Reminder - EMA Regulatory Alert: EPA Region 6 Initiates SPCC Enforcement Sweep
EMA learned yesterday that EPA Region 6 has launched a coordinated enforcement sweep targeting Spill Prevention, Control, and Countermeasure (SPCC) compliance at oil-handling facilities across Arkansas, Louisiana, New Mexico, Oklahoma, and Texas. The initiative involves announced and unannounced inspections, document requests under the Clean Water Act, and accelerated civil penalty referrals. Petroleum marketers with facilities subject to SPCC anywhere in EPA Region 6 should expect heightened scrutiny in the coming weeks and months.
Background
The sweep is understood to be EPA’s response to public criticism following the August 2025 explosion and fire at the Smitty’s Supply facility in Roseland, Louisiana. That incident, which prompted evacuations and caused significant surface-water impacts, has focused attention on perceived gaps in federal oversight of bulk petroleum storage operations. Subsequent EPA RCRA findings, DOJ civil litigation, and an active EPA/FBI criminal investigation have made the Smitty’s matter a touchstone for more aggressive SPCC enforcement. Although Smitty’s is a lubricant blender, EPA Region 6 inspectors are expected to apply the same heightened posture to all above-ground oil storage facilities within the Region—including fuel terminals and bulk plants to demonstrate that agency oversight is, in fact, robust.
Why This Matters to EMA Marketers
Petroleum marketers operate precisely the type of facilities EPA Region 6 is prioritizing: bulk fuel terminals, jobber bulk plants, loading and unloading racks, transport-truck staging areas, and commercial fueling locations with above-ground storage. SPCC penalties are assessed per day, per violation, with statutory maximums currently exceeding $66,000 per day. EPA inspectors will be looking for a current SPCC Plan, Professional Engineer (PE) certification where required, secondary containment sufficient to hold the largest single container plus precipitation, integrity testing records, employee training documentation, loading/unloading area protections, and timely Plan amendments following facility changes.
Members should also be aware that an SPCC inspection can readily expand into adjacent regulatory areas—UST compliance, Facility Response Plan obligations, EPCRA Tier II reporting, and stormwater permitting—particularly if inspectors observe conditions inconsistent with the facility’s current paperwork.
Recommended Member Action Steps
Pull and re-read your SPCC Plan. Confirm it accurately reflects current tank inventory, container locations, transfer points, loading racks, and drainage pathways. Plans more than five years old without documented reviews and technical amendments are red flags to inspectors.
Verify PE certification is current. Tier II facilities (most petroleum marketing bulk plants and terminals) require PE certification of the Plan and any technical amendments. Self-certification is permitted only for qualifying Tier I facilities under 10,000 gallons of aggregate above-ground storage.
Walk the facility against the SPCC Plan. Confirm secondary containment integrity, drainage controls, overfill prevention, loading/unloading area protections, transfer-hose management, and fence and security measures match what the Plan describes. Pay particular attention to dispenser islands, transport offload points, and any recent tank or piping changes.
Audit your records. Tank integrity tests, monthly visual inspections, annual training documentation, and discharge reports must be retrievable on request. Missing or incomplete records are the most common citation in SPCC inspections and the easiest violation for an inspector to document.
Brief your facility personnel. Identify who is authorized to receive an inspector, accompany the walk-through, and produce records. Ensure the designated person knows to contact counsel before providing substantive responses to EPA information requests or signing any inspection-closing documents.
Determine whether a Facility Response Plan (FRP) is required. Substantial-harm facilities must self-certify and submit an FRP. Reassess your status if storage capacity, location, spill history, or proximity to navigable waters has changed—particularly relevant for terminals and larger bulk plants near rivers, bayous, or coastal waters in Region 6.
Coordinate with UST compliance. For sites with both AST and UST systems, ensure SPCC Plan facility diagrams, release-response procedures, and personnel training are consistent with UST operator training and Class A/B/C designations. Inspectors increasingly cross-check the two programs.
On April 30, the House of Representatives passed the Republican-led farm bill by a vote of 224-200, marking the most significant progress on such legislation since the 2018 reauthorization. While the bill received crucial support from some moderate and rural Democrats, it still faces significant challenges in the Senate due to deep-seated policy disagreements. The path forward remains uncertain, as Democratic leaders aim to delay or reverse the proposed cuts to food assistance programs. House Democrats, including ranking member Angie Craig (D-MN), are looking to the Senate to produce a more bipartisan version that removes what they describe as “poison pills” regarding pesticide and livestock provisions. Senate Agriculture Committee Chair John Boozman (R-AK) has indicated that he expects to strip away controversial elements to meet the 60-vote threshold required for passage, with a goal of moving the legislation forward within weeks rather than months.
Most importantly, due to significant disagreements, a separate plan regarding year-round E15 fuel sales was decoupled from the main bill and will be voted on independently on May 13. This move was intended to placate oil-state lawmakers who had threatened to block the broader package. The farm bill was delayed earlier in the week due to an internal revolt over several contentious policy issues. The central point of contention was the proposal to permit year-round, nationwide sales of E15 fuel. While supported by many farm-state lawmakers, the measure was opposed by small refineries and their allies, who argue that it would leave them vulnerable to compliance costs. A coalition of small and independent refineries wrote to Speaker of the House Mike Johnson (R-LA) to express their strong opposition to the year-round sale of E15. They argue that the amendment would benefit large, integrated oil companies while causing “tremendous economic harm” to smaller, more vulnerable refineries. While the companies state that they do not oppose biofuels, they advocate for balanced RFS reform that would enable year-round E15 sales and provide relief from high RIN prices, which they estimate currently add 35 cents or more per gallon to fuel costs.
Furthermore, a Congressional Budget Office (CBO) estimate found that the E15 plan would add billions of dollars to the federal deficit. This alienated fiscal hawks and undermined efforts to keep the farm bill budget-neutral. Beyond ethanol, the bill faced a significant challenge regarding pesticide preemption language. Other proposed amendments that contributed to the legislative gridlock included changes to SNAP eligibility for hot food, bans on certain animal testing, and the removal of emissions mandates on farm equipment. EMA and a coalition of other major retailer associations strongly oppose proposed restrictions on items like soft drinks or candy, citing $1.6 billion in upfront compliance costs and significant administrative hurdles. They contend that vague definitions and the constant introduction of new products would make these restrictions impossible to manage at the point of sale, ultimately risking higher prices and reduced food access for SNAP recipients.
Also on April 30, Congress ended a record-breaking 76-day shutdown of the Department of Homeland Security (DHS) by passing a bipartisan bill to restore funding to most of its agencies. This measure, which President Trump is expected to sign, provides full funding through September for the Coast Guard, TSA, Secret Service, FEMA, and the Cybersecurity and Infrastructure Security Agency (CISA). Notably, the legislation excludes funding for immigration enforcement agencies, specifically Immigration and Customs Enforcement (ICE) and Border Patrol. Republicans intend to address those agencies through a separate, party-line package by June 1, using special budget powers to bypass the Senate filibuster.
Temporary Rule Issued for IRC §6435 Dyed Fuel Refunds
Today, the Treasury Department and the IRS issued a temporary regulation, together with a notice of proposed rulemaking, implementing new Internal Revenue Code §6435. The temporary rule addresses a narrow and specific transaction -- clear (undyed) diesel fuel or kerosene on which the §4081 federal excise tax has been paid, that is subsequently indelibly dyed at a terminal and removed for a nontaxable use. Section 6435, created by last year’s One Big, Beautiful Bill, establishes a new statutory refund mechanism for the tax paid on that fuel, applicable to eligible dyed fuel removed on or after December 31, 2025.
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On March 13, 2026, the U.S. Court of Appeals for the Fifth Circuit vacated EPA's 2023 disapproval of Texas's Good Neighbor State Implementation Plan (SIP) under the Clean Air Act, remanding the matter to EPA for reconsideration. While the decision is procedural in nature — and its long-term regulatory consequences remain genuinely uncertain — it is a meaningful development worth tracking. Depending on how EPA responds on remand, it could open the door to regulatory relief for fuel distribution sources in Texas and potentially other states whose SIPs were similarly disapproved.
The Good Neighbor Provision and the Fuel Distribution Chain
The Clean Air Act's Good Neighbor Provision requires each state to ensure its emissions do not significantly contribute to nonattainment or interfere with air quality maintenance in downwind states. When EPA determines a state has failed to meet that obligation, it can disapprove the state's SIP and impose a Federal Implementation Plan (FIP) — a federally mandated set of emission controls that substitutes for the state's own plan.
For the fuel distribution industry, Good Neighbor SIP obligations are not abstract. The emission controls implicated in these plans regulate operations at every level of the supply chain. At bulk terminals and wholesale distribution facilities, SIP controls typically require vapor recovery and collection systems on tank truck loading operations, leak detection and repair programs, and NOx and VOC emission limits tied to throughput. At the retail level, Stage I vapor recovery requirements — governing the transfer of gasoline from delivery trucks to underground storage tanks — remain embedded in many state SIPs, and stations in nonattainment areas can face enhanced equipment standards and periodic compliance obligations.
In February 2023, EPA disapproved SIPs submitted by 21 states across every region of the country, concluding they failed to meet Good Neighbor obligations for the 2015 ozone standard. Those disapprovals were the legal predicate for EPA's Good Neighbor Plan FIP, which would have imposed significant NOx emission reductions on industrial sources in disapproved states, including fuel terminals and combustion sources in the petroleum distribution chain.
Courts Opinion
The Fifth Circuit's vacatur is grounded in a narrow but important procedural problem. In its appellate briefing, EPA represented to the court that post-submission modeling data — the "2016v3" dataset published after Texas filed its SIP — was merely corroborative and not the actual basis for the disapproval. The court initially accepted that representation. However, EPA's own January 30, 2026 proposed rule directly contradicted that position, acknowledging that the 2016v3 modeling was in fact integral to the disapproval of Texas and 20 other states. Faced with that admission, the court withdrew its prior opinion and vacated the disapproval, concluding it could no longer be confident EPA had evaluated Texas's SIP on its own merits rather than against a post-hoc modeling standard the state never had a fair opportunity to address.
Importantly, the court did not resolve the deeper statutory question of whether EPA's 0.70 ppb screening threshold — representing 1% of the 2015 ozone NAAQS — is a lawful interpretation of the phrase "contribute significantly." With EPA actively reconsidering that threshold in its January 2026 proposed rule, the court deferred that question to the remand process.
The outcome on remand will depend heavily on which screening threshold EPA ultimately adopts and how it handles post-submission data going forward. If EPA shifts to a more permissive threshold — the January 2026 proposed rule floats 1 ppb and even 5% as alternatives — Texas's SIP contributions, which its own modeling showed were between 0.71% and 1.21% to Colorado receptors, could fall below the screen entirely, resulting in approval without additional controls. But that is a possibility, not a certainty.
More broadly, the answer to such a legal question will matter considerably for which states face Good Neighbor obligations going forward. Accordingly, it’s possible that more litigation from environmental groups and even states can be on the horizon. Additionally, the court clearly noted that EPA has full authority and wide discretion to evaluate SIPs under a defensible methodology.
A Regulatory Development Worth Monitoring
In the near term, sources covered by the Good Neighbor Plan face no active federal NOx control mandates. The Supreme Court's nationwide stay in Ohio v. EPA (2024) halted enforcement pending D.C. Circuit review, and the current EPA has since placed all related litigation in abeyance while it actively reconsiders the rule. EPA's January 2026 proposed rule — which would approve eight states' SIPs outright and signals a broader rollback — suggests the regulatory trajectory is moving in a favorable direction for the industry.
That said, the picture is not without uncertainty. The remand process for Texas and other states remains ongoing, and any final rule EPA issues on reconsideration is likely to face legal challenge. The durability of any regulatory relief will ultimately depend on how those challenges fare.
EMA will continue to monitor these developments and keep members informed as the picture becomes clearer.
EMA Submits Strong Comments Backing DOL’s Proposed Independent Contractor Rule
Energy Marketers of America (EMA) today announced
that it has filed formal comments with the Department of Labor
strongly endorsing the proposed rule to rescind the 2024 independent
contractor regulation and reinstate a streamlined, modified version
of the 2021 rule. The proposal would apply consistently across the
Fair Labor Standards Act, Family and Medical Leave Act, and Migrant
and Seasonal Agricultural Worker Protection Act. In its submission,
EMA highlighted how independent contractor arrangements remain vital
to the daily operations of energy marketing companies nationwide.
“Our members depend on these flexible relationships to handle
critical tasks including fuel deliveries, facility maintenance and
inspections, construction projects, technology support, and
specialized services,” the association noted. EMA stressed that
straightforward, practical guidance on worker classification is
crucial for maintaining proven business practices while meeting all
federal labor obligations.
EMA praised the proposal for properly focusing on “economic
dependence” as the key test for independent contractor status—asking
whether a worker is truly operating their own business or is
economically reliant on the employer. The association emphasized
that reinstating the 2021 rule’s core factors—particularly the
degree of control and the opportunity for profit or loss—provides
the clarity businesses need to make accurate classification
decisions.
“Over the past five years, frequent shifts in the
worker classification standard have created confusion, added
compliance costs, and created unnecessary risk—especially for small
and mid-sized energy marketers,” EMA stated. The association called
on the Department of Labor to move quickly to finalize the rule and
deliver long-overdue stability to the industry.
Bipartisan Bill Introduced to Restore Biodiesel Blenders’ Tax Credit
On Tuesday, Rep. Mike Carey (R-OH) introduced the “Biodiesel Tax
Credit Extension Act of 2026,” bipartisan legislation to restore the
Section 40A biodiesel blenders’ tax credit at $1 per gallon through
December 31, 2029. Under the bill, eligible taxpayers could choose to
claim either the restored blenders’ credit or the 45Z Clean Fuel
Production Credit, whichever best aligns with their business model. The
measure would not apply retroactively.
Energy Marketers of America (EMA) supports the legislation, emphasizing
its role in lowering fuel costs for consumers while accelerating the
deployment of cleaner-burning renewable fuels across the country.
The $1-per-gallon biodiesel blenders’ tax credit is essential to
delivering more affordable, lower-carbon fuel options. The bill enables
energy marketers to continue expanding access to BioHeat® fuel blends
ranging from B5 to B20 and a practical, incremental pathway toward
higher biodiesel adoption alongside next-generation heating
technologies.
At a time of sustained energy price volatility and persistent
inflationary pressures, the legislation would help stabilize fuel costs
for households and businesses that rely on home heating oil, diesel, and
related products. It also reinforces continued growth in the renewable
fuels sector, including renewable diesel, which is fully compatible with
existing fuel infrastructure, including underground storage tanks and
conventional heating systems.
The legislation enjoys broad bipartisan support in the House of
Representatives. Original cosponsors include:
Republicans: Reps. Andrew Garbarino (NY), Ashley Hinson (IA), Dusty Johnson (SD), Mike Kelly (PA), Darin LaHood (IL), Tracey Mann (KS), Claudia Tenney (NY), and Mariannette Miller-Meeks (IA)
Democrats: Reps. Salud Carbajal (CA), Lou Correa (CA), and Jim Costa (CA)
EMA urges Congress to act swiftly to pass the Biodiesel Tax Credit Extension Act of 2026, underscoring the importance of policy certainty to sustain domestic renewable fuel production, support small businesses, and deliver tangible savings to American consumers.
On Wednesday, DOE released an advisory on cyber threats to
automatic tank gauges (ATGs) and asked that we share the memo with marketers to
assist in the prevention of attacks. The DOE Energy Threat Analysis Center
(ETAC) Threat Memo on ATG Manipulation by Malicious Cyber Threats is available
via EMA. To receive a copy, contact Sherri Stone at sstone@emamerica.org.
EMA was first alerted to potential attacks on ATGs by the Tennessee Fuel &
Convenience Store Association (TFCA) earlier this month. EMA and TFCA
subsequently worked with DOE Cybersecurity, Energy Security and Emergency
Response (CESER) and DHS Cybersecurity and Infrastructure Security Agency (CISA)
to coordinate mitigation efforts and communication.
These types of
threats exploit very basic cybersecurity deficiencies, and organizations that
have this problem may also have vulnerabilities in other systems/equipment. EMA
urges its members to take advantage of the DHS Cybersecurity and Infrastructure
Security Agency (CISA) no-cost services to shore up cyber deficiencies at No-Cost
Cybersecurity Services & Tools | CISA.
The EMA MDF will hold a raffle during the Washington, DC May 13-15 conference. The winner will be identified on May 15, and the winner does not have to be present to win. If you are not attending the conference and you are the raffle winner, you will be notified the week following the May drawing.
The iPad Pro built for Apple intelligence delivers outrageous performance for effortless productivity and advanced AI workflows. With a stunning Ultra Retina XDR display, superfast Wi-Fi 7 and 5G Cellular, neural accelerators for AI workloads, and a redesigned iPadOS, there’s no limit to what you can do with iPad Pro. Paired with Apple Pencil Pro and Magic Keyboard for iPad Pro, it brings endless versatility, creativity, and productivity to your fingertips.
The proceeds of the raffle will benefit the EMA MDF. Tickets are $25 each or five for $100. Advanced tickets are available until May 12. Ticket sales will continue at EMA’s conference in Washington, DC until the drawing on May 15. Tickets can be purchased with personal or corporate funds by MasterCard, VISA, American Express, cash or check (checks should be made out to the Energy Marketers of America Marketer Defense Fund).
You can donate online by clicking here. To purchase tickets before May 13, please email a completed MDF Raffle form to Sabrina Pitcher so that we can place your name on a raffle ticket.
April 2026 Contributors to EMA MDF
EMA’s Marketer Defense Fund (MDF) committee wants to thank the following individuals for their MDF contributions during the April 1-30, 2026 timeframe:
California:
Nathan Crum, Valley Pacific Petroleum
Connecticut:
David Foster, Wilcox Energy
Illinois:
Matt Schrimpf, HWRT Oil Company, LLC
Indiana:
Trout Moser, National Oil & Gas, Inc.
Iowa:
Dave Reif, Reif Oil Company
John Maynes, FUELIOWA
Kentucky:
Matthew Yancy, Hinderliter Construction, Inc.
Louisiana:
Darrel McCartney, W.B. McCartney Oil Company, Inc.
Johnny Milazzo, Lard Oil Co., Inc.
Michigan:
Robert Hohn, Paxson Oil Company
Minnesota:
Brent Staples, Best Oil Cooperative
Brent Staples, Staples Oil Company, Inc.
Mississippi:
Philip Chamblee, MPMCSA
Kirk Dickerson, Dickerson Petroleum, Inc.
Missouri:
Stephen Ayers, Ayers Oil Company
North Carolina:
Audrey L. Shearin, Eastern Petroleum Corp.
Oregon:
John Truax, Truax Corporation
Pennsylvania:
Dell Cromie, Glassmere Fuel Service
Tennessee:
Mark Radosevich, PetroProperties & Finance, LLC
Washington:
Brad Bell, Co-Energy | A Connell Oil Incorporated Company
Corporate donations are acceptable. MDF funds have been used to create a COVID-19 Situational Update & Resources webpage, to hire experts to cover important regulatory agencies and disaster relief dedicated to strengthening our lobbying efforts on Capitol Hill. Click here to donate to the EMA MDF.
Oil prices fall on report Iran sent response to draft peace agreement | CNBC
Trump gives the go-ahead for a major new Canada-U.S. oil pipeline | AP
Union Pacific, Norfolk Southern file revised merger application | FreightWaves
California oil fight tests state's right to push back against Washington during war | PBS
Most Oil Execs See USA Oil Output Increasing Due to War | Rigzone
Federated Insurance: It’s Your Life
Do You Know the Value of Your Business?
If you were asked today, “What’s the value of your business?” would you have a confident answer?
For many business owners, determining value can feel overwhelming. There are multiple methods to consider, like book value; adjusted book value; Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) approaches; sales multiples; or capitalized earnings.
The method that works best for you may depend on your company’s unique characteristics. While some businesses are assessed based on assets and liabilities, others are driven by cash flow and profitability. Deciding where to begin is often the hardest part.
Why Should You Know Your Business Value?
Understanding your business’ value is a critical piece of your planning foundation. For many, the business is their largest financial asset. Knowing an estimated value is vital for creating a buy-sell agreement, planning for retirement, preparing an estate plan, or managing ownership transitions in the future.
A clear understanding of value helps reduce uncertainty and can minimize potential disputes between partners or family members. But formal business valuations, while accurate, can be expensive and time consuming.
A Practical Solution
Federated Insurance® offers Value EstimatorSM, a service designed to provide an informal business valuation. It’s a practical starting point that helps frame conversations with your attorney, accountant, and trusted advisors. Whether you’re considering business succession, estate plans, or an exit strategy, Value Estimator helps you understand what your business might be worth.
Take the Next Step
To learn more about how Value Estimator can support your planning efforts, contact your Federated® marketing representative or contact your Federated regional representative or EMA’s National Account Executive Jack West at 262.719.7750 for any additional information or risk management questions. Start building a clearer picture of your business’s value today. Federated is a Partner in EMA’s Board of Directors Council.
At Federated Insurance, It’s Our Business to Protect Yours®
This article is for general information and risk prevention only and should not be considered an offer of insurance or legal, financial, tax, or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all losses. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. This information is current as of its publication date and is subject to change. Some of the services referenced herein are provided by third parties wholly independent of Federated. Federated provides access to these services with the understanding that neither Federated nor its employees provide legal or other expert advice. All products and services not available in all states. Qualified counsel should be sought with questions specific to your circumstances. All rights reserved.