Propane industry news roundup: June 2007

33-pound composite cylinders made by Lite Cylinder Co. removed from service following ruptures

FRANKLIN, TENNESSEE – The Pipeline and Hazardous Materials Safety Administration (PHMSA), an agency of the Department of Transportation, has ordered about 5,000 33-pound composite cylinders manufactured by The Lite Cylinder Co. removed from service.

The decision to remove the linerless, fully-wrapped fiberglass composite cylinders comes after five cylinders ruptured in April at a Heritage Propane storage facility in Miami. All cylinders of this same design are being removed while the agency investigates the cause of the failures and any problems in the manufacturing process of the two-piece units, which are adhesively joined to form the completed cylinder.

Lite Cylinder, located in Franklin, Tenn., issued a statement saying only 33-pound cylinders manufactured under DOT-SP 13957 need to be taken out of service, regardless of manufacturing date.

The company began production of the new technology cylinders in April 2006. It offers 10-, 20-and 33-pound composite cylinders, and has sold about 13,000 of them to date, according to CEO Darrel Reifschneider.

Lite Cylinder, which was forced to stop all production and sales of the cylinders on May 10, has filed an appeal to the DOT suspension. The company is working to ensure its products are safe and hopes to be reinstated, Reifschneider said.

PHMSA recommends that empty cylinders be returned to T.L.C.C.I. Inc., 112 Alpha Drive, Franklin, TN, 37064 and the serial number of each cylinder be reported to the agency. PHMSA stresses that the cylinders be discharged and purged only by qualified individuals.

PHMSA requests information on any other failures of cylinders that may not have been reported to the agency. Contact Cheryl West Freeman, Office of Hazardous Materials Technology, at 202-366-4545 or Wayne Chaney, Office of Hazardous Materials Enforcement, at 202-834-3568.

Gas grills recalled for potential fire hazard

NORTH WILKESBORO, NORTH CAROLINA – The Consumer Product Safety Commission is recalling about 36,500 gas grills manufactured by Sagittarius Sporting Goods of China because of a potential fire hazard.

The Perfect Flame Four-Burner Gas Grills were imported by L G Sourcing Inc., of North Wilkesboro, N.C., and were sold at Lowe’s from September 2006 through February 2007 for about $400.

Some of these grills could be missing a hose that connects the grill manifold to the side burner, which poses a risk of fires and burn injuries to consumers. According to the Consumer Product Safety Commission, about 30,000 of these grills in inventory were inspected, and 17 were missing hoses. No injuries or consumer incidents had been reported.

The recall involves 25-inch by 18-inch Perfect Flame brand, four-burner, stainless steel gas grills with date codes JU, JV, JW, JX, JY, or JZ. The name “Perfect Flame” is on the grill hood. The model number, 2518SL, and the date code are located on a label inside the left front door of the grill.

Consumers should inspect their grills and determine whether the hose is in place. If not, they should call Sagittarius toll-free at 888-804-7455 for instructions.

Eastern Propane & Oil honored for health plan

LAS VEGAS, NEVADA – The 2007 Consumer-Driven Health Care Expo has honored Eastern Propane & Oil of Rochester, N.H., for having the best implementation procedures for its Consumer-Directed Health Care Program.

The award was presented to Brian Boudreau, vice president of Human Resource and Risk Management, as part of the Prepaid Card Awards Ceremony, which took place during the CDHC awards dinner Feb. 27 in Las Vegas.

Eastern Propane & Oil first gave its employees a consumer-driven healthcare plan option as part of their overall benefits on Jan. 1.

Propane shippers win safety award

JACKSONVILLE, FLORIDA – Three propane shippers are among winners of the Chemical Safety Excellence Award from CSX Transportation Inc.

The winning shippers are Aux Sable Liquid Products Inc., ConocoPhillips and Targa Midstream Services LP.

The 2006 winners included 62 CSXT customers who are committed to rail car maintenance and safety as well as continuous safe tank car loading. Eligible recipients must ship more than 600 railcars during the year without experiencing a single non-accidental release. The winners were recognized at a ceremony in Atlanta on May 9.

Biogas project wins EPA award

DAVIS, CALIFORNIA – The Biogas Energy Project has won praise for developing a new waste-to-energy technology that is fueled by propane.

The research project is a joint endeavor by the University of California-Davis, Onsite Power Systems, the Propane Education & Research Council and the Western Propane Gas Association. The project is the brainchild of the university’s Dr. Ruihong Zhang.

It was recognized by the ninth-annual Environmental Protection Agency Region 9 Environmental Awards in April.

The project features an anaerobic digester that uses bacteria to break down and convert animal, plant and food waste into biogas, a form of methane. The technology allows up to eight tons of food and yard waste each day to be converted into enough energy to power nearly 80 homes. Propane serves as a supplemental power for start-up, shutdown and temperature control for the digester. PERC funded the purchase of two propane-powered boilers, a low-emission, California Air Resources Board-certified propane engine, and a generator for the project.

Propane fuel infrastructure earns tax credit

WASHINGTON, D.C. – The Internal Revenue Service will grant tax credits for infrastructure improvements made to propane vehicle fuel refueling stations, according to its May 2 guidance.

An alternative fuel vehicle refueling property includes property for the storage or dispensing of a clean-burning vehicle fuel such as propane, but only if the storage or dispensing of the fuel is at the point where such fuel is delivered in the fuel tank of the motor vehicle. The provision allows taxpayers a 30 percent credit for the cost of installing this infrastructure to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer.

The credit can be applied to infrastructure installed after Dec. 31, 2005, and before Jan. 1, 2010.

For more information, check out www.npga.org and click on “Energy Policy Act of 2005 Federal Tax Credits.”

Bobtail tax will not increase in 2007-2008

WASHINGTON, D.C. – Propane haulers will not see their federal bobtail tax increase during 2007-2008 after Congress decided to allocate the same amount to the Department of Transportation that it had in the previous budget.

DOT had hoped for $28 million in this budget cycle, but Congress declined to do so, according to the National Propane Gas Association. However, the association added, discussions about an increased tax may surface for the 2008 fiscal year appropriations.

Arizona passes limited-liability legislation for marketers

PHOENIX, ARIZONA – Arizona’s governor has signed a bill establishing limited liability for propane marketers in that state.

The bill, which was signed by Gov. Janet Napolitano on May 1, will take effect in late August or September. The law limits liability for Arizona’s propane marketers in proportion to the marketer’s percentage of fault when the cause of injury or damage from an accident was clearly not the fault of the marketer.

Arizona is one of 13 states with similar laws designed to protect propane marketers from predatory lawsuits. The Arizona effort was led by its propane gas association, including Barry Aarons and APGA President Lisa Gerwitz.

Char-Broil recalls grills with wrong heat shield

COLUMBUS, GEORGIA – Char-Broil LLC of Columbus, Ga., is recalling about 600 gas grills with an incorrect heat shield.

Some of the grills, sold exclusively at Big Lots stores between January and March, had an incorrect heat shield that does not fit the grills. Without the correct shield, the propane tank, hose and regulator could overheat and damage the components, presenting a risk of fire or burn if a propane leak occurs. Five consumers reported receiving grills without the correct heat shield. No injuries were reported.

The affected Char-Broil grills, model number 463720407, are two-burner grills with a swing-away rack, two side shelves and a condiment basket. Serial numbers range from G305040611002821 to G305040611003420.

Consumers should determine whether the heat shield is properly installed. If it is missing or cannot be installed according to the directions, contact Char-Broil toll-free at 866-671-7988 or visit www.charbroil.com.

Propane exemption for farmers dies in committee

OLYMPIA, WASHINGTON – A committee chairman of the Washington state Senate has nixed a bill that would have exempted propane from sales and use taxes when used for agricultural purposes.

The bill, which passed the House March 13 and was approved by the Senate’s Agriculture & Rural Economic Development Committee, progressed to the Senate’s Ways and Means Committee. However, that committee’s chairman killed the bill without consideration by the committee, said Baron Glassgow, executive director of the Northwest Propane Gas Association.

The decision “was unfortunate as it had the OK from both majority and minority caucuses, and little known opposition,” Glassgow said. “We will be reintroducing the bill next year.”

The state already exempts diesel and aircraft fuel used by farmers for soil preparation services, crop cultivation services and crop harvesting services. This bill would correct the omission of propane from last year’s measure.

Washington’s department of revenue originally calculated the bill would mean a loss of $5.3 million in tax revenues, but revised its estimate to $3.1 million.

AmeriGas acquires cylinder refurbishing company

VALLEY FORGE, PENNSYLVANIA – AmeriGas Partners LP announced that it has acquired the assets of McKnight Cylinder, Ruffs Dale, Pa.

McKnight Cylinder is the largest independent cylinder refurbisher in the country. Its primary business is the testing and refurbishing of grill-sized cylinders, DOT cylinders and propane tanks for AmeriGas and other propane distribution companies.

Women enjoy grilling, but admit qualms about safety

WASHINGTON, D.C. – A new survey by the Propane Education & Research Council shows women are increasingly staking their claim to what used to be a man’s domain – the grill.

According to the survey, 34 million women use the grill several times a week during the grilling season, with another 3.4 million using it every day. Some 37 percent of women polled say they are the primary griller in their household, and almost 40 percent of women say they’re grilling more today than in previous years.

Results were drawn from a nationally representative sample of 409 adults who own an outdoor gas grill. Interviews were conducted by telephone in January.

Respondents said they enjoyed grilling for its superior taste (54 percent), less kitchen cleanup (42 percent) and keeping the kitchen cooler (38 percent).

According to the Hearth, Patio & Barbeque Association, 15 million new grills were shipped in 2005, and PERC says 22 percent of these purchases were driven by women.

However, 31 percent of the surveyed women said they did not know enough about safe use of the grill, and 44 percent felt their significant other would do a better job at following safe grilling practices.