February 7, 2014
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 lower costs and increase propane supply in areas with critical shortages. Also, federal assistance can be provided to states and communities to address this very serious situation. We ask you to identify and implement sensible authorities, provided by law, that agencies can use to mitigate the effects of this propane shortage. In particular, we ask you to review all available options to facilitate and enable the transportation of propane to areas with shortages, especially via interstate pipelines, but also via highways, railways, and waterways.
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 25.8 million barrels lower than a year ago, a drop of 44.9%. 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 look forward to working with you to advance solutions to alleviate this propane shortage.