Legislation emerges to prevent future propane shortages

August 1, 2014 By    

The Senate introduced a bill to address the causes of last winter’s propane shortage and provide solutions to minimize the chance of future shortages.

According to a press release from the respective offices of Sens. Tammy Baldwin, D-Wis.; Al Franken, D-Minn.; and Rob Portman, R-Ohio, the Propane Supply and Security Act, which they introduced July 31, would prevent shortages in several ways. The legislation would improve propane supply and price information, coordinate responses to shortages, study the need for regional propane reserves, and help farmers purchase propane storage tanks.

“Nearly 250,000 Wisconsin residents and countless businesses throughout my state weathered a severe propane crisis this last winter,” Baldwin said in the press release. “Our goal should be to prevent future crisis, and this bipartisan bill takes common-sense action to help manage shortages more effectively by improving coordination.”

The Propane Education & Research Council’s consumer outreach activities, which have been restricted since 2009 by the U.S. Department of Commerce (DOC) due to rising propane prices compared to other heating fuels, are addressed in the bill.

According to a bill summary, the proposed legislation directs the DOC to more accurately calculate consumer propane prices, a key step toward having the restriction lifted. The restriction has prevented the propane industry from communicating directly to consumers about the general benefits of propane.

The bill also includes enhanced information-gathering tools for the Energy Information Administration (EIA) to better track propane supplies. Last winter, questions surfaced about the accuracy of inventory levels based on information EIA provided.

Propane reserves are addressed in the bill, as well. If passed, it would direct the energy secretary to study the feasibility of regional reserves as one way to mitigate future shortages.

Emergency response is yet another area addressed. The bill establishes the energy secretary as the coordinator of federal and state emergency response efforts in the event of future shortages. The bill also clarifies that propane shipments can be prioritized if an emergency situation occurs.

In addition, the bill puts propane tanks on the list of equipment covered by the U.S. Department of Agriculture storage facility loan program. It also directs the Government Accountability Office to examine whether propane at terminals and storage facilities is priced fairly.

With Congress beginning its August recess today, the National Propane Gas Association said it would now rally support for the bill within the states.

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