Regulatory Alert

EMA Urges PHMSA to Advance Key Regulatory Reforms to Ease Compliance Burdens on Energy Marketers

EMA Regulatory Counsel Contacts: Jeff Leiter , Jorge Roman and Rob Underwood

Washington, D.C. - July 29, 2025 - The Energy Marketers of America (EMA) today submitted comments to the Pipeline and Hazardous Materials Safety Administration (PHMSA) in response to its solicitation for stakeholder feedback on reducing regulatory burdens related to the transportation of domestic energy resources, including motor fuels and heating oil. EMA praised PHMSA's efforts to explore deregulatory options that could alleviate pressures on the supply chain for essential liquid fuels and help curb inflationary impacts on consumers.

EMA highlighted three critical areas for reform within the Hazardous Materials Regulations (HMRs) to lessen compliance burdens on small businesses in the downstream energy sector: (1) cargo tank testing requirements, (2) placarding rules, and (3) hazardous materials registration fees.

Reinstating Flexible Cargo Tank Vapor Testing to Restore Efficiencies

PHMSA has historically permitted fuel marketers to conduct leakage tests on cargo tanks using practical methods, such as through vapor recovery systems without full tank pressurization or via a pressure-drop test aligned with EPA vapor tightness certifications under the Clean Air Act. These options have allowed operators to select safe, cost-effective testing based on equipment and needs, minimizing stress on older tanks and reducing service disruptions.

However, the Biden Administration's 2023 amendments to the National Emission Standards for Hazardous Air Pollutants (NESHAP) for gasoline distribution introduced stricter pressure-drop limits-reducing allowable drops to 0.5 inches over five minutes for most marketers. This change has increased testing complexities, disrupted established protocols, and imposed additional burdens without sufficient coordination between PHMSA and the EPA.

EMA calls for enhanced inter-agency collaboration to reinstate flexible leak testing via a reasonable, three-inch pressure-drop test. Restoring a proven, safe compliance cargo tank vapor testing framework that supports small businesses in delivering reliable fuel supplies is a priority for EMA.

Expanding Lowest Flash Point Exception for Placarding in Split and Alternating Loads

In response to PHMSA's proposed amendments to cargo tank placarding for petroleum distillate fuels. EMA continues to advocate for the use of the UN ID number for the lowest flash point fuel in split loads and alternating straight loads of gasoline, diesel, heating oil, and E10 blends. EMA further urges extending this flexibility to E15 blends, especially when transported with lower-ethanol fuels.

Applying the lowest flash point placard for multiple fuels across the same day or previous business day aligns with regulatory intent and enhances operational efficiency without sacrificing safety. Current limitations force inefficient practices, such as load sequencing or running partial shipments, which drive up costs for energy marketers.

Adopting a Risk-Based Approach to Hazardous Materials Registration Fees

PHMSA's proposed fee hikes for small business registrants funding the Hazardous Materials Emergency Preparedness (HMEP) grants program disproportionately affect fuel marketers in a competitive, low-margin industry. While PHMSA recognizes the need to account for risk differences between large and small entities, the uniform inflation-based increases overlook the varying hazards of transported materials.

EMA advocates for a revised fee structure that incorporates both business size and risk profiles of transported materials. High-risk substances like toxic inhalants or radioactive materials warrant higher fees, whereas lower-risk fuels like diesel and gasoline handled by small marketers should face reduced burdens. This targeted, tiered approach would promote fairness, efficiency, and alignment with legislative goals, easing strains on the fuel and heating oil sectors.

"These reforms are essential to supporting small energy marketers who keep America's vehicles running and homes heated," said EMA President Rob Underwood. "By reducing unnecessary regulatory hurdles, PHMSA can help prevent supply disruptions, lower costs for consumers, and foster a more resilient energy supply chain."

Click here to read the letter.