been more expensive than regular gasoline when you adjust for the lower energy content of the fuel. Anyone can check these numbers at www.fuelgaugereport.com.

What is the current demand for increased-volume ethanol products such as E85?According to the U.S. Energy Information Administration, demand for E85 (a blend of 85 percent ethanol and 15 percent gasoline) is projected to remain flat for the next two decades. In 2013, E85 demand is projected at 130 million gallons, or approximately 0.09 percent of gasoline demand. Approximately 5 percent of vehicles are capable of running on E85, and only approximately 1.5 percent of gas stations offer it, but the major barrier is consumer demand. According to the EPA, consumers with flex-fuel vehicles and reasonable access to E85 fill up with the fuel approximately 4 percent of the time — primarily due to the MPG penalty and increased cost.

What is a RIN?A RIN, or a Renewable Identification Number, is the credit a refiner must turn into the EPA to show a gallon of biofuel was mixed with the gallon of gasoline or diesel or home heating oil. Ethanol RINs are separated at the point of blending, which is often accomplished at a third-party terminal not owned by the refiner. In practice, a RIN essentially operates as a permit to sell gasoline and diesel in the U.S. RIN availability is therefore dependent on having sufficient gasoline demand to accommodate additional ethanol volumes. As the U.S. approaches the blend wall, the market has started anticipating a shortage of RINs, driving the price of a corn-ethanol RIN from 4 cents in 2012 to highs of $1.16

How Familiar Are You with E85?

How Familiar Are You with E15?

8%Very Familiar

7%Very Familiar

21%Somewhat

Familiar

19%Somewhat

Familiar

23%Not VeryFamiliar

23%Not VeryFamiliar

48%Not at AllFamiliar

52%Not at AllFamiliar

Ethanol — An alcohol-based fuel made from fermenting and distilling

starch crops, such as corn. It can also be made from

“cellulosic biomass” such as trees and grasses (U.S. Department of Energy, www.fueleconomy.gov/feg/ethanol.shtml). Ethanol can also be made from sugarcane.

The penalty of E85 — According to the U.S. Department of Energy

(www.fueleconomy.gov/feg/ethanol.shtml), FFVs operating on

E85 usually experience a 25 to 30 percent drop in miles per gallon due to ethanol’s lower energy content.

FFV — A Flexible Fuel Vehicle is one that is designed to run on gasoline, E85 or any

mixture of the two.

(Source: U.S. Energy Information Administration)

KPMA MARKETER 13

in March 2013. More recently, the price of corn ethanol RINs have stayed around 90 cents, which adds about 9 cents per gallon of gasoline in additional cost to a refiner dependent on RIN purchases.

How will/does this mandate affect my business?The blend wall is upon us, brought on by growing mandates; declining gasoline con-sumption; a lack of consumer acceptance of E85; and ongoing market, technical and legal challenges with E15. After blending as much biofuel as the market will allow, refiners will be forced to stay in compli-ance by cutting gasoline and diesel sold in

the U.S. (since both reduce number of RINs they need), either by cutting refinery runs or by exporting fuels. According to a study by economic consulting firm NERA, by 2015, the combination of these blend wall impacts will raise the cost of producing gasoline by 30 percent and the cost of producing diesel by 300 percent. The price of RINs has already impacted business decisions. OPIS reported in March 2013 that there were already refiners and importers redirecting gasoline to international markets to avoid the cost of the RINs. In addition to supply and cost issues, there is still uncertainty with liability associated with mid-level ethanol blends.

What are the implications of the mandate to increase ethanol volumes — domestically and internationally?There is a wide range of problems with the RFS, which is why AFPM advocates for its full repeal. It makes refineries less competitive internationally, places consumers at risk for engine damage, increases prices at the pump, increases food and feed prices at home and abroad, and — according to the EPA — is increasing greenhouse-gas emissions and worsening air and water quality. There is no longer a public-policy justification for this law.

The blend wall is upon us, brought on by growing mandates; declining gasoline

consumption; a lack of consumer acceptance of E85; and ongoing market, technical and

legal challenges with E15.

14 KPMA MARKETER

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KPMA MARKETER 15

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16 KPMA MARKETER

The Benefits ofAssociation Involvement

What’s in It for You, Your Business and the Industry?by Jean Feingold

There are many ways petroleum marketers can be involved in their industry. They can join their state associations, attend state association meetings, participate in regional conferences, attend the PMAA Fall Meeting and NACS Show, and contact state and national elected officials about industry issues. While these activities take time and/or money, the benefits they pro-vide are worth the investment.

Just talking with other association members can be one of the biggest benefits of joining state associations and attending their events, stressed Jay McKeeman, vice president of govern-ment relations and communications for the California Indepen-dent Oil Marketers Association. Petroleum marketers “can learn from one another,” he said. “If they have a problem, they can find out they’re not the only one and get help with it.”

McKeeman points to the value of educational materials and seminars presented at association and regional meetings. “This

brings members a convenient way to understand complex issues, state-of-the-art technology and the framework of com-panies in light of other issues like health insurance,” he noted. Association staff members also stand ready to answer questions about members’ concerns.

While petroleum marketers know their businesses today, it’s important to anticipate what might happen for the industry and how it will affect them, noted Brian Clark, executive director of the Kentucky Petroleum Marketers Association. “Association engagement and participation give you insight,” he said. “That is foundational to maintaining a competitive edge in the market-place. Professionally, you expand your skill set and that of your employees through association-sponsored training, education initiatives, and other opportunities for professional development.”

Clark has seen many examples of members channeling their passion for the industry through the association or findingre-

KPMA member Richard Johnson is the author of a new book, The Marketer’s Legal Handbook, published by KPMA Press.

KPMA MARKETER 17

The Benefits ofAssociation Involvement

What’s in It for You, Your Business and the Industry?by Jean Feingold

newed passion for their work through the relationships and opportunities for service association involvement offers. Some members do even more, like KPMA associate member Richard Johnson, an attorney, who wrote The Marketer’s Legal Handbook, a book of contracts, documents and agreements for the petro-leum industry published by KPMA Press.

Perhaps the biggest value of association membership is something unseen. Every year, legislation is introduced to give regulatory agencies or governments additional penalty power; increase penalty rates significantly for things like air quality, water quality and labor violations; or increase taxes, McKeeman said. PMAA and state associations work hard behind the scenes to prevent such regulations and laws from taking effect, both on their own and using linkages with other interest groups and industry associations. Few petroleum marketers are large enough to have in-house government relations staff members. Association members don’t need them because their associa-tions stay on top of government activity and provide members with the relevant information.

State associations are working now in several states to prevent government initiatives that would hurt petroleum marketers, PMAA President Dan Gilligan pointed out. “The state of Con-necticut is trying to push through a subsidy program to convert 500,000 homes from heating oil to natural gas,” he said. “The Connecticut Energy Marketers Association has done a marvel-ous job getting its members fired up to oppose this.” In Missis-sippi and other states, the natural-gas industry is trying to get state governments to spend money to subsidize the conversion of trucks to natural gas. While PMAA is not opposed to conver-sions, and several members are investing in CNG infrastructure, Gilligan said, government subsidies are not justifiable as corpo-rations are already making those investments. Another proposal defeated by association action would have created four climate zones in Texas to adjust fuel dispensers based on temperature.

McKeeman encourages members to know their local legislators and to help select good-quality candidates to represent their districts. “Communicate your opinions and thoughts to them

regularly,” he said. “If you get a legislator who’s familiar with your business, it saves a lot of time later on. They’ll listen to you if they know you.

“If you take on an issue all by yourself, you’re standing alone,” McKeeman added. “What the association brings is a veritas to positions on issues. It’s not just one company whining; it’s an industry providing communication to regulators and legislators, the press and the public. It’s a group, not an individual. If your association is vocal and communicating and active, it brings a lot of weight to arguments.”

“The number-one thing petroleum marketers can do to help their associations is to show up — at the annual meeting, at trade shows, at the NACS Show,” Gilligan said. “I have never met a marketer who was involved in their state association who regretted the time and effort invested. They say, ‘I really learned a lot and gained lifetime friends.’ Participating is excellent professional development. Beyond that, pay attention to what’s going on. Know the priorities of your association and how you can help advance their objectives.”

“Time is the real commodity of life today,” Clark said. “What you choose to do with your time, particularly as it relates to helping others, is the legacy you will leave. Your association needs you, your input, your talents and, most importantly, your presence. Your willingness to serve on a committee or take on a mantle of leadership is what will differentiate you. Ask your state executive where they need help most. They will connect you with the key areas of opportunity. When you step out of your comfort zone and volunteer for the task others shy away from, I think you will see great benefit. The value of association membership is all about engagement.”

Reprinted from the Summer 2013 issue of PMAA Journal. © Innovative Publish-ing Ink. All rights reserved. This article may not be reprinted in whole or in part without the express written permission of the copyright holder.

KPMA members Gary and Josh Emmick meet with legislators and offi-cials of the commonwealth at the 2013 KPMA Legislative Breakfast.

“Association engagement andparticipation give you insight ...

That is foundational to maintaining a competitive edge in the marketplace.

Professionally, you expand your skill set and that of your employees

through association-sponsored training, education initiatives,

and other opportunities for professional development.”

— Brian Clark, Executive Director, Kentucky Petroleum Marketers Association

18 KPMA MARKETER

Our Mission:C & S Canopy, Inc. is dedicated to providing our customers with the highest-quality materials and workmanship at fair and market-competitive prices. Our mission is to establish a lasting relationship with each customer by exceeding their expectations in all areas, including service, workmanship and timely installations. This relationship will provide the foundation for repeat and referral business, thereby ensuring the longevity of our company.

OWNERS: Keith Chambers and David ThomasSALES: David Stone – Cell: 205.612.2109

SUMMER 2013

RFS SpecialREPORT Ethanol, RINs, Biofuel and the Blend WallSEE PG 10

The Benefitsof Association

InvolvementSEE PG 16

To advertise in future issude of the KPMA Marketer, please contact Kelly Arvin at 502.423.7272 or

[email protected]

www.ipipub.com

KPMA MARKETER 19

KPMA is proud to announce the NEW Winter Seminar in beautiful Hollywood, Florida, at the Westin Diplomat (www.diplomatresort.com), featuring keynote speaker Tom Kloza, senior oil analyst at Oil Price Information Service (OPIS).

The Winter Seminar is for KPMA members only and will also include committee strategy sessions, networking events, informational sessions and more. A golf outing is planned for attendees at the Westin’s 7,000-yard championship golf course,

managed by internationally renowned Troon Golf® (www.diplomatresort.com/golf).

Mark your calendars today for an event you won’t want to miss in January!

Look for more information about registration soon in the weekly eMarketer and on KPMA’s site. Discounted group rates will be available to member attendees for the days of the event as well as three days prior and after.

Want to join a committee? Contact Anne at (859) 219-3515 or at [email protected]. Not a member? Join today!

KPMA Winter Seminar to Feature Tom KlozaJANUARY 21-23, 2014

Don’t miss the KPMA/IPCA Fall Meeting

and Golf Outing

September 9 & 10, 2013

Contact your local Federated representative to learn more about business succession and estate planning resources, including a complimentary initial consultation with our independent attorney network*.

Visit www.federatedinsurance.com to find a representative near you.

*Retail value of $250. Some restrictions may apply.

Federated Mutual Insurance Company • Federated Service Insurance Company* • Federated Life Insurance CompanyOwatonna, Minnesota 55060 • Phone: (507) 455-5200 • www.federatedinsurance.com

*Not licensed in the states of NH, NJ, RI, and VT. © 2013 Federated Mutual Insurance Company

Too Busy To Protect Your Business?

KPMA MARKETER 21

535 Wellington Way, Suite 380lexington, KentucKy 40503

Petroleum Marketing law and litigation

commercial Recovery and litigation

general corporate law, including contract and Franchise law

administrative agency law, Regulatory law and compliance, Defense and litigation

Services

oFFice859/252-0093

FacSiMile859/252-2277

www.lexlaw.us

thiS iS an aDveRtiSeMent.

336.416.2320atlanticcleanfuel.com

[email protected]

• Bottom-sweeping, multi-stage filtering of fuel in underground storage tanks (UST)

• Manned-entry inspection and cleaning of aboveground tanks (AST)

• Routine maintenance programs available

• The Kentucky Petroleum Marketers Association has partnered with The Hartfield Company of Kentucky to help reduce and control your health care costs.

• Today’s financial market can be challenging for all of our members. Reevalu-ating your company health care costs and coverage can save you money as well as enhance your benefits without jeopardizing coverage.

• Even if your business currently has Anthem Group coverage, you can still take advantage of available discounts.

If you are interested in reducing your company’s health care premiums, please contact The Hartfield Company of Kentucky at 800-246-9728.

Your membership with the Kentucky PetroleumMarketers Association can

SAVE YOU MONEY on group medical insurance!

KENTUCKY PETROLEUM MARKETERS ASSOCIATION2365 HARRODSBURG RD., SUITE A325LEXINGTON, KY 40504