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Article from May 2017

( Note: The following remarks are from a presentation by Jim Collura, vice president and director of legislative affairs for New England Fuel Institute, Lexington, Mass. Collura, who is based in Arlington, Va., gave the presentation during a Fuel Oil News webinar,“ The State of the Industry: Trends, Developments, Challenges.” The remarks have been condensed and edited for space considerations. To access a recording of the complete webinar, visit www. fueloilnews. com and click on“ webinars.”)

“ This is a real period of uncertainty,” says Jim Collura, vice president and director of legislative affairs for the New England Fuel Institute.“ It trickles from inside the Beltway here in D. C. all the way down to local communities and businesses. You need to watch the outcomes of some of these debates because they affect the goals of the industry at large— both the propane and heating oil industries.”

As examples, Collura cites the shift of the heating oil industry toward more efficiently burning renewable product blended with biofuel.“ On the propane side there’ s been a lot of movement toward expanding applications for propane,” he says, such as the use of propane as fuel in the transportation sector.

The ability of the industry to achieve its goals is impacted by the decisions made in local communities, the state governments and in Washington, D. C., Collura says.“ States continue to grapple with some serious issues,” he notes, and“ some big ones are coming up in Washington over the next two to four years.”

Collura takes a moment to state that“ associations are nonpartisan. We don’ t align ourselves with Democrats or Republicans.” [ Note: The webinar was held March 22, before Republicans withdrew a bill that would have repealed and replaced the Affordable Care Act, widely called Obamacare. For that reason, Collura’ s comments on that topic have not been included here. They can be heard on the recording of the webinar available on the Fuel Oil News website.]

“ Tax reform is a big one,” Collura says. Republicans will probably approach tax reform through a process called budget reconciliation, he says, because that will allow them“ to move it through as part of the budget process.” It also would make it possible for the bill to pass in the Senate with a simple majority vote, Collura says.“ Democrats will not be allowed to filibuster,” he notes.

“ The administration and the Republicans in Congress are promising a broad and sweeping rewrite of the federal tax code,” Collura notes.“ On the upside of this they’ re promising a simplification of the tax code. Reductions in the base corporate tax rates and some businessfriendly propositions such as immediate expensing of tangible and intangible properties for businesses. But there are also some things that are potential negatives to watch out for, especially in our industries, heating oil and propane.”

To pay for many of the tax cuts that are envisioned, Collura says,“ House Republicans are talking about transitioning to a territorial-based tax system, which would tax imports through a border-adjustment tax [ of ] approximately 20 percent.”

Collura notes that the American Petroleum Institute and the refining industry say that such a tax could result in an increase in refined petroleum prices of“ 20 or 30 cents per gallon.” Collura adds that experts say the impact of such a tax would extend from crude oil throughout refined petroleum.“ It would also apply to any imported biofuels and also to propane,” he points out.“ So it’ s a big one, and a lot of groups are already lining up in opposition to this.” He predicts,“ It’ s going to be a big fight.”

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