Oregon Petroleum Marketers Association Tradeshow
Alliance Annual Meeting
Central Valley Petroleum Industry Golf Tournament
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Floor.
Kinder Morgan Pipe Break Spills Diesel
Realty Income Corp. Buys Circle K Stores
Water Regs Help Nevada Carwashes
Truckers Protest California Diesel Prices
Court Overturns SCAQMD Fleet Rule
SAN FRANCISCO, CA. — A section of the Kinder Morgan pipeline which moves fuel from San Francisco Bay area refineries to Northern California and Nevada ruptured, spilling diesel fuel into a marsh.
Kinder Morgan officials estimated that 40,000 to 60,000 gallons of fuel leaked into the Suisun Marsh, just north of Suisun Bay in the Sacramento River Delta.
Kinder Morgan officials said employees noticed a drop in pipeline pressure around 6:00 p.m. on April 27 and immediately shut down the pipeline. They did not find the source of the leak until noon the next day, however, when it was located via helicopter.
The 14" pipeline was shut until May 2 to replace the damaged section but Kinder Morgan spokesman Jerry Engelhardt said the company saw "little, if any, disruption" in fuel supply from the incident.
The markets primarily affected by the pipeline shut down were West Sacramento and Chico, CA., as well as Reno, NV.
Oil spill specialists with the U.S. Coast Guard are analyzing the environmental damage from the spill. Coast Guard Spokeswoman Lexia Littlejohn told reporters that "Sixty-thousand gallons is definitely a lot of fuel but I wouldn't classify it as a major incident."
Kinder Morgan is sending the pipeline for analysis to discover the reason for the rupture. They are also paying for the cleanup from the spill; the total cost of remediation is expected to run over several million dollars.
ESCONDIDO, CA. — Realty Income Corp., has signed a deal to acquire 112 Circle K-branded convenience stores from Alimentation Couche-Tard for $100.5 million.
The stores will then be leased back to Couche-Tard under 15 to 17 year lease agreements.
The stores involved in the transaction are located in nine states, primarily in the South, but include 38 in Arizona and two in New Mexico. The c-stores involved are "seasoned units" that have an average operating age of 16 years.
Realty Income Corp. says that it will hold the majority of the properties as long-term investments. However, it will look to sell off approximately $8.2 million of the c-stores through its Crest Net Lease subsidiary.
Tom Lewis, Realty Income chief executive officer, stated, "The high quality stores, good locations, excellent operating histories and long-term leases will make these stores a welcome addition to our portfolio of properties."
LAS VEGAS, NV. — New water conservation regulations are bringing more customers to Las Vegas area carwashes.
The Southern Nevada Water Authority passed a new series of water regulations at the beginning of the year designed to conserve water use in the desert city. Among two of the areas designated for immediate cutbacks were home landscaping and activities such as home carwashing that utilize large quantities of water.
Under the new regulations, auto owners in Clark County — which includes Las Vegas — are banned from washing their cars at home unless they use flow-restriction devices.
The Green Valley Hand Car Wash, on Sunset Road in Las Vegas, says business has increased 10% since the regulations were enacted. "Things have been good for us," General Manager Del Galster told local reporters.
Dave Farris, owner of the Oasis Self-Serve Car Wash, said business has increased for the self-service segment of the industry as well. He stated that "There has been an increase in business here but my customers are not happy with the restrictions."
He noted that his carwash captures "100% of our water back into a sanitary system, which complies with the restrictions."
LOS ANGELES, CA. — Truckers have taken to the streets — in a different manner — to protest the high price of diesel fuel in California.
In California, the retail price of diesel fuel rose more than 36 cents in two weeks at the end of April, reaching over $2.50 per gallon in some areas of the state.
At the Port of Oakland, more than 100 independent truckers staged a protest to call attention to the high price of fuel and refused to haul cargo from the Port.
The scene was repeated at the Port of Long Beach where over 500 truckers participated in their own protest. Independent trucker Ramiro Alonso told local reporters that "We're here to fight. With a price like this, we can't survive."
In a stunt that caught the attention of thousands of commuters, truckers parked or jackknifed three big-rigs on the I-5 in Commerce, CA., in the middle of the morning rush hour — then drove away in a waiting car. The trucks were painted with slogans reading "Down with the fuel prices." Police had been tipped-off to the protest and had tow-trucks nearby to move the vehicles but the process took an hour. Five truckers were arrested from the incident.
"It's clear that truckers are angry," said Stephanie Williams of the California Trucking Association. "We need a government action." The CTA is lobbying Governor Schwarzenegger to keep the diesel fuel refined in California inside the state to help keep supply higher and prices lower.
The Teamsters Union has also stepped in and says it plans to ask shipping companies to pay truckers a surcharge to cover the increase in fuel costs.
Like its gasoline, California's diesel fuel is a separate formulation from the rest of the nation. High prices do not necessarily bring an influx of additional fuel from surrounding areas to increase supply (and lower costs) because very few refiners are set up to manufacture CARB diesel.
DIAMOND BAR, CA. — In a move that may affect government agencies across the country, the Supreme Court has ruled that the South Coast Air Quality Management District did not have the legal right to require private fleets to purchase specific vehicles.
In an 8-1 decision, the Supreme Court found that the SCAQMD overstepped their authority when they passed a regulation requiring private fleets to purchase vehicles using the "lowest-polluting engines available."
It is estimated that over 5,500 "clean-fuel" heavy-duty vehicles and 3,400 passenger vehicles have been purchased since the SCAQMD passed the regulation in 2000.
The case was brought to the Supreme Court by a coalition of truck and engine manufacturers and oil companies who argued that the SCAQMD's regulations limited free trade and exceeded their authority.
The SCAQMD argued that they had authority under the Clean Air Act to pass the vehicle mandates in an attempt to reduce air pollution. They said that because they did not regulate the manufacturing of vehicles — but, instead, limited which vehicles could be purchased — they were within their rights.
Explaining the majority's decision Justice Antonin Scalia wrote, "The manufacturer's right to sell federally approved vehicles is meaningless in the absence of a purchaser's right to buy them."
Scalia added, "If one state or political subdivision may enact such rules, then so may any other; and the end result would undo Congress' carefully calibrated regulatory scheme."
"The driving force here was a genuine fear that every county and local agency would come in with their own fleet rules and distort what should have been a uniform national marketplace," said Attorney Carter Phillips, who represented the Engine Manufacturers Association. and the Western States Petroleum Association before the Court.
"In the long run," he predicted, the ruling "should actually be beneficial to the environment, because there have been substantial gains in clean diesel technology, and now those manufacturers have more incentive to pursue those efforts."
The SCAQMD has jurisdiction in the Los Angeles, San Bernardino, Riverside and Orange Counties in Southern California.
Originally published in the June 2004 issue of O&A Marketing News.
Copyright 2004 by KAL Publications Inc.
Serving the 13 Western States, the World's Largest Gasoline, Oil, Fuel, TBA and Automotive Service Market
