Letter and Advisory to Fuel Distributors

June 18, 2006

To Whom It May Concern:

As you may know on October 7, 2005, the Ontario government passed Ontario Regulation 535/05 – Ethanol in Gasoline. The regulation calls for an annual average of five per cent ethanol in gasoline, beginning in January 2007. Regulating the use of ethanol in gasoline will lead to cleaner air in Ontario and play a key role in reducing greenhouse gases. Ontario’s 2007 target for ethanol will reduce annual greenhouse gas emissions by about 800,000 tonnes, equivalent to removing 200,000 cars from the road.

With the implementation of this regulation there will be new reporting requirements for some fuel suppliers in the province. A smooth transition to regulated ethanol in gasoline requires that all gasoline suppliers in Ontario understand how the regulation may affect their operations.

The attached advisory provides additional information about who is responsible for reporting under the regulation and links to the Ministry of the Environment’s Ethanol in Gasoline website, which includes best practices for storing/handling ethanol-blended gasoline and other online resources.

Please consider whether you will be subject to the balancing and reporting requirements of the regulation, starting in 2007, and take appropriate action.

I trust that you will find this information useful.

Yours truly,

Walter Chan
Director (A), Air Policy and Climate Change Branch
Ontario Ministry of the Environment

ADVISORY: ONTARIO REGULATION 535/05

Reporting Obligations

Fuel suppliers who are responsible for reporting on compliance with the regulation include anyone who:

1. Manufactures, blends, imports, or acquires gasoline or ethanol-blended gasoline through an inter-refiner agreement; AND
2. Sells the fuel in Ontario at wholesale or retail.

Consider whether you are a fuel supplier under this definition, and will be required to report the regulatory requirements, starting in 2007.

Preparing to Receive Ethanol for the First Time

In addition, owners and operators of fuel dispensing facilities who do not already store ethanol-blended gasoline and plan on doing so should follow a few simple steps prior to their first delivery, to ensure fuel quality and safety.

These steps are outlined in the document, “Checklist for Fuel Dispensing Facilities Switching to Ethanol-Blended Gasoline”, which can be accessed from the Ministry of the Environment’s website (see below).

Additional Information

For more information about the regulation, reporting forms, best practices for storing/handling ethanol-blended gasoline, and other issues relevant to the regulation of ethanol in gasoline, go to www.ene.gov.on.ca/envision/ethanol/index.htm or contact the Ministry of Environment Public Information Centre at Tel: 1-800-565-4923.

For more information about the compatibility of ethanol with fibre-reinforced plastic tanks and existing owner/operator obligations under the Liquid Fuels Handling Code, refer to the information provided by the Technical Standards and Safety Authority (TSSA) at www.tssa.org/regulated/fuels/default.asp or contact TSSA at Tel: 416-734-3300.