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Stillwater Associates LLC Newsletter
 
March 2016 
The March edition of the Stillwater Newsletter begins with Barry Schaps' explanation of the Federal Commodity Futures Trading Commission's efforts to regulate excessive speculation of energy commodities. Next, we discuss Michael Leister's presentation at the AFPM Annual Meeting on EPA's recent RFS changes. Rob Jaques gives us a peak at what happened at the 2016 AFPM Annual Meeting and how things have changed since 2015 Annual Meeting. Finally, the LCFS Newsletter will be available soon! In the meantime take advantage of your complimentary preview.
Politics at play as CFTC tries to regulate excessive speculation of energy commodities
The Federal Commodity Futures Trading Commission (CFTC) began addressing the issue of excessive speculation and its effects on energy commodities since Congress enacted the Dodd-Frank Act following the financial meltdown of 2008. The legislation, passed in 2010, ordered the CFTC to set limits on the number of futures contracts a trader could hold for some energy and agricultural commodities in order to fight "excessive speculation" which is viewed to be harmful to consumers and creates concerns about market integrity and stability. Market liquidity is essential for futures markets to function, and the fear of excessive speculation and enormous price swings scares away investors.

Due to the passage of Dodd-Frank, the CFTC proposed a position limit rule in 2012. The financial industry, however, sued to block its enactment, claiming the proposed rules were unfair and unnecessary. They successfully persuaded a federal judge who threw out the regulations. In response to this setback, the CFTC asked its Energy and Environmental Advisory Committee (EEAC) to review existing market data, interview market participants, and provide further recommendations to the CFTC Commissioners.

What seemed like a perfectly logical request of knowledgeable advisors did not turn out as the Commission expected. On February 26, 2016 the EEAC issued its report recommending that the CFTC drop all efforts to reform position limits on energy commodities.
 
How EPA's Recent RFS Changes will Impact RFS Program Participants
    
On March 15th  Michael Leister delivered a presentation at the 2016 AFPM Annual Meeting entitled How EPA's Recent RFS Changes for 2014, 2015, and 2016 will Impact Various RFS Program Participants. EPA's changes to the Renewable Fuel Standard (RFS) are meant to encourage the growth of production and use of biofuels. This is an initial step to drive greater E85 and perhaps E15 sales in order to eliminate the E10 blendwall. Michael's presentation provides an analysis of the changes to the standards, examines what the changes mean for the RIN market, and how the changes will impact Obligated Parties and Consumers. 
The 2016 AFPM Annual Meeting in San Francisco
by Rob Jaques
    
The American Fuel & Petrochemical Manufacturers (AFPM) Annual Meeting was held in San Francisco this year. Dave Hackett, Mike Leister, and I attended. Mike gave a well-received "magic" presentation about the Environmental Protection Agency's (EPA) recent renewable fuel standard (RFS) changes for 2014, 2015, and 2016. This was my first AFPM annual meeting, and as Dave warned me, it was educational, fun, and exhausting. Every day we were busy from 7:00 AM until midnight, and our time was filled with meetings, eating, and drinking.

After the usual travel issues getting to San Francisco, I arrived on Sunday afternoon and immediately made the rounds at cocktail parties, from OPIS and Platts to the Opening Reception. Due to some urgent client work, I was off-site Monday afternoon and evening, but the morning General Session was very informative. Alex Epstein, author of The Moral Case for Fossil Fuels gave a thought-provoking talk about moral frameworks and how the current debate about energy isn't a fact-based discussion about the pros and cons of various energy sources, it's a competition between moral frameworks.

Expert LCFS Credit Market Analysis for Covered Entities
California's Low Carbon Fuel Standard is well under way and Covered Entities must participate in California's LCFS Credit Market. It is important that Covered Entities have the right information to make smart Credit Market decisions. Stillwater is pleased to offer a sneak preview of our California Low Carbon Fuel Standard Newsletter. With subscription packages starting at $30 per month, this unique publication will offer weekly, monthly and quarterly looks at LCFS credit and deficit trends based on California Air Resources Board (CARB) data. Weekly reports will include a summary of the week's LCFS news, while monthly and quarterly reports will also include Stillwater's expert analysis of recent trends in the program. 

We'll be offering subscriptions of the LCFS Newsletter soon. In the mean time, complimentary editions of the newsletter are still available.

Complimentary Edition of Stillwater's LCFS Newsletter
This complimentary offer includes the a sample of weekly, monthly and quarterly reports. Please download and review the newsletter, and then let us know what you think. In a couple of days you will receive an email request to fill out a short survey on Stillwater's LCFS Newsletter. Your opinion means a lot to us; your suggestions will help improve the LCFS Newsletter as we prepare it for its commercial debut.
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Stillwater Associates is a transportation energy consulting firm. We help our clients understand how fuels get from the source to the service station. If your company is in need of expert advice, please let us know.

Sincerely,

David J. Hackett, President
Stillwater Associates LLC