Document 7O3M7wnGDOX6Yg50qVrgbQM3e

.Submittal Via eRidemskiitg Puitul Febiuary 21, 2017 I O'A Packet Culler tl.fi, KnvironuVJrtlrtl Protection Agency 1200 Pennsylvania Ave., NW Mail Code 2822IT Washington, D.C. 20460 Alin; Docket 11) No. BPA-IIQ-OAR-2016-0544 Re: Docket II) No. BPA-IIQ-OAR- -2016 0544 The Oil Price Information Service (OPIS) submits the following comments on Bl'A's Proposed Denial of Petitions for Rulemaking to Change the MBS Point of Obligation. It is important to note at Hie outset that, in filing these comments, OPTS is not taking any position regarding tin; advisability of moving the RFS point of obligation. Rather, OPIS is compelled to file these comments in order to correct the regulatory record in relation to OPIS' involvement in evaluating the potential number of pm lies who could become obligated under the RFS should KPA elect to move the point of obligation to the fuel to initial rack. The BPA's proposed denial, published on November 10, 2016, contains Severn! mischaractcrizations of OBIS' work on this issue and our communications with BPA. These issues arc addressed below tor your consideration. I. About OPIS OPIS, an HIS Maikit company, is one of the world's most comprehensive sources for petroleum pacing and news mfoimation. OPIS began covering petroleum nows in 1977 with the launch of the award-winning Oil Express Newsletter. In 1980, OPIS pioneered "rack" price discovery for thousands of wholesalers, and now maintains the world's most comprehensive database of U.S. wholesale petroleum prices, publishing more than 30,000 rack piiees each clay at over 1,500 terminals in marly 400 lumket locations. In 1981, OPIS began providing spot price assessments for all refined products and later renewable fuels and natural gas liquids. Today, OPIS spot gasoline, diesel, jet fuel, renewable fuels and natural gas liquids prices are highly benchmarked in the U.S. West Const and other key markets. OPIS's refinet y feedstocks and LPG prices are also considered a preferred benchmark by many U.S, ami international tradeis. All OPIS spot and rack prices are available historically to customers via our web-based TimeSeries database. In 1999, OPIS launched the first retail fuel pacing database in Noith Aincdcn. With its unique ability to map retail piiees back to wholesale markets, it quickly launched a retail margin service. OPIS tiov/ receives daily gasoline and diesel prices for nearly 140,000 retail outlets ill the U.S. and Canada. OPIS prices arc used by AAA, Microsoft (MSN Autos), Ciainiiii, MapQuest and dozens of other website and mapping companies, in addition to its core oil company base. 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008530-00001 OPIS is comprised of more than 50 information specialists, including the most experienced editors in the business, combining over 200 years of industry experience. Our editors not only cover the market, and report breaking stories -- but also provide inside analysis on what the trends mean and how they could affect prices and purchasing decisions. They are joined by customer service, sales, marketing, information technology and conference specialists, who strive to provide quality products, services and service to our customer's. Our client list includes the top 200 oil companies, thousands of distributor's, traders, government and commercial buyers and sellers of petroleum products worldwide. II, Background on OI*IS' Work on Point of Obligation In 2016. HIS Global Inc, OPIS' parent company, approached OPIS with a request to compile relevant data sets to evaluate "RFS Obligated and Mon-Obligated Party Lists" on behalf of Monroe Energy, LLC with a focus on developing an independent, noil-biased, third-party analysis of the RFS obligated party count based on the "current" point of obligation.as well as other potential points of obligation including; Blenders, Rack Sellers, and Rack Buyers. To ensure the broadest possible coverage, the data provider! by OPIS to IHS included postal price data for all rack locations covered by OPIS as well as a complete master list of OPIS customers for all RFS-related fuels, including RFG gasoline, conventional gasoline, diesel fuels, and renewable fuels. In 2016, in addition to the IHS request, Valero Energy Corporation (Valero) approached OPIS with a request to compile relevant data sets including: posted price data for all rack locations covered by OPIS as well as a complete master list of OPIS customers for all RFS related fuels. This data included all gasolines (RFG, Conventional, Clear, CBOB's, RBOB's, E15, F.85 etc.), all diesel fuels (ULSD, Clear, Dyed, Bio blends) and all Renewable Fuels (Ethanol/DN, Biodiesel, B99, B100 etc.). Additionally, Valero contracted with OPIS to independently provide detailed rack-posted price information from Januaiy 1, 2012 through May 31, 2016 for an independent third-party analysis by respected industry economic experts who have provided significant economic and analytic support to the EPA on the RFS. III. Kl'A's Misleading Statements Regarding OPIS* Work on Point of Obligation On page 39 of EPA's Proposed Denial, EPA states "We have reviewed Valcro's analysis, and we believe it to be flawed, due principally to their reliance on an incomplete data set (obtained from [OPIS])." EPA then states that they: "independently contacted OPIS, who could not provide verification of Valera's estimate and farther cautioned that using their client list of who posts wholesale rack price to estimate a count ofposition holders would likely beau underestimation because their client list only represents those parties who publicly report fuel prices at terminals (and not parties that sell fuel at the rack without publicly posting prices or who purchase fuel above the rack for their own use rather than for resale)." EFA's depiction above is a complete misreading of OPIS* communications. The statement published by EPA was taken completely out of context and presented by EPA as a standalone fact, without addressing the actual data or methodologies utilized by IHS and Valero. As previously -2- 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008530-00002 indicated, OPIS' parent company HIS did in tact complete an independent analysis of both the cnnenl number of obligated pm ties as well as the number of obligated parlies that would result from moving Ike point of obligation to position-holder's at the terminal rack. While the report was not intended as a verification of Valera's analysis, the results were entirely consistent with Valero's findings as published in their petition (Attachment D -- Master List of Rack Sellers). Consequently, both the; HIS and Valour analysis yielded obligated party counts below the current number of obligated parlies as indicated by EPA. BPA next states the following: "OPIS provided EPA their client list of conventional gasoline suppliers who me rack sellers,..This list confirms that their client list should not be used us the sole source of information to account for all potential pai tics that sell fuel at the rack, and that could become obligated pad tux if the point of obligation were moved." This is again a misleading statement as UFA limited the data requested of OPIS, both in terms of tlio fuels covered and the type of data requested (count of client list only). 'This is in stark contrast to the much broader criteria and multiple data sets requested anil utilized by 1HH and Valero in their analyses. In addition to the OPIS data utilized in the analyses clone by HIS and Valera, OPIS is aware that these patties used several additional data sources to analyze the potential numbers of obligated parlies if the point of obligation were moved as petitioned. These data sources include, but may not be limited to: Part 80: EPA Fuels Programs Registered Compaiiy/Pacility ID List; HI A Company Level Import Data; Valero market research on bulk and rack activity; federal excise tax forms (637s); market information receiver! in the course of discussing the RFS issues with others in the business; and discussions of potential "New Obligated" parlies with SIGMA, ABPA, UFA, NBB, biofuel producers, rack sellers, retailers and other RFS stakeholders. IV. Conclusion ' Whether or not to move the RFS point of obligation is a policy decision that should be based on sound facts regarding the current structure of the program and any proposed changes to that structure. Accordingly, we appreciate! the opportunity to set the facts straight regarding OPIS' work and data provided on this issue and we welcome any further questions the BPA or any other stakeholders have oil this issue. Respectfully submitted, llobcit (tough 17cv1906 Sierra Club v. EPA - 6/22 Production ED_001523 00008530-00003 17cv1906 Sierra Club v. EPA - 6/22 Production ED 001523 00008530-00004