FERC announces process to resolve Midwest propane constraints

The Federal Energy Regulatory Commission said that it will initiate an alternative dispute resolution (ADR) process with pipeline operators, shippers, and their representatives to explore actions which can be taken to alleviate propane pipeline constraints in the Midwest.

FERC acted after Iowa Gov. Kim Reynolds (R) and several US House and Senate members expressed concerns following reports of propane distribution and supply difficulties in the region.

Its Nov. 20 announcement came 5 days after Reynolds signed a proclamation that temporarily will allow vehicles transporting propane and anhydrous ammonia to be oversize and overweight effective Nov. 16. It is scheduled to expire on Dec. 15.

The late harvest and high demand for petroleum products throughout the Midwest have resulted in low supplies of propane as well as difficulty transporting adequate supplies of anhydrous ammonia for agricultural activities, the governor indicated at the time.

Reynolds signed a proclamation on Oct. 31, expanding the hours of service for propane transporters. The governors of South Dakota, North Dakota, Indiana, Wisconsin, and Minnesota have issued similar proclamations, according to the National Propane Gas Association.

It noted that the National Motor Service Carriers Association, a US Department of Transportation agency, issued an emergency declaration waiving hours of service limits through Nov. 30 for propane and heating oil suppliers in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota, and Wisconsin.

NPGA said that propane is the third most widely use fuel in US households and businesses (behind electricity and natural gas) for space heating, water heating, and cooking. It also is used on more than 800,000 farms to dry crops, the Washington-based trade association indicated.

Contact Nick Snow at [email protected]