Thursday, January 17, 2008

Some thoughts on the current legal regime

I've been thinking more about ARS Section 41-2083. At first blush it strikes me that (a) it is potentially unfriendly to homebrewers and co-ops, and (b) even as applied to commercial producers it has some potentially troubling components. Has anyone out there done the analysis around:
  • Does the limitation in subsection A to "retail seller or fleet owner" flow through the rest if the statute? Or do the sections stand alone; i.e., could subsections K, L, M and N apply (theoretically) to homebrewers and co-ops?
  • Are the testing and labeling requirements sensible? Does this strike the right balance between maximizing consumer protection and minimizing the regulatory burden on biofuels innovators?
  • Do the reporting requirements make sense? From an academic and public policy perspective I think the opportunity to get data about the volume of biofuel produced by each commercial player (and co-op and homebrewer? -- see first point above) would be fascinating. But I wonder if from a competitive perspective the commercial players want this sort of data to be public (I'm assuming the data will be an accessible public record once collected).
To the extent that 41-2083 (K)-(N) was interpreted to apply to homebrewers or co-ops, certainly this would dramatically undermine our "local biofuels" vision. I'll be curious to learn if the local small scale commercial producers think this law helps them (e.g., by increasing consumer confidence in biodiesel) or hurts them (e.g., by imposing unnecessary regulatory burdens).

Here are the relevant sections (other than K, which is in the post below):
A. . . . [A] retail seller or fleet owner shall not store, sell or expose or offer for sale any motor fuel . . . if the product fails to meet the standards specified in this section and in the rules adopted by the director. [ . . . ]

L. A person who blends biodiesel that is intended as a final product for the fueling of motor vehicles shall report to the director by the fifteenth day of each month the quantity and quality of biodiesel shipped to or produced in this state during the preceding month. A person who supplies biodiesel subject to this subsection shall report the following by batch:
1. The percentage of biodiesel in a final blend.
2. The volume of the finished product.
3. For neat biodiesel, the results of analysis for those parameters established by ASTM D6751.
4. For biodiesel blended with any diesel fuel, the results of the analysis of the following motor fuel parameters as established by ASTM D975: (a) Sulfur content. (b) Aromatic hydrocarbon content. (c) Cetane number. (d) Specific gravity. (e) American petroleum institute gravity. (f) The temperatures at which ten per cent, fifty per cent and ninety per cent of the diesel fuel boiled off during distillation.

M. The report required by subsection L of this section shall be on a form prescribed by the director and shall contain a certification of truthfulness and accuracy of the data submitted and a statement of the supplier's consent permitting the department or its authorized agent to collect samples and access records as provided in rules adopted by the department. A corporate officer who is responsible for operations at the facility that produces or ships the final product shall sign the report.

N. A person shall label dispensers at which biodiesel is dispensed in such a manner as to notify other persons of the volume percentage of biodiesel in the finished product and that conforms with 40 Code of Federal Regulations sections 80.570, 80.571, 80.572, 80.573 and 80.574 to inform the customer of the sulfur content of the diesel fuel being dispensed.

No comments: