TESTIMONY of TOM SMITH, NCPR PRESIDENT
Accompanied by D.G.(Jim) Daskal, General Counsel
Before the United States Senate Committee on Environment and Public Works
Hearing on S. 1084 The Ozone and Particulate Matter Research Act of 1997
October 22, 1997

I am Tom Smith, President of NCPR, the chief advocate of the interests of America's 45,000 mom and pop gasoline retailers, and a Texaco dealer in Griffin, Ga., located just outside the metro Atlanta non-attainment area, but inside what EPA would call an "area of influence's.

NCPR strongly supports S. 1084, the Ozone and Particulate Matter Research Act. We have always supported environmental regulation that has a basis in common sense, and that we can explain to our members in a simple and straightforward manner. While NCPR supported the change to an 8 hour ozone standard, EPA's proposals fail this test.

S. 1084 is necessary legislation, because the Evidence Shows Few If Any Increased Health Benefits; While The Costs of Compliance Are Enormous. A Greater Return of Health Benefits Will Occur If Our Limited Resources Are Spent Elsewhere

The argument that there is no need for the legislation because the compliance deadlines are well off in the future is misleading. Without the legislation, compliance schedules will be dictated by citizens' suits and sanctions threats, well in advance of the deadlines EPA speaks of.

Under the Clean Air Act, once an area reaches a certain level of non-attainment, gasoline retailers are required to implement control strategies such as Stage 2 vapor recovery, enhanced motor vehicle inspection and maintenance, and sale of reformulation gasolines, by reason of the plain language of the statute.

Because the Act mandates control strategies. that can be enforced by citizen suits. and other threats. which will inevitably occur well before the dates EPA is talking about - states will be forced to act NOW if the legislation is not passed.

The threat is so severe that NCPR has had to file suit against EPA alleging that the provisions of the Clean Air Act that mandate certain control strategies are unconstitutional under the 10th Amendment, and a 1997 Supreme Court decision.

While we believe that the Act's provisions are unconstitutional because the legislative and regulatory apparatus of the state is commandeered by EPA, as states must pass authorizing legislation, propose and enact implementing regulations, and then enforce those enactments against the private sector, including the mom and pop retailers we represent; passage of S. 1084 would alleviate the immediate problem, because it allows us time to be sure of what we are doing before we turn the states into puppets whose strings can be pulled by lawsuits and other threats.

Thus, even though EPA has promised to be flexible, the statute, to the extent it is constitutional, ties their hands.

Based on our experience with the motor vehicle I/M debate, our members have deep seated reservations over EPA's "flexibility" promise. To quote Georgia State Representative Mike Evans testifying under oath before the House Commerce Committee in the 104th Congress:

"EPA's assertion that they have been flexible is simply not so. We have not seen it in Georgia, nor do I believe that the other states have seen it either. The only thing we have heard is sanctions. sanctions. sanctions....

It is abundantly clear, in closing, that people across this country do not want and will not accept this consumer unfriendly plan. It is also just as clear that without public support, any plan is bound to fail. Please help us by allowing Georgia to tailor a plan that specifically meets the needs of Georgia." House Hearing No. 104-12 at 307.

We also question the flexibility claims in light of EPA's Position That Changing the Standard DOES Not Implicate SBREFA or Reg Flex - The Change of the Standard Automatically Worsens The Non-Attainment Level Of Many Areas, and Forces These Areas To Adopt Control; Measures That Inflict Substantial Costs on a Significant Number of Small Businesses as a Matter of Law. EPA Has Already Started Playing Games With the "Implementation Process" , Forcing Small Business To Have to Threaten To Walk Out of a March 18 Meeting

We are also disturbed by what appears to be pandering to a given audience, as shown by EPA's claims before the Agriculture Committee to the effect that farmers would be minimally impacted by the new standards. As one with family in farming, and a number of farm based customers', I can tell you they do not share EPA's sunny outlook, rather they correctly fear that higher fuel prices will squeeze already thin farm margins.

As a gasoline retailer, I was deeply disturbed by her remarks that the standards would mean more use of ethanol; blended gasoline, and "good news for farmers". Ethanol blends raise the Reid Vapor Pressure of gasoline, and cannot be used in many non-attainment areas because they will worsen the ozone problem., and EPA's efforts to rewrite the 1990 Amendments by mandating ethanol fuel were struck down by the U.S. Court of Appeals for the D.C. Circuit, therefore, we do not understand what the basis is for this claim, other than political posturing.

The ethanol subsidy itself distorts, and is destructive to competition in the gasoline industry. All it does is allow large chain marketers a government mandated competitive advantage over small "mom and pop" dealers such as myself, while draining the Treasury, and providing little real relief for farmers. We would be better off taking the money and block granting it to the states, or finding a way to ensure that the benefits went to real farmers, not ethanol producers. NCPR would add that any extension of the Highway Bill that extends the ethanol subsidy for another seven years is to us "POISON-TEA" and would force us to oppose the entire bill, though we support CMAQ funding.

As very small locally owned and operated businesses' gasoline dealers limited funds limited resources must be used in a way so as to achieve the maximum environmental bang for the buck.

If EPA moves forward with these regulation, our limited resources will be forced into spending money on technology such as Stage 2 Vapor Recovery, something EPA Administrator Lee Thomas Called "A Costly Technological Redundancy That Will Do Little to Solve the Ozone Problem" - Instead of spending the money on underground tank upgrades required by 1998 in order to protect groundwater. It does not appear that the left hand of EPA knows what the right hand is doing, and that they are willing to "Rob Peter to Pay Paul"; and that the net result will be an environmental detriment, as our members limited resources would be diverted from compliance with the 1998 underground tank regulatory deadline, where they would most benefit human health and the environment.

It is very important that policy makers at all levels of government be aware of the fact that thousands of gasoline station franchise agreements will be coming up for renewal; and franchisers will be required to decide whether or not to make the investment in upgrading the facility. In the event the franchiser decides that it does not wish to make the investment; the Petroleum Marketing Practices Act, 15 U.S.C. 2801, 2802(b)(3)(D), requires that an offer to sell the leased marketing premises be made to the franchisee. As a result, many stations and their tanks will be sold and replaced in the remaining 21 months.

NCPR expects a significant "1998 Bubble" to occur, that will stress the resources of states and their existing underground tank trust funds. and those of our members. who need to be focused on addressing this problem. including moving Sen. Allard's legislation. as opposed to Preparing to implement new air standards. whose benefits are questionable at best.

Gasoline Dealers Have Long Been Involved in the Debate over Clean Air, Primarily Because the Dealer and His Family, as Well as Our Employees and Their Families Breath the Same Air and Drink the Same Water as Our Friends and Neighbors Do. We Sponsor the Little League Teams, Boy and Girl Scout Troops and Other Children's Activities, and Our Children and grandchildren take part in these activities as well. We take exception to those who would use our children as pawns , or try to paint those of us who wish to regulate sensibly as "anti-child' in order to advance their political agendas and ambitions.

S. 1084 passes the common sense test; EPA's new standards do not.