Petroleum marketing and retailing provides the lifeblood for our transportation sector and a tremendous service for those looking for or needing a convenient retail experience. Unfortunately, the industry all too frequently becomes an unnecessary target for legislators and regulators who may think they are acting in the public good.
We are, to some minds, a “sin” industry selling carbon-emitting fossil fuels, tobacco, alcohol, fatty foods. Never mind that these core products range from essential to modern American life to legal product choices desired by free-choosing adults. Never mind the cost to honest business people, their employees and their customers. Never mind if the cure solves a problem that doesn’t exit or is overblown.
You can add to that the anti-business policies generally facing small business from regulators and legislators in areas such as healthcare policy or labor.
Fortunately, the industry has aggressive and highly competent trade association aggressively fighting against such overreach from the state to the nation’s capital. And fortunately for those associations there are individuals who go above and beyond the call of duty to represent their peers in the toughest battles the industry faces. <i>NPN Magazine’s</i> Legislative Leader Awards was developed to give them the much needed recognition they deserve for their hard work, while at the same time encourage others in the industry to step up and join the effort. This year’s winners certainly deserve the accolades.
Winner, Federal Legislative Leadership
Jim Garrett purchased the Plymouth, Mass.-based Volta Oil Company back in 1976. He grew a small operation with roots back to the 1930s into a solid wholesale distributor of gasoline and diesel (and some heating oil) that also operates 11 convenience stores under the Rapid Refill brand. In addition he is involved in a convenience store/petroleum services construction company and partners in an engineering and environmental company. Almost immediately upon taking the reins of Volta Oil he realized the challenges the industry faced.
“The gasoline industry is a heavily regulated and legislated against,” said Garrett. “I realized I needed to join other marketers because I wasn't going to win this war all by myself. So I immediately joined a series of associations from my Texaco brand association to the state and then regional and national organizations.”
Garrett noted that in the early days he could do little more than pay dues as he spent “120 percent” of his time managing and growing the business. But as the company grew, and his sons became involved taking over some of the load, he was determined to payback the associations as best he could with his personal involvement. And that effort has been appreciated.
“Jim has been active at the federal level since the 1970s, he has been on the board of NACS and the Legislative committee,” said John Eichberger vice president of government relations for the National
Association of Convenience Stores. “He is always here for every fly in and day on the Hill for both NACS and PMAA. He has his particular issues of priority and doggedly pursues them. Stage II has been one of those tireless issues for Jim. I think he is well deserved of recognition.”
The range of issues he has worked on includes helping (along with others) the fight for swipe fee reductions that culminated in the Dodd–Frank Wall Street Reform and Consumer Protection Act. Garrett spent a considerable amount of time with Bruno Freitas, Barney Frank's chief of staff to help ensure that the Durbin amendment (specific to debit fees) would pass and ultimately reduce the likelihood of its repeal. “It's a big fight and it's not over,” said Garrett. “The whole credit card fee issue devastates many of us with the amount of money that we spend processing electronic charges.”
Garret has also been at the forefront of another potentially exciting regulatory development for the industry.
“For nearly three years, Jim has doggedly fought to end Stage ll (vapor recovery) regulations,” said Dan Gilligan, president of the Petroleum Marketers Association of America. “During that time he has had at least 20 meetings on the Hill pushing Congress to push EPA to define ‘ORVR widespread use.’ He has also sat in on three high level meetings at EPA on Stage ll – the guy has been tireless. We (and he) are now focused on getting EPA to revise its thinking on ozone transport region rules, which now are a barrier to getting rid of Stage ll in the Northeast.”
As impacted parties are aware, stations in ozone nonattainment areas have been required to install vapor recovery systems to capture vapor loss during fueling. Automobiles have similarly been providing onboard refueling vapor recovery technology – ORVR – since 1998. Eventually the station systems would not only become redundant, but potentially counterproductive as the two systems do not necessarily interact well. Not to mention the cost to station owners (over $50,000 per install and over $3,000 annually in operating expense).
The industry has been waiting for a final ruling that ORVR is in widespread use (technically eliminating their end of the requirement) and that finally came down this year with the EPA proposing that June 30, 2013 will be the date. As noted, that fight is not over.
“There is an interpretation that if you're in the ozone transport region – which Massachusetts is all the way down to New Jersey and Virginia – there is a requirement that the only way to get rid of Stage II is to replace it with something other than onboard canisters and that is what we are arguing over now,” said Garrett. “It seems like an unreasonable approach and even if that interpretation is correct it was written back in 1992 and a lot has changed since then and it should be reinterpreted. Will we win that war? I don't know. But I spend a lot of time in a coalition that the Independent Oilman's Association of New England put together that includes NACS, Sigma, NATSO, American Petroleum Institute and a variety of state associations.”
Garrett noted that one of his core efforts is to keep the battle rolling since for the national associations, it's more of a regional issue.
Winner, State Legislative Leadership
Tim Ward recently his fuel distributorship, Tom R. Ward Inc. in Firebaugh, Calif., though he remains actively involved. He is also a branch manager for Toro Petroleum. And, he has an additional sideline business. He also makes time to be on call for the California Independent Oil Marketer’s Association when the tough fights need to be fought in America’s toughest regulatory state.
A story about Wards tells it all. Once, at a meeting with the California Air Resources Board, the issue of his height, or lack there of (at 5’6”), came up. Ward inquired if they thought he had a Napoleon Complex. No, came the response from a CARB member. “We first started calling you the man in the blue (CIOMA) hat. Then we started calling you a fox terrier because you're a bit hyper. Then we started calling you the pit bull because you don't let go. Then we started calling you the Ever Ready Battery Bunny because you keep coming back. But now, we call you Yosemite Sam because you come in with both pistols drawn.”
Ward came up through the industry the hard way, and that approach has carried over into how he deals with regulators and legislators in a nightmare state for any small business, but particularly those dealing in fossil fuels.
“I worked for my dad for 20 years and when he died, the company was bankrupt so I had nowhere to go but up,” said Ward. “From the start I challenged all of the regulatory agencies I had to deal with when I thought they were wrong. My buddy warned me not to do that, but I told him right is right and I won every time. I beat the IRS, the state Board of Equalization – I could go on and on. And through that I realized that the agencies were not the gospel.”
CIOMA had been recruiting Ward for some time, but he was too busy turning around his operation and taking care of family needs to get involved immediately. But when he began to see the light at the end of the tunnel, he knew it was time.
“Jim basically created what is now our major political action fundraiser every year,” said Jay McKeeman, CIOMA’s vice president of government relations and communications. “It is a demolition derby held in his town. We started out at 10 cars and maybe 100 people, and now we have 40 cars and 2,000 people and food and merchandise sales.”
On the issues front, with California, it’s hard to know where to begin. McKeeman noted that Ward has been a champion of many different causes. “One of the early things he became involved with was the Board of Equalization wanted to put mechanical meters on all of the fuel delivery trucks so that they could be assured that they were getting the correct taxes,” he said. “Back then that was a big expense and a big technological change for the way fuel was delivered and Tim fought long and hard and got existing trucks grandfathered in and then a prospective as you bought new trucks that had to have the meters. And that saved the industry hundreds of thousands of dollars.”
Ward has also been involved in the “diesel wars” with CARB. Ward has vigorously pointed out that diesel is not evil, but in fact it is the lifeblood that drives the economy.
“To do, that Tim had to get involved in the epidemiology of how scientists calculate these premature deaths and such,” said McKeeman. “And Tim dug into it.”
Ward was also instrumental in getting one of the few common sense regulations passed in the state for aboveground storage tanks, which are used heavily in the farming community as well as distributors. CARB wanted vapor recovery systems on these tanks, some of which are not even connected to electricity. Ward asked in a meeting: “Well, why don't you paint the tanks white?” CARB conducted a series of tests tanks down on Ward’s property with some painted white and some left dark and it was determined that by painting a tank while you can save 66 percent of the evaporation from that tank. So instead of a devastating equipment requirement there is now a much more manageable painting requirement.
Ward gets the call so often because he is both outspoken and effective. He also manages to be both without alienating the regulators and legislators he works with. “I’m not shy about telling them what I think,” he said. “(An acquaintance at CARB told me) I keep them on track, I don't let them get off the subject and I make them answer questions that they really do not want to answer. I am black and white, I am honest and I only want what is fair for our trade association in the state of California because I love this state. We just have a screwed up political system here. When I am going to these meetings, I’m fairly tactful. I respect them for what they are and their beliefs even though I don't agree with them, and they know that. They know who I am. I like people and I've made a lot of friends in these agencies and there are some good people there.”
Why should you become involved?
The Legislative Leader award winners are special people in the industry. However, they are not special because of birthright, but because they have taken on the responsibilities required achieving such recognition. They are important, and the industry desperately needs many more of them.
“Guys like Tim (Ward) are huge,” said McKeeman. “Our industry has a lot small, privately-owned family-held businesses and people frequently have a hard time moving out of their sphere of influence. So finding people who are willing to take that extra step involving personal and business time for the greater good – I just can't explain how important that is to the industry and trade associations and our ability to move the ball down the field.”
Both of this year’s winners started out in their companies overworked with numerous, more pressing challenges. In such circumstances it is not easy to set aside the time required to take a leadership role. However, there are things that can be done.
“There are two ways to get involved even if you are very busy,” said Garrett. “First, obviously, you need to belong to the industry organizations. They will carry your message a lot more strongly than you could just buy yourself. Secondly, put your money where your mouth is. Support the PACs in your organization. They are critical. I would love to think we live in a country where money does not matter on the political scene, but that is not anywhere close to the truth. One of the hardest things for anybody doing business is to write a personal check—corporate checks are easier to write, but you can't. You have to write a personal check and it's vital to your business in the long run.”
Garrett went on to press his peers to fully access their schedules and really readdress priorities. “Maybe you can't do six or eight trips per year to D.C., which I do now, but couldn't do back then,” he said. “But you have to get there at least once. You have to get involved at the state level and at your association meetings. If you are asked to write letters to your local congressman you need to write those letters it's important enough that it should be in the priority list of things to do along with stocking the shelves if you run a convenience store or keeping the truck rolling.”
For all of the effort, the rewards can be quite substantial to those who take the extra step.
“One of the absolute most important things that people that start getting involved and stay involved gain is a breadth of knowledge that they did not have before just by the nature of their involvement,” said McKeeman. “Being involved in conference calls, e-mail exchanges, the development of issue papers or positions – our leaders get involved in issues a lot deeper and a lot broader than their particular business interests might have led them to in the past. That's a huge take away for people, and in the same vein, they establish networks and new contacts that they would not otherwise have.”
Being involved also allows you to not only support the industry on critical issue, but have some determination in how those issues are developed. “If you think that something ought to be done in a certain way, or not be done in a certain way for some reason, then you have to roll your sleeves up and get involved,” said Garrett. “If you are not involved with the associations, if you're not making contacts, it probably will not work the way you want it to work.”
The direct impact on your business operations certainly should have some motivation.
“These issues have real ramifications—dollars and cents ramifications,” said Garrett. “Otherwise, none of us being in business would waste our time with them. The swipe fee and Stage II have been the big issues, but I work with associations such as NACS on the range of issues we face -- menu labeling, ADA, Obama healthcare -- my feeling on this is that you are not going to change the world, but if you can at least accomplish small things and get the rules and the regulations to exempt small c-stores or such that's worth doing.”
Ward reinforces that message. “We are living what happens to us,” he said. “Guys like Jay (McKeeman), who I have terrific amount of respect for and does a fantastic job, but the people in the field, the people like me, have to realize that if we don't get involved with the organization to fight the injustices, we are going to go away. The Water Quality Resource Board wanted to make us change out our tanks every 10 years whether they were bad or not on talking aboveground storage tanks at petroleum distributors. They wanted us to replace the tanks on our bobtails I believe every five years. That would just put people out of business.”
And, of course, there is the final, ultimate satisfaction of fighting the fight and taking home the occasional trophy. “I don't know how many days—it would add up to months—I've spent in Sacramento meeting with politicians and regulatory agencies,” said Ward. “It's very discouraging to come up short 90 percent of the time (here in California) and be biting your lip and talking to yourself during a two and a half hour drive home from Sacramento. But when you do win, it will pay you back tenfold.”