FOR IMMEDIATE RELEASE May 1, 2007

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

Proposed DHS Security Rules Significantly Understate
Total Number of Facilities Affected,
Could Number in the Hundreds of Thousands For Propane Alone

(WASHINGTON, DC) – The proposed U.S. Department of Homeland Security (DHS) rules on chemical security vastly undercount the number of facilities covered by the government’s mandated compliance review.

“DHS estimates that as many as 50,000 facilities will have to be initially screened to determine if they fit their “high-risk” standard.  The National Propane Gas Association is highly confident that this government figure is extremely low.  Our industry alone has about 11,000 sites where propane is stored for distribution to customers.  DHS has not counted the additional propane storage tanks at customer locations that would fall under their ruling, which may number in the hundreds of thousands.  I don’t think DHS has any idea about how many propane facilities fall under this arbitrary threshold,” said NPGA Senior Vice President Philip Squair.

DHS's 7,500 pound (1,785 gallons) threshold for propane is very low and will force tens of thousands of retail facilities and customer sites to go through their “Top Screen” security process. 

Some examples in just a few areas of the country illustrate how many sites will be adversely affected by this government rule.  In the state of Iowa, one small farm cooperative alone serves nearly 9,000 farms and agricultural sites with more than 7,500 lbs. of propane.  A major national propane marketer estimates that at least 21,500 customer and business locations would fall under DHS’s threshold for propane.  And a small marketer in California estimates their 200 ordinary business customers each would have to submit a costly initial survey to DHS or face fines.

In the last ten years alone, approximately 530,000 thousand-gallon ASME-standard propane tanks have been constructed and installed in locations across the United States.  Having only three of these 1,000-gallon tanks—manifolded together or not—would cause a facility to fall under the low DHS 7,500 lbs. threshold.   An average 1,000-gallon tank can have a useful life of almost 50 years when properly maintained. 

Facilities storing more than 7,500 lbs. of propane are found all across the United States in every county and state.  To name a few locations, these tanks are found at hospitals, nursing homes, mobile home parks, small industrial businesses, campgrounds, construction sites, large “big-box” retailers, small and large farms, and cylinder refill stations across the nation.    They provide customers their heating fuel or fuel to power industrial or agricultural equipment.

Retail propane marketers store propane for distribution to local customers.  The 11,000 sites operated by NPGA’s 3,000 propane marketers members and many other industry customers can have storage tanks as large as 30,000 gallons.

DHS is setting up a situation where ordinary citizens and companies who rely upon propane for their energy will be subject up to $25,000 per day in fines for violating their rules.  This is not fair, since storage of propane at the current threshold level is simply not something that poses national security risks.

DHS’s cost impact does not take into consideration that these rules may cause propane customers to switch fuels, thus negatively impacting one of America’s most environmentally friendly and widespread portable fuels.  Propane competes with electricity and fuel oil for serving the needs of people for home and water heating and cooking, among other applications.  Requiring many of the propane industry’s customers to submit a “Top Screen” analysis to DHS will provide powerful incentives for them to switch to other fuels with a greater environmental impact.  A small propane marketer in Pennsylvania estimates that their 73 customers who may fall under this rule could together cost the company $182,500 in additional compliance costs just to fill out the "Top Screen" analysis.

NPGA also believes that DHS’ rulemaking goes far beyond the intent of the law passed last year by Congress.  The law said that nothing in the DHS rules could supersede other laws pertaining to the manufacture, use, distribution in commerce, or sale of chemicals.  Storage of propane for use of sale as fuel was exempted from similar earlier risk management rules through the Fuels Regulatory Relief Act of 1999.  That important law, passed unanimously by Congress, clarified that facilities storing flammable fuel substances were exempt from the Risk Management Plan regulations enforced by the Environmental Protection Agency. 

The DHS rule is written so broadly that many customers will demand their suppliers do the top screening for them or pay a consultant to do it for them as the price of remaining a customer.  This will discourage new or continued use of propane despite its benefits as a clean, efficient, portable fuel.  NPGA envisions a cottage industry of consultants springing up to prey upon the fears of companies, farms, small businesses, and individuals who would be covered by the DHS rules at the 7,500 pound level.

NPGA has implemented an aggressive outreach program to make sure that all covered facilities know what DHS is doing.  This outreach program is targeting trade associations representing farmers, hospitals, nursing homes, mobile home parks, campgrounds, manufacturers, small businesses, and others affected by this rule. 

“The three 1,000 gallon propane tanks at a local grain elevator, or nursing home, or school or campground are not terrorist targets.  NPGA has long supported safe storage regulations for the industry.  We are a heavily regulated and very safe industry. What DHS is asking is for ordinary homeowners, businesses, and farmers to declare themselves terrorist targets because they choose to use propane to heat their houses and businesses,” observed Squair.

 

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.

# # #

07-05