REGULATING HAWAII'S
PETROLEUM INDUSTRY

Endnotes 1

 

1.   This organization was referred to in the Resolution as the
     "Hawaii Retail Gasoline Dealers Association".

2.   Letter to researcher from Richard C. Botti, Executive
     Director, Hawaii Automotive and Retail Gasoline Dealers
     Association, dated July 20, 1995.

3.   The members of the HPMA are as follows:  Akana Petroleum
     (Hilo), Alii Petroleum (Honolulu), Aloha Petroleum
     (Honolulu), B & E Petroleum (Kaneohe), Big Island Petroleum
     (Kailua-Kona), Diamond Head Petroleum (Honolulu), Garlow
     Petroleum (Honolulu), Hawaii Petroleum (Hilo), Kauai
     Petroleum (Kapaa), Kewalo Marine Service (Honolulu), Maui
     Oil (Kahalui), Maui Petroleum (Kahalui), Pacific Petroleum
     (Honolulu), and Senter Petroleum (Kailua).  Telephone
     interview with Alec McBarnet Jr., Vice-President of the
     Hawaii Petroleum Marketers Association, August 23, 1995, and
     letter to researcher from the Hawaii Petroleum Marketers
     Association, postmarked September 7, 1995.

4.   See Walter Miklius and Sumner J. LaCroix, Divorcement
     Legislation and the Impact on Gasoline Retailing in the
     United States and Hawaii (Honolulu:  University of Hawaii,
     January 20, 1993) at 56.

5.   Letter to researcher from David Young, Public Affairs
     Manager, Chevron U.S.A. Products Co., and Chairman of the
     Hawaii Petroleum Resources Group, dated September 20, 1995.

6.   See Miklius and LaCroix at 56.

7.   The Bureau's survey was forwarded to WSPA's general offices
     in California, from which it was distributed to all WSPA
     companies doing business in Hawaii.  In a letter to this
     researcher, the chairman of WSPA's Hawaii Petroleum
     Resources Group stated that:  "WSPA itself has no analytical
     capacity nor an extensive legal staff.  From our experience
     in answering your survey, I can assure you that the time,
     expertise and effort necessary to provide you with answers
     would be far beyond the association's capacity."  Chevron
     and Shell therefore responded individually.  Letter to
     researcher from David Young, supra note 5.

8.   Letter from Yukio Naito, Chairman of the Public Utilities
     Commission, to Wendell K. Kimura, Director, Legislative
     Reference Bureau, dated June 2, 1995.

9.   Letter memorandum from Kathryn S. Matayoshi, Director of
     Commerce and Consumer Affairs, to Wendell K. Kimura, dated
     June 8, 1995.

10.  See Julia E. Schoen, The Consumer and Gasoline Marketing in
     Hawaii:  The Impact of Direct Retailing of Motor Fuel by
     Refiners and Distributors on the Consumer (Honolulu: Hawaii
     Department of Commerce and Consumer Affairs, 1992 (interim
     study) and 1993 (final report)).  For example, the
     Resolution requests the views of the Department on the
     effects of establishing a public bulk gasoline terminal
     facility, a petroleum regulatory commission, and a public
     petroleum products storage authority, none of which are
     addressed in the Department's study.

11.  The position of the Public Utilities Commission with regard
     to the implementation of the Petroleum Industry Information
     Reporting Act of 1991 (chapter 486I, Hawaii Revised
     Statutes) is reported in chapter 13.

12.  Although the definition of "manufacturer" in section 486H-1,
     Hawaii Revised Statutes, refers to specific manufacturers in
     existence on January 1, 1992, for purposes of chapter 486H,
     Hawaii Revised Statutes (gasoline dealers), that definition
     has been amended to refer to manufacturers generally.

13.  Chapter 286, Hawaii Revised Statutes, relates to highway
     safety.

14.  MacAvoy, Paul W., ed., Federal Energy Administration
     Regulation:  Report of the Presidential Task Force
     (Washington, DC:  American Enterprise Institute for Public
     Policy Research, 1977) at 177.

15.  United States, Department of Energy, The Motor Gasoline
     Industry:  Past, Present, and Future (Washington, DC:  Jan.
     1991) at 54 (hereinafter "DOE (1991)").

16.  Haw. Rev. Stat., §486H-10(a), as amended by Act 238, Session
     Laws of Hawaii 1995.  The term implies that the retail
     outlet is under the direct control of a major oil company
     which is able to set the retail product price and directly
     collect all or part of the retail margin.  The term also
     includes retail outlets being operated by salaried employees
     of the oil company or its subsidiaries and affiliates, and
     may involve personnel services contracted by the oil
     company.  See definition of "refiner-operated retail outlet"
     in David J. Teece, "Vertical Integration in the U.S. Oil
     Industry", in Vertical Integration in the Oil Industry,
     Edward J. Mitchell, ed., (Washington, DC:  American
     Enterprise Institute for Public Policy Research, 1976)
     (Appendix 1:  Definitions Used in the Federal Energy
     Administration's Refiner/Importer Historical Report on
     Petroleum Products Distribution) at 184.

17.  DOE (1991) at 54.

18.  MacAvoy (1977) at 189.

19.  Id.

20.  Haw. Rev. Stat. §486H-10(a), as amended by Act 238, Session
     Laws of Hawaii 1995.

21.  Massachusetts, Open Supply and Divorcement Task Force,
     Report Concerning House Bills H861 and H4490 Currently
     Before the Joint Committee on Energy (Boston:  Aug. 11,
     1993) at 1 (hereinafter, "Mass. Task Force"); Hawaii,
     Department of the Attorney General, An Investigation of
     Gasoline Prices in Hawaii:  A Preliminary Report (Honolulu:
     Sept. 1990) at 6 (hereinafter, "AG (1990)").

22.  Hawaii, Department of the Attorney General, Gasoline Prices
     in Hawaii:  The Impact of Oil Company Divorcement on
     Consumer Prices (Honolulu:  1993) at 1 (hereinafter, "AG
     (1993)"); Hawaii, Department of the Attorney General, The
     Attorney General's 1994 Interim Report on the Investigation
     of Gasoline Prices (Honolulu:  1994) at 19 (hereinafter, "AG (1994)").

23.  MacAvoy (1977) at 181.

24.  DOE (1991) at 53.

25.  MacAvoy (1977) at 181.

26.  AG (1994) at 4-5; AG (1990) at 11; see also Nancy D.
     Yamaguchi and David T. Isaak, Hawaii and the World Oil
     Market:  An Overview for Citizens and Policymakers
     (Honolulu:  East-West Center Energy Program, August 1990) at 73-74.

27.  MacAvoy (1977) at 181.

28.  Mass. Task Force at 1.

29.  Teece (1976) at 183-184.

30.  Mass. Task Force at 1.

31.  DOE (1991) at 55.

32.  Teece (1976) at 184.

33.  United States, General Accounting Office, Energy Security
     and Policy:  Analysis of the Pricing of Crude Oil and
     Petroleum Products (Washington, DC:  March 1993) at 127;
     Arizona, Joint Legislative Study Committee on Petroleum
     Pricing and Marketing Practices and Petroleum Producer
     Retail Divorcement, Final Report (Dec. 1988) (App. A) at 17.

34.  AG (1990) at 7.

35.  See generally Herbert Hovenkamp, Federal Antitrust Policy:
     The Law of Competition and its Practice (St. Paul:  West
     Publishing Co., 1994) at 262-263 and 516-531; see also
     Graham Bannock, R. E. Baxter, and Evan Davis, The Penguin
     Dictionary of Economics (London:  Penguin Books, 1987) at
     322-323.

36.  MacAvoy (1977) at 186.

37.  Jeffrey L. Spears, "Note:  Arguments For and Against
     Legislative Attacks on Downstream Vertical Integration in
     the Oil Industry," 80 Kentucky L.J. 1075 at 1078 (Summer,
     1992); see also AG (1993) at 26.

38.  MacAvoy (1977) at 187.

39.  Mass. Task Force at 1-2.

40.  DOE (1991) at 55-56.

41.  See House Bill No. 1652, introduced in the Eighteenth
     Legislature 1995, State of Hawaii, at 5 (lines 11-17).

42.  Id. at 5 (lines 18-20).

43.  MacAvoy (1977) at 189.

44.  Hawaii Revised Statutes §342L-1.  The definition in section
     342L-1 further provides that the term does not include any
     of the following:
     
     (1)  Farm or residential tank of one thousand one hundred
          gallons or less capacity used for storing motor fuel
          for noncommercial purposes;
     
          (2)  Tank used for storing heating oil for
               consumptive use on the premises where stored;
     
          (3)  Septic tank;
     
          (4)  Pipeline facility (including gathering lines)
               regulated under:
     
               (A)  The federal Natural Gas Pipeline Safety
                    Act of 1968, Public Law 90-481, as
                    amended; or
     
               (B)  The federal Hazardous Liquid Pipeline
                    Safety Act of 1979, Public Law 96-129, as
                    amended;
     
          (5)  Surface impoundment, pit, pond, or lagoon;
     
          (6)  Storm water or wastewater collection system;
     
          (7)  Flow-through process tank;
     
          (8)  Liquid trap or associated gathering lines
               directly related to oil or gas production and
               gathering operations; and
     
          (9)  Storage tank situated in an underground area
               (such as a basement, cellar, mineworking,
               drift, shaft, or tunnel) if the storage tank is
               situated upon or above the surface of the
               floor.

45.  MacAvoy (1977) at 190.

46.  Tenn. Code Ann., §47-25-602(10) (1994); see also Black's Law
     Dictionary, 5th ed. (St. Paul, MN:  West Publishing Co.,
     1979) at 1401.

47.  See Tenn. Code Ann., §47-25-602(11) (1994).

48.  See AG (1993); Miklius and LaCroix (1993).

49.  AG (1994) at 13.

50.  See, e.g., Arizona, Joint Legislative Study Committee on
     Petroleum Pricing and Marketing Practices and Petroleum
     Producer Retail Divorcement Final Report (Dec. 1988);
     Massachusetts, Open Supply and Divorcement Task Force Report
     Concerning House Bills H861 and H4490 Currently Before the
     Joint Committee on Energy (Boston:  Aug. 11, 1993); Virginia
     General Assembly, Report of the Joint Subcommittee Studying
     Divorcement and Representative Offering for Inclusion in the
     Virginia Petroleum Products Franchise Act (Richmond:  1991).
     
     Prior to the adoption of House Resolution No. 174, H.D. 2,
     an earlier bill request that the Bureau study the issues
     contained in the Resolution in consultation with other
     agencies and over a longer period of time was deleted in
     conference committee.  Senate Bill No. 487, later codified
     as Act 238, Session Laws of Hawaii 1995, would have required
     the Bureau to study divorcement and the other issues
     specified in the House Resolution "in consultation with the
     attorney general, the department of commerce and consumer
     affairs, the department of business, economic development,
     and tourism, the public utilities commission, and any other
     appropriate government agencies" and to "consult with
     representatives of the refining oil companies, nonrefiner
     oil companies, lessee dealers, open dealers, and jobbers".
     Under that bill, the Bureau was to submit an interim report
     to the Legislature prior to the convening of the Regular
     Session of 1996, and a final report prior to the 1997
     Regular Session.  See Senate Bill No. 487, S.D. 1, H.D. 1,
     §5 (1995).  That section, however, was deleted in the C.D. 1
     version of that bill, according to the Conference Committee
     Report, since "further study of this issue is not
     necessary".  See Conference Committee Report No. 128 with
     respect to Senate Bill No. 487, C.D. 1, dated April 28,
     1995.



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