1
John
Huber
<
jhuber@
nora­
oilheat.
org>
11/
24/
2003
09:
20
AM
To:
"'
Leister,
Mike'"
<
MELeister@
MAPLLC.
com>,
Jeff
Herzog/
AA/
USEPA/
US@
EPA,
Andrea.
Grant@
piperrudnick.
com,
ddoane@
ilta.
org,
dgilligan@
pmaa.
org,
LidiakP@
api.
org,
Charlie_
Drevna@
npradc.
org,
BBrown@
ColPipe.
com,
MJoy@
AOPL.
com,
GScott@
colliershannon.
com
cc:
JScandola@
buckeye.
com
Subject:
RE:
Suggested
revision
to
proposed
heating
oil
marker
requirement
Jeff/
Mike
My
suggestion
on
removing
PADD
1
from
the
credit
trading
program
is
not
without
problems.
My
suggestion
was
premised
on
the
fact
that
a
marker
would
be
used
in
the
credit
fuel.

In
suggesting
PADD
1
be
eliminated,
my
thoughts
were
to
remove
real
costs
that
would
definitely
accrue
in
an
area
due
to
both
the
costs
of
the
marker
and
the
physical
changes
that
would
occur.
These
costs
are
significant
in
the
northeast
due
to
the
concentration
of
heating
oil.
These
costs
will
be
imposed
on
the
program
in
an
effort
to
ensure
that
credits
could
be
traded
in
this
region.
However,
we
do
not
know
the
extent
of
the
trading,
and
how
eliminating
the
northeast
would
affect
the
value
of
the
credits.

My
view
was
merely
to
try
to
eliminate
real
costs
that
are
being
offset
by
theoretical
gains
or
a
trading
program
that
may
not
be
widespread.

John
­­­­­
Original
Message­­­­­
From:
Leister,
Mike
[
mailto:
MELeister@
MAPLLC.
com]
Sent:
Wednesday,
November
12,
2003
4:
27
PM
To:
Herzog.
Jeff@
epamail.
epa.
gov;
Andrea.
Grant@
piperrudnick.
com;
ddoane@
ilta.
org;
dgilligan@
pmaa.
org;
LidiakP@
api.
org;
Charlie_
Drevna@
npradc.
org;
BBrown@
ColPipe.
com;
MJoy@
AOPL.
com;
GScott@
colliershannon.
com
Cc:
jhuber@
nora­
oilheat.
org;
JScandola@
buckeye.
com
Subject:
RE:
Suggested
revision
to
proposed
heating
oil
marker
requirement
Jeff,
I
believe
that
dropping
the
marker
requirement
in
only
a
single
PADD
is
problematic
and
the
main
problem
is
the
areas
adjacent
to
other
PADD's,
which
is
the
conclusion
that
you
seem
to
have
reached.
While
there
may
be
solutions
that
minimize
these
problems,
simply
moving
the
lines
doesn't
really
solve
the
problem.
It
looks
like
you
have
tried
to
select
an
area
which
does
not
have
small
refineries
but
that
doesn't
mean
that
small
refinery
products
don't
flow
into
these
areas.
Also
putting
geographic
limitations
on
the
generation
of
credits,
can
have
a
significant
impact
on
the
utility
of
the
credit
trading
program.
Finally,
going
to
sub­
PADD
areas
or
parts
of
sub­
PADD
areas
would
seem
to
add
quite
a
bit
of
confusion
to
a
rule
that
is
already
very
complex.
At
a
minimum,
you
need
to
look
at
every
terminal
that
supplies
the
2
border
region
and
draw
the
lines
so
that
terminals
and
a
majority
of
the
areas
they
supply
are
both
on
the
same
side
of
the
line.
An
alternative
that
I
would
ask
you
to
consider,
would
be
the
more
detailed
tracking
of
small
refiner
and
credit
high
sulfur
diesel.
Since
these
volumes
are
likely
to
be
much
smaller
than
heating
oil
and
they
are
likely
to
be
moved
on
an
exception
basis,
it
may
not
be
unreasonable
for
the
small
refiner
or
credit
documentation
to
follow
this
material
to
the
user
tank
level.
If
EPA
finds
that
sulfur
above
500
ppm
is
present
in
diesel
fuel
used
by
construction,
agriculture,
marine
or
locomotives,
they
simply
need
to
verify
that
the
tank
supplying
this
fuel
only
received
properly
documented
small
refiner
or
credit
high
sulfur
NRLM
or
<
500
ppm
NRLM.
Receiving
heating
oil
into
these
tanks
would
be
a
violation.
This
situation
would
only
exist
for
three
years
and
the
same
procedures
could
be
used
to
continue
to
track
locomotive
and
Marine
diesel
after
6/
1/
2010.
An
independent
audit
could
be
conducted
to
verify
that
no
heating
oil
is
delivered
into
these
tanks.

Mike
­­­­­
Original
Message­­­­­
From:
Herzog.
Jeff@
epamail.
epa.
gov
[
mailto:
Herzog.
Jeff@
epamail.
epa.
gov]
Sent:
Wednesday,
November
12,
2003
3:
32
PM
To:
Andrea.
Grant@
piperrudnick.
com;
ddoane@
ilta.
org;
dgilligan@
pmaa.
org;
LidiakP@
api.
org;
Leister,
Mike;
Charlie_
Drevna@
npradc.
org;
BBrown@
ColPipe.
com;
MJoy@
AOPL.
com;
GScott@
colliershannon.
com
Cc:
jhuber@
nora­
oilheat.
org;
JScandola@
buckeye.
com
Subject:
Suggested
revision
to
proposed
heating
oil
marker
requirement
Gentlefolk,
I
have
been
exploring
the
idea
raised
by
industry
of
excluding
parts
of
PADD
1
from
the
proposed
heating
oil
marker
requirements
(
for
2007­
2010)
a
bit
further.

Under
such
an
approach:
­
Terminals
in
the
exclusion
area
would
not
be
required
to
add
the
marker
to
heating
oil.
­
Terminals
outside
of
the
area
would
be
required
to
add
the
marker
to
heating
oil.
­
No
high
sulfur
(>
500
ppm)
small
refiner
or
credit
NRLM
could
be
used
in
the
exclusion
area.
All
high
sulfur
fuel
(>
500
ppm)
would
be
for
use
as
heating
oil
only.

John
Huber
of
NORA
also
suggested
such
an
approach
in
written
comments
that
he
filed
to
the
NR
rule
docket
this
week.
I
think
that
we
might
also
have
to
put
in
place
some
restrictions
on
bulk
shipments
(
by
pipeline
and
barge)
of
unmarked
heating
oil
out
of
the
exclusion
area.
Its
currently
unclear
to
me
whether
we
would
also
need
to
put
in
place
restrictions
on
the
shipment
by
truck
of
unmarked
heating
oil
out
of
the
exclusion
area.

If
we
were
to
take
such
an
approach,
my
initial
evaluation
3
suggests
that
the
following
area
might
be
the
best
fit
wrt
to
reducing
the
potential
costs
of
the
proposed
heating
oil
marker
requirement
while
maintaining
the
potential
benefits
of
the
proposed
small
refiner
and
credit
provisions:
>>>>
No
marker
would
required
in
heating
oil
(
and
no
high
sulfur
small
refiner
and
credit
NRLM
fuel)
in
PADDs
1A
and
1B
except
the
area
in
PADDs
1A
and
1B
which
also
belongs
to
"
Appalachian
No.
1"
(
i.
e.
Western
NY,
and
PA,
and
West
Virginia).

Any
thoughts?

I
also
asked
Jim
Scandola
(
of
Buckeye
pipeline)
and
John
Huber
for
their
input.
Feel
free
to
respond
by
e­
mail
or
to
give
me
a
call.
I
plan
to
docket
any
exchange
of
e­
mails
on
the
subject.
Please
don't
read
too
much
into
this.
We
just
want
to
flesh
the
idea
out
so
we
can
evaluate
it
fully.

Best
Regards
Jeffrey
A.
Herzog,
Mechanical
Engineer
United
States
Environmental
Protection
Agency
National
Vehicle
and
Fuel
Emissions
Laboratory
Assessment
and
Standards
Division
2000
Traverwood
Drive
Ann
Arbor,
Michigan,
48105
Phone:
(
734)
214­
4227
Fax:
(
734)
214­
4816
E­
Mail:
herzog.
jeff@
epa.
gov
