President Signs Propane Education and Research Enhancement Act of 2014 Into Law

Washington, DC (December 18, 2014) – Today, President Barack Obama signed H.R. 5705, the “Propane Education and Research Enhancement Act of 2014,” into law.  This piece of legislation modifies the functions of the Propane Education and Research Council and the data that the Department of Commerce is to use in developing its annual propane price analysis.

Richard Roldan, NPGA’s President and CEO said, “This bill is a significant win for both propane consumers and the industry.  Last winter, during the hardest winter our nation has faced in more than 25 years, the propane industry could not educate consumers on the steps necessary to prepare their propane-heated homes for the winter.  Allowing the industry to use its own funds to reach our customers only makes sense.”

Under the Propane Education and Research Act of 1996, the Department of Commerce (DOC) must calculate annually the price for “consumer grade propane” and compare it with an index of prices of specified competing fuels.  If the price of propane exceeds a certain threshold, the industry is restricted from conducting most educational outreach activities.  In 2009, due to a misinterpretation of the law by the DOC, the restriction was triggered and all educational outreach ceased.

While the law requires DOC to recalculate the price comparison every six months, it has only been completed three times in the last five years.  H.R. 5705 specifies Congressional intent that DOC must use data reflecting all propane sectors, not just residential.

Roldan continued, “This law is a perfect example of what Congress can accomplish when they work together.  With bi-partisan support, this bill passed unanimously in the House and Senate and consumers are the ultimate beneficiary.”

Click here to view the complete bill text.

Law Proposes Bipartisan, Common Sense Solution Addressing the PERC Restriction

Washington, DC (November 13, 2014) – Today, Congressman Bob Latta (R-OH) and Congressman Tim Walz (D-MN) introduced legislation to reinstate the propane industry’s ability to use its own resources to educate consumers.  The Propane Education and Research Enhancement Act of 2014 amends the Propane Education and Research Act (PERA) to update the data that must be used to calculate a critical price comparison.

Under PERA, the Department of Commerce (DOC) must calculate annually the price for “consumer grade propane” and compare it with an index of prices of specified competing fuels.  If the price of propane exceeds a certain threshold, the industry is restricted from conducting most educational outreach activities.  In 2009, due to a misinterpretation of the law by the DOC, the restriction was triggered and all educational outreach ceased.

Richard Roldan, NPGA’s President and CEO, explains, “Last winter, during the hardest winter our nation has faced in more than 25 years, the propane industry could not educate consumers on the steps necessary to prepare their propane-heated homes for the winter.  The restriction is senseless and it’s harming consumers.”

While the law requires DOC to recalculate the price comparison every six months, it has only been completed three times in the last five years.  The PEREA bill would specify Congressional intent that DOC must use data reflecting all propane sectors, not just residential

“It is time for a common sense solution,” said Roldan.  “I’m looking forward to working with Congress and seeing this bipartisan bill signed into law.”

Propane Supply and Security Act of 2014 Introduced; Bi-Partisan Action Benefits Propane Customers

Washington, DC (July 31, 2014) – Today, a bi-partisan group of senators made up of, Sen. Tammy Baldwin (D-WI), Sen. Al Franken (D-MN), and Sen. Rob Portman (R-OH), introduced the “Propane Supply and Security Act of 2014”.  This comprehensive legislation will benefit propane customers directly, increase market transparency, and improve the propane delivery infrastructure.

The bill contains language that would clarify Congressional intent of the Propane Education and Research Act that currently restricts customer outreach activities by the Propane Education & Research Council.  “This provision is critical because it allows the industry to use its own resources to talk directly to our customers.  When we have harsh winters or unexpected supply challenges, being able to communicate with our customers in a quick and efficient way can mean the difference between a crunch and a crisis,” said David Lugar, Chairman of the Board of Directors at the National Propane Gas Association.

For consumers, the bill makes it easier to know what the market price of propane is in neighboring areas by expanding the pricing data from States that participate in the State Heating Oil and Propane Program (SHOPP) of the Energy Information Administration (EIA).  Armed with this information, customers can make more informed purchasing decisions.

Last winter, propane prices increased dramatically at a time when the storage levels at major market hubs in Conway, KS, and elsewhere, were unknown.  The proposed legislation would eliminate that kind of market uncertainty by mandating weekly inventory data reported at the State level and at the collective storage facilities at market hubs.

The Propane Supply and Security Act of 2014 increases the authority given to Cabinet Secretaries to ease regulatory burdens during fuel emergencies.  If a sudden price spike or supply shortage occurs, the Secretary of Energy will lead emergency response efforts to ensure expedited distribution of propane through measures such as: exemptions from hours-of-service restrictions, prioritizing propane shipments by rail and in pipelines, and other actions deemed necessary.

“The National Propane Gas Association applauds this bi-partisan group of senators for their leadership in preventing another propane supply and distribution crisis.  The provisions contained in this bill benefit consumers and improve market transparency.  NPGA is looking forward to working with other stakeholders as the bill advances through the legislative process,” said Rick Roldan, President and CEO of the National Propane Gas Association.

The National Propane Gas Association is the national trade association of the propane industry. NPGA represents approximately 3,000 companies, including producers, wholesalers, transporters, and retailers of propane gas as well as the manufacturers and distributors of associated propane equipment and appliances. 50 million Americans choose propane as their energy source. Propane is a clean-burning, efficient and climate-friendly alternative fuel that is available now. For more information about NPGA and the propane gas industry, visit NPGA online at www.npga.org.

New Law Helps Propane Consumers During Winter Emergencies; Mandates Early Warning System

Washington, DC (July 1, 2014) – On June 30, 2014, President Obama signed into law S. 2086, the Reliable Home Heating Act.  This bill clarifies that the Federal Motor Carrier Safety Administration (FMCSA) must accept hours-of-service (HOS) extensions during emergencies declared by a Governor for up to two additional 30-day periods (for a total of three).  Current law allows additional HOS extensions to be granted by FMCSA or by a Presidential emergency declaration only.

Richard Roldan, NPGA’s President and CEO said, “This bill will benefit the millions of households that rely on propane for home heating.  Providing two additional hours-of-service extensions gives propane delivery drivers the flexibility they need to safely transport the fuel to the customers who need it most.”

The Reliable Home Heating Act also provides an early warning mechanism to monitor home heating fuel inventory levels.  The bill directs the Administrator of the Energy Information Administration, using data compiled from the Administration’s Weekly Petroleum Status Reports, to notify the governor of each state in a Petroleum Administration for Defense District if that district’s inventory of residential heating fuel has been below the most recent five-year average for more than three consecutive weeks.

Roldan continued, “State Governors are a great ally during the winter heating season, and we know they do not ever want to have to use emergency provisions, but are ready to do what is necessary and this legislation helps.  The provisions in this bill act as an informal early warning system that will increase communications between state and federal authorities to identify potential supply and distribution challenges before they happen.”

Senator John Thune (R-SD) introduced the Reliable Home Heating Act in May.  Both the House and Senate passed the same legislation by unanimous consent.

Propane Industry Applauds Congress for Improving Propane Distribution

Washington, DC (March 13, 2014) – Today, the Senate unanimously approved H.R. 4076, a bill that extends hours of service waivers for propane deliveries through the end of May.  First introduced by Congressman Bill Shuster (R-PA), the Home Heating Emergency Assistance Through Transportation Act of 2014, or HHEATT Act, passed unanimously in the House last week.

Gary France, Chairman of the National Propane Gas Association and owner of France Propane Service in Wisconsin, thanked the House and Senate for their swift action, “While it may feel like spring in some parts of the country, there are still regions with colder-than-normal temperatures and where demand for propane is high.  This bill makes it easier for companies to get propane to the customers who need it most.”

H.R. 4076 extends any Federal Motor Carrier Safety Administration’s (FMCSA) hours of service exemption issued after February 5, 2014 related to the delivery of propane for home heating.  This bill follows last week’s hearing in the House Energy and Power Subcommittee where recommendations for improving the fuel supply infrastructure in the United States were requested.

In his testimony before the Committee, Richard Roldan, President and CEO of the National Propane Gas Association, made several recommendations for what government can do to protect the consumers who rely on propane, including: a rigorous and formal review of federal propane export policies; a Federal Trade Commission investigation to ensure markets are performing properly; improving the timeliness and reliability of the Energy Information Administration’s inventory data; increasing transparency of petroleum products pipeline operations; applying affiliate rules to petroleum products pipelines; easing of the requirements needed for federal authorities to exercise emergency power during emergencies; and increasing storage infrastructure, such as the proposed Finger Lakes facility in New York State.

Roldan applauded Congress for taking immediate action to relieve the regulatory burden of hours of service rules.  “Members of Congress recognized that right now the industry is focused on safely delivering propane to the homes that rely on it.  Through their quick and bi-partisan action, Congress has ensured that these deliveries can continue unencumbered by these regulations.  We urge the President to sign this bill into law as quickly as possible.”

The National Propane Gas Association is the national trade association of the propane industry. NPGA represents approximately 3,000 companies, including producers, wholesalers, transporters, and retailers of propane gas as well as the manufacturers and distributors of associated propane equipment and appliances. 50 million Americans choose propane as their energy source. Propane is a clean-burning, efficient and climate-friendly alternative fuel that is available now. For more information about NPGA and the propane gas industry, visit NPGA online at www.npga.org.

Propane Industry Calls on Congress to Address Energy Infrastructure Issues

Washington, DC (March 6, 2014) – Today, Richard Roldan, President and CEO of the National Propane Gas Association, testified before the House Energy and Commerce Committee’s Subcommittee on Energy and Power on the changing energy infrastructure needs in the United States.

Roldan summarized the challenges posed to the propane industry’s infrastructure saying, “The propane delivery infrastructure is undergoing a dramatic transition, brought on by the production of previously unimaginable amounts of domestic fuels, including propane.  The result has been a change in the historical flow of fuels, which has been disruptive to energy infrastructure and energy markets.”

In addition to the changing flow of fuels in North America, the challenges of delivering propane to customers this winter were exacerbated by a number of factors including: a late, wet grain and corn harvest; historic low temperatures; lack of propane storage capacity; diverted transportation assets; and increased exports.

In his testimony before the Committee, Roldan made several recommendations for what the government can do to protect the consumers who rely on propane, including: a rigorous and formal review of federal propane export policies; a Federal Trade Commission investigation to ensure markets are performing properly; improving the timeliness and reliability of the Energy Information Administration’s inventory data; increasing transparency of petroleum products pipeline operations; applying affiliate rules to petroleum products pipelines such as exist with natural gas pipelines; easing of the requirements needed for federal authorities to exercise emergency power during emergencies; and increasing storage infrastructure, such as the proposed Finger Lakes facility in New York State.

“We are producing more propane in the United States than we have ever before.  The industry is anxious to address the existing transportation and infrastructure problems, so that more Americans can realize the benefits of this clean, abundant, and domestic fuel,” said Roldan.

A copy of the filed testimony can be downloaded at: www.npga.org/InfrastructureTestimony

More Than 500,000 Barrels of Propane En Route to the Midwest and Northeast

More than half a million barrels of propane are now headed to the Midwest and Northeast as a result of an extended FERC order.  These shipments will significantly assist NPGA members in meeting the essential needs of homes, businesses, and farms across the Midwest and the Northeast.

This additional flow is a result of a Federal Energy Regulatory Commission (FERC) order issued yesterday that extends the period during which Enterprise TE Products Pipeline Company LLC (Enterprise) must prioritize propane shipments from seven to 14 days, ending now on February 21, 2014.

NPGA commends FERC for its swift action to recognize the current emergency circumstances and to shape a remedy under its statutory authorities to protect America’s energy consumers, who are facing more weeks of below-normal temperatures.  NPGA values the opportunity to work with FERC to assure reliable, energy service to the millions of customers served by NPGA member companies.

During this unprecedented winter, pipelines play an even more important role in helping our industry supply customers with the propane they need. NPGA appreciates the response from Enterprise and their cooperation in quickly adjusting the batch schedule to bring additional barrels of propane to market in the heart of the winter heating season.

NPGA and its members look forward to continuing to work with Enterprise and FERC to ensure the safe, efficient, and economical delivery of propane to the nation’s consumers.

Background

On February 6, 2014, National Propane Gas Association filed a request on behalf of its membership that FERC require Enterprise, under the Interstate Commerce Act, to prioritize shipments of propane on its petroleum products pipeline in order to bring additional supplies of propane to the Midwest and the Northeast. Both areas have experienced significant challenges in meeting propane demand as a result of a number of factors, including a record, wet, late grain harvest in the Midwest and a colder-than-normal winter.

The order issued on February 11, 2014, is an extension of a FERC order issued on Friday, February 7, requiring Enterprise “to temporarily provide priority treatment to propane shipments from Mont Belvieu, Texas, to the Midwest and Northeast regions suffering from severe cold weather.”

Statement on Propane Supply, Demand, and Distribution

The National Propane Gas Association is working at all levels to seek relief from the current supply, distribution, and infrastructure problems facing American propane customers.

To allow for expedited delivery of propane, NPGA is working with stakeholders throughout the industry to seek relief from the current situation.  Presently, the U.S. Department of Transportation has issued a regional order for the Midwestern, Eastern, and Southern regions which will allow transporters to move propane more freely throughout the most affected regions.  The rare regional orders apply to 10 Midwest, 14 Eastern, and 9 Southern states.  A total of 31 states so far have individually issued Hours of Service relief.

Last week, the U.S. Department of Energy reported that cold weather led to record-high natural gas storage withdrawals, as well as propane.  These are the largest drawdowns in the 20-year history of the survey and the second time this year the record has been broken. Efforts are underway with the U.S. Department of Energy to acknowledge that emergency conditions could be forming, as consumers and businesses in dozens of state are faced with higher electricity and gas costs due to persistent cold weather.

In addition to seeking relief at the federal level, NPGA is working with officials within the pipeline, rail, and truck transport industries and asking for propane shipments to be prioritized within their industry.

Background

The challenges in delivering propane for consumers during this prolonged period of cold weather started with a confluence of events beginning in October.

Abundant grain crops were being harvested throughout the Upper Midwest almost simultaneously this fall. Ordinarily, the harvest progresses in stages through the region but in late 2013, the harvests happened at the same time over a wide area. This was a large, wet crop which required massive amounts of propane in order to be dried prior to storage. That demand reduced propane inventories throughout the area.

At the same time, infrastructure realignments inhibited the transportation of propane. The Cochin pipeline, which provided 40% of the product used by Minnesota suppliers, was shut down for repairs. This triggered a chain reaction causing suppliers to go further out to load their supply. Canadian imports to the Northeast were also impaired by rail re-routing. This forced Minnesota and Wisconsin retailers to get their propane at the pipelines in Iowa, increasing demand in that state.

As the harvest demand ended, a massive winter storm rolled across much of the country. Demand for residential, commercial and agricultural heat soared. The average number of heating degree days* for this winter is more than 10 percent higher than last year.  The forecast continues to project colder than normal weather for much of the United States.

An important difference between this year and previous years is the extent of propane exports into the world market.  In 2013, more than 20% of total U.S. propane was exported, up from 5% in 2008.

All these combined to prevent regional inventories from recovering and the existing pipeline and terminal infrastructure has been unable to recover. This has required longer driving distances and loading times, a scarcity of available product and delays in making deliveries to customers.

*Heating degree days are used to calculate the deviation in temperature from an average day from 65 degrees.

The National Propane Gas Association is the national trade association of the propane industry. NPGA represents approximately 3,000 companies, including producers, wholesalers, transporters, and retailers of propane gas as well as the manufacturers and distributors of associated propane equipment and appliances. 50 million Americans choose propane as their energy source. Propane is a clean-burning, efficient and climate-friendly alternative fuel that is available now. For more information about NPGA and the propane gas industry, visit NPGA online at www.npga.org.