1RFGSAOverview

Title – RFGSA TechComm

RFGSurveyAssociationOverview- 2017

FCL updated 5/23/17

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Agenda

• Overview/Background– RoleoftheRFGSA

• Regulations• Methodology• Funding/Dues• Summary- Whydoesitwork?• ContactInformation

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RFGSA Overview

• “Independent” - NotForProfit– 501c(6)– Members:Refiners,Producers,importers,blenders,fuelsuppliers

• Design/ImplementalternativeIndustryfuelcomplianceprograms- meetorexceedregulationsrequirements

• Industry- Flexibility/Efficientcompliance• EPA- Effectivecompliance- betterinformationonconformance

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RFGSA Overview

• ProgramsareGovernmentapproved• Statistical/Performancebased• Managedviacompliancesystemwebsite• Participationvoluntary• IndustryFunded

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RFGSA Background

• CleanAirAct(CAA)- 1990- ReformulatedGasoline/Anti-dumping– Opportunityfor“Industry” RFGcompliance

• AmericanPetroleumInstitute(API)/NationalPetroleumRefinersAssociation(NPRA)– Studies• Feasibility/OrganizationalOptions/Costs

–Membersvoted- createindependentorganization– Start-upfunding

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RFG Survey Association Inc• FormedinAugust1994• “Independent” NotForProfit- 501c(6)– Nolobbying*– 38FoundingMembers- Refiners,Importers,blenders

– F.C.Lenski– ElectedPresident– Operationscommenced01/95

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RFG Survey Association - Mission

• Toprovideindependent,highqualityandefficientprogramsandservicestosatisfythefuelcompliancerequirementsoffuelsIndustryandgovernmentalagencies.

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RFG Survey Association Organization

• Efficient/EffectiveBusinessModel• LeveragesResources

– MinimizeMembertime

• LowCost– Outsourced

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Association Operations

• OperateNationwideandUSterritories• 48MemberCompanies+– 170+programparticipants

• 5 Programs– Federal,AZ,Ethanol,ULSD,E15• EthanolFlexFuelProposedRule- 1/2018

• ForProfitSubsidiary– RFGServicesInc.- Inactive

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Scope of Operations • RFGComplianceSurveys– 1995-present– Phoenix(’98),St.Louis(’99),SanJoaquin(’03)

• CAOxygenComplianceSurveys– 1996-2006• AZCBGProgram- 1999-present• EthanolDownstreamQAProgram– 2003- AllRFGsurveyareas01/06- present

• AZEthanolQAProgram- 2006- present• ULSDTestingProgram– 10/06– present• EthanolBlendingProgram(E15)– 7/12-present• EthanolFlexFuels(EFF)– 01/2018– Pending• FuelsSurveysConsolidationInitiative- TBA

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RFG Survey AssociationRole/Objectives

• Independent– Objectivesdriven– Robustprogramdesigns

• Efficient/effective– Unbiased

• Consultative/Collaborative– Resource

• Proactive

RFGSA

EPAIndustry

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Regulations

• Compliance– Liability

• ComplianceRegulations– Federal– AZ

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Compliance Overview

• Objectivedriven• Necessary- fiduciaryresponsibly- measured

• Identify/promptlycorrect• CreateIncentivesforpropercompliance/penalize

• Measured- monitored• Multi-faceted• Costly- Companies/Government• Ineffective/Inefficient

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Compliance Liability

• Refiners/Producers/Importers/Blendersareprimarilyresponsibleforfuelcompliance– Trackbacktosupplier/producer

• Concept“Presumptiveliability”– assumeseveryoneisthedistributionsystemisliable- untilprovenotherwise

– requirementsalongthesystem

• Resourcestoensurecompliance

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Federal – Compliance Regulations

• 40CFRPart80• RFGComplianceon“average” vs.“pergallon” -oneormorerequirements§80.41

• ComplianceSurveys- §80.67,§80.68• Ethanol- Downstreamoxygenateblending-Qualityassurancetesting- §80.69(a)(6)&(7)

• ULSD- SamplingandTestingDefenseElements– BrandedRefiner,distributorandfuelsupplier• §80.613

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Federal Compliance Regulations

• E15- FuelPartialWavier– approvedfor2001+vehicles- MitigateMis-fueling– Gasoline>10ethanolvolumepercent- §80.1501-08

• EthanolFlexFuel– REGRule– 10/2016–scheduledimplementation– 01/2018-§80.1561-2– EthanolBulkBlenders,Blenders,SiteBlenders– LeverageexistingE15survey– FuelsSurveyConsolidationconcept

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AZ Regulations - Compliance

• R20-2-751- Averagestandards• R20-2-755- Downstreamoxygenateblending-Nov-March31

• R20-2-760- ComplianceSurveys- June-Sept.15

Survey Participation - Benefits

• EstablishAffirmativeDefenses• Programspecificbenefits– Avg.vs.Pergallon,Additionaltesttolerance

• StandardizedCompliance• Lowestcostoption• RFGSA/EPAInterface– ComplianceStreamlining

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Methodology

• ProgramDevelopment• SurveyDesign• Field/LabOperations• QualityControl

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Program Development - Overview• ExaminationofRegulations– Opportunitiesformoreeffective&efficientcompliance

• Developconcept/plans– PresentOptions- Association/Industry/EPA- buy-in

–Work- IndustryAssociations- makeformalrequests- interimapprovals(Enforcementtools)

• ProgramAdministration/Implementation• Regulation– complianceoptimizationoptions

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RFGSA OperationsSurvey Design

• SurveyDesignPlans– Annually- PerformanceBased- Conservative• Enduserbased

• Methodology– StatisticalDesign– “Representative” allgasoline• MarketShareequivalent”

– Sampleselection- Random• ProbabilityProportionaltoSize(PPS)

– Weighted– basedonvolume

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Field Operations - Database

• Sources– Census/Programdata/Fleet/CCsources/Members/Internet

• Structure- Strata/Clusters/byProgram• DenselyPopulatedAreas(DPA),Trans.routes,Rural• Clusters- Population,size,SScounts• Weighted(i.e.volumes)

• Dynamic- Updated- ongoing,fullupdates– (2-3yrs.)- 2016

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Field Operations

• RetailSampling- EndUser• IndependentContractors(IC’s)– No“member” affiliation

• Web-basedtrainingPrograms– “Certified” everytwoyears- ornotselected

• Problemsinfield- “Exceptions”– Performanceaudited&tracked

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Lab Operations - Testing

• IndependentLabOperations• Confidentialityagreements• TierIIIcompliant• ISOcertified9001/17025certified• DesignatedTestmethods• EPA&QALabCorrelation• Automated• IndustryResource

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Reporting/Compliance System

• Reporting/Compliancedoneviawebsite– Detailreports- directretail– Aggregate- Industrytracking– Non-Compliance(PNC)• Expeditedschedule

• Compliancesystem- documentandrespondPotentialnon-compliance(PNC’s)

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Quality Control Process

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Audit Operations

• Field/LabOperations– Independentauditors– EPA&QALabCorrelation– IndustryCorrelations– ExceptionsTracking

• TrainingIssues• TechnicalCommitteeMeetings• RFGSA- FinancialAudit

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Funding/Dues

• Programparticipatingcompanies• Minimumprogramdues• Duesbasis- volume/persitefee/other• Estimatedexpenses• AnnualReconcilation- “verified” - actualexpenses- estimates(pgm)

• AnnualFinancialAuditRFGSA

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SummaryWhy Does it Work ?

• AlternativeIndustryfuelcomplianceoptions-designed/implementedbytheRFGSA- VerySuccessful- basedonobjectives

• Win/Win- IndustryandEPA– Industry- Flexibility/Efficientcompliance– EPA- EffectiveCompliance/betterinformationonconformance- company/industrylevel

• Moreeffectivevs.individualcompanycompliance

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Summary Why does it Work ?

• RFGSAIndependence• Robustmethodology• TurnKeySolution• Transparentcompliance• Voluntaryparticipation• Industryfunded• Internal/ExternalOversight– Board,TechComm,AnnualAudits

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RFG Survey Association Contact Info:• FrankLenski,President11350RandomHillsRd.Suite800Fairfax,VA22030website:www.rfgsa.orgEmail:Frank.Lenski@rfgsa.org703-279-6434(d)703-279-6435(f)