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Thune Engages President on Propane Shortage

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Washington D.C. (KELO AM) - Senator John Thune joined a number of his Senate colleagues in sending a letter to President Obama calling for him to engage all relevant agencies in propane shortage relief efforts. Propane shortages have been magnified recently as a result of the extreme cold weather conditions in South Dakota and other portions of the United States. Numerous factors have contributed to a strain on propane supplies causing prices to spike, including a late wet crop season, reduced rail deliveries, and pipeline maintenance issues.

“President Obama should use his existing authority, wherever possible, to help respond to this propane shortage,” said Thune. “Federal assistance and regulatory flexibility are critical to overcoming the hurdles that are currently preventing propane from reaching areas with shortages.”

Thune has been active in calling for regulatory relief to help increase propane supply in areas with critical shortages, like South Dakota. On January 24th, Thune called on the Federal Motor Carrier Safety Administration (FMCSA) to issue an emergency declaration for South Dakota, providing relief from existing Hours of Service limits for drivers transporting propane throughout the region, while still requiring drivers be fit to drive and operate safely. On January 28th, FMCSA granted Thune’s request for an emergency declaration for South Dakota and North Dakota and recently extended the declaration through March 1st. The additional flexibility will allow propane distributors to travel greater distances to procure additional propane for the South Dakota market, which should help reduce costs for families and businesses.

Thune was joined in the letter by Senators Tammy Baldwin (D-Wis.), Michael Bennet (D-Colo.), Roy Blunt (R-Mo.), John Boozman (R-Ark.), Sherrod Brown (D-Ohio), Dan Coats (R-Ind.), Thad Cochran (R-Miss.), Susan Collins (R-Maine), Joe Donnelly (D-Ind.), Richard Durbin (D-Ill.), Al Franken (D-Minn.), Chuck Grassley (R-Iowa), Tom Harkin (D-Iowa), Heidi Heitkamp (D-N.D.), John Hoeven (R-N.D.), Tim Johnson (D-S.D.), Angus King (I-Maine), Mark Kirk (R-Ill.), Amy Klobuchar (D-Minn.), Claire McCaskill (D-Mo.), Rob Portman (R-Ohio), Mark Pryor (D-Ark.), Jeff Sessions (R-Ala.), Jon Tester (D-Mont.), and Roger Wicker (R-Miss.).

The text of the senators’ letter follows:

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February 7, 2014

President Barack ObamaThe White House1600 Pennsylvania Avenue, NWWashington, DC 20500

Dear Mr. President:

We are writing on behalf of our constituents – families, farmers, and businesses – who are suffering from a significant spike in propane prices this winter.  In emergency situations, the law allows federal agencies to provide regulatory relief that will increase propane supply in areas with critical shortages, which is expected to lower costs.  Also, federal assistance can be provided to states and communities to address this very serious situation.  We ask you to identify and implement sensible strategies, provided by law, to guide federal agencies in assisting states with efforts to mitigate the effects of the current propane shortage.  In particular, we ask you to review all available options to facilitate and enable the transportation of propane to areas with shortages, via interstate pipelines and other modes of transportation.

According to the Energy Information Administration (EIA), U.S. propane stocks have fallen far below the 5-year seasonal average.  The most recent EIA report indicates that propane stocks are 24.0 million barrels lower than a year ago, a drop of 43.8%.  As a result, in many areas, residential and wholesale propane prices have doubled, or even tripled, since October.  Numerous factors, including extremely cold weather and transportation problems, have resulted in high usage, significant drawdowns, and low stocks.  Now, more than twenty states have issued disaster declarations related to the propane shortage. 

Homes, businesses, and farms desperately need propane, and the shortage threatens the safety of families and the financial stability of farms and businesses.  Thankfully, propane suppliers are already responding to market forces and taking extraordinary steps to increase supplies in hard-hit areas.  Until propane stocks recover, the government should continue to provide and/or expand short-term regulatory relief to incentivize these activities.  We are pleased that several federal agencies, such as the Department of Transportation and the Department of Energy, have responded to the propane shortage by providing regulatory flexibility and assistance.  We urge you to ensure the ongoing engagement of all relevant agencies, including the Department of Agriculture, Department of Health and Human Services, the Small Business Administration, and others.  We are looking forward to working with you to advance solutions to alleviate this propane shortage.

Sincerely,

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