FOR IMMEDIATE RELEASE February 23, 2007

For more information, contact: Robert Baylor 202-466-7200 rbaylor@npga.org

U.S. Propane Industry Is Taking Action
To Address The Northeast Propane Shortage

(Washington, DC) – In response to the propane supply situation occurring in New England and the mid-Atlantic states, the propane industry released the following statement.

“The American propane industry is doing all it can to ensure propane supplies are reaching the affected areas, particularly the New England region,” said Joe Rose, executive vice president of the Propane Gas Association of New England.  “Our industry’s organizations are aggressively working to remove all the impediments in the way of delivering fuel to the region.  Our state governments have lifted driving regulations, and our national organizations are working with federal and Canadian officials to ensure trucks and railcars filled with propane are not delayed.  Our industry is doing all we can to alleviate potential supply disruptions and deliver fuel to our customers as quickly as possible.”

There are a number of developments that have led the region to its current shortage and demonstrate the essential nature of Federal regulatory relief:

Impact of Canadian Rail strike.  Over 40% of the propane supply and distribution for the New York/New England Region is provided by the Canadian National Railway Co. (CNR).  On Feb. 10, CNR’s 2,800 union employees went on strike.  The strike is affecting all freight movements—including propane—and railcars are blocking track throughout the CNR system.  The CNR strike is affecting the citizens of Maine, where 50 to 70 percent of the propane supplied to that state is through rail cars.

Waterborne propane imports have slowed.  The propane supply at the Providence, R.I. marine terminal has been depleted with the next delivery scheduled for Feb. 25.  The schedule for additional waterborne deliveries into the Newington, N.H. marine terminal has been delayed.

Pipeline supplies have stopped.  On Feb. 20, the pipeline company TEPPCO announced that a leak caused by a faulty valve has forced a shutdown of its 20-inch propane pipeline in Seymour, Ind.  The existing supplies in storage at Todhunter, Ohio and Watkins Glen, N.Y. are being drawn down quickly and may be exhausted by Feb. 25.  TEPPCO has stated that the repair work may take more than 48 hours.  It is expected that the repairs will be completed on Feb. 23, but it may take three or four days for product to begin appearing in the region via this route.

A continued strong demand.  Despite strong inventories earlier in the heating season, the demand for propane since mid-January has been exceptional across the entire eastern United States.  Since it is only mid-February, it is likely that winter weather and the demand for propane will continue for a few more weeks.  The ice storm which blanketed the mid-Atlantic and New England states earlier this week further disrupted transportation and propane shipments over U.S. roads and rails.

Currently, New England regional and local propane marketers are drawing upon propane inventories that existed prior to the pipeline shutdown.  The extra storage capacity added to the region in the past five years has helped the industry maintain higher levels of product during this winter.

The propane industry is aggressively pursuing a number of avenues to gain supply relief for its customers in the affected areas.

• Northeast propane suppliers have arranged for the transportation of propane into the region from storage facilities in Kansas, Michigan, and Iowa.  One supplier alone on Feb. 24 arranged for 27 transport trucks to haul propane into his New England service area.
  
• Marketers are communicating daily and sharing supplies between each other.  Several southern New England marketers made product available to Maine marketers over this past weekend, in addition to helping local marketers who were nearly empty.
  
• At the request of the U.S. Department of State, the National Propane Gas Association (NPGA) sent a letter to the Canadian Ambassador to the U.S. informing him of this serious supply situation. 
  
• NPGA is working with our Canadian members and counterpart association, Propane Gas Association of Canada, to receive the latest updates on the status of a bill introduced in the Canadian Parliament Feb. 21 that would legislatively end the CNR strike.
  
• NPGA will be briefing key members of Congress from the affected states to update them on the status of the supply situation.
  
• NPGA is maintaining communication with DOE’s Office of Electric Delivery and Energy Reliability regarding the supply circumstances, as well with TEPPCO leadership to get the latest updates on the status of repairs to their Indiana pipeline.

The National Propane Gas Association yesterday petitioned the U.S. Department of Transportation for a regional exemption from commercial driver’s rules to insure that the U.S. Northeast receives adequate propane supplies over the next few weeks.

“A number of recent and near simultaneous developments are affecting the propane delivery infrastructure negatively and threaten the health and safety of propane customers,” wrote NPGA Senior Vice President Philip Squair in his Feb. 22 letter to Robert Miller, DOT field administrator for the Eastern Region Service Center.  “These developments have led to cascading ripple effects throughout the entire region.  Industry members are finding it necessary to move propane long distances to ensure that product is available.”

A number of states have implemented hours-of-service exemptions within their own jurisdictions, but NPGA and the propane industry are petitioning the Federal government to issue a regional 30-days hours-of-service exemption for the DOT Eastern Regional Service Center Area (Connecticut, D.C., Delaware, Massachusetts, Maryland, Maine, New Jersey, New Hampshire, New York, Pennsylvania, Rhode Island, Virginia, Vermont, and West Virginia).  Most such waivers are provided at the state level, but their expiration dates and times can vary.  A regional waiver would provide consistency of waiver terms and expiration dates.

The industry’s commitment to safety is always present, even during this month’s supply shortage.  Should a consumer ever run out of gas or their tank's shut-off valve is turned off for any reason, a propane customer should not attempt to open the valve.  The consumer must make sure that a leak check is performed by a qualified service technician before the tank is refilled and put back into service.  Failure to follow this information may result in the ignition of leaking gas, causing serious and potentially fatal injury, fire, or explosion.

According to the Energy Information Administration, as of Feb. 16 there are 34.7 million barrels of propane in the U.S. national inventory.  The New England fuel region (PADD IA) reported it has .085 million barrels (85,000 barrels) in inventory as of Feb. 16.

The NPGA letters to FMCSA Administrator Miller and Canadian Ambassador Michael Wilson can be found at www.npga.org under “Press/Media.”

The National Propane Gas Association is the national trade association of the propane industry.   NPGA represents approximately 3,500 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 an energy source for their homes or businesses.   For more information about NPGA and the propane gas industry, visit NPGA on the Internet at www.npga.org.

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07-03