Congressional Propane Caucus Officially Formed

On May 21, 2015, Congressmen Robert E. Latta (R-Ohio) and Tim Walz (D-Minn.) announced the founding of the Congressional Propane Caucus.The caucus has been formed to provide a bipartisan forum to engage members of Congress, their staffs, and the public on issues of importance to propane consumers and the propane industry.
Congressional Propane Caucus Logo

“I am pleased to join my colleague Congressman Walz in leading this effort in the House. Thanks to an increase in domestic production and the development of shale formations across the country — including the Utica/Point Pleasant formation in my home state of Ohio — Americans are blessed with an abundance of this essential resource,” said Propane Caucus co-chairman Latta. “Propane is vital to our everyday lives; it heats our homes, aids in the production of our farms, and is increasingly being used as an alternative, clean-burning fuel for transportation. I am pleased to start this caucus in order to educate fellow members of Congress on the many uses of propane, its importance to the constituents we serve, and the issues both the industry and its consumers face.”

“I’m proud to lead this caucus with Rep. Latta. Propane is essential for hundreds of thousands of Minnesota families, not only to heat their homes during the long, cold winter, but also for cooking, laundry, and farming,” stated Congressional Propane Caucus co-chair Walz. “It is imperative that we do everything in our power to protect families and local businesses from facing the price shocks we witnessed in the winter of 2014, when a lack of supply put people’s lives and livelihoods at risk.”

The National Propane Gas Association (NPGA) noted in its NPGA Reports email on May 21 that recent developments in the energy sector have generated a strong domestic propane supply that is projected to remain plentiful for the foreseeable future. However, many challenges exist to ensure that Americans have an adequate supply of propane when they need it.

“The Congressional Propane Caucus was designed to focus on these challenges, so that Congress can ensure that propane continues to serve American consumers in a consistent, reliable, and affordable manner,” NPGA added.

Founding members of the caucus include five members of each party:

• Co-chair, Rep. Robert E. Latta (R-Ohio)
• Co-chair, Rep. Tim Walz (D-Minn.)
• Rep. Chris Collins (R-N.Y.)
• Rep. Sean Duffy (R-Wis.)
• Rep. Mike Kelly (R-Pa.)
• Rep. Ron Kind (D-Wis.)
• Rep. Dave Loebsck (D-Iowa)
• Rep. Rick Nolan (D-Minn.)
• Rep. Tom Reed (R-N.Y.)
• Rep. Peter Welch (D-Vt.)

Propane Caucus, Tax Credits Among Top Issues for Propane Days

Attracting members of Congress to the Congressional Propane Caucus, extending motor fuel tax credits, achieving parity with natural gas in Corporate Average Fuel Economy (CAFE) standards, and calculating the excise tax for propane on an energy content basis will be four primary areas of focus for the propane industry at Propane Days this month in Washington, D.C.

On May 21, Congressmen Robert E. Latta (R-Ohio) and Tim Walz (D-Minn.) announced the founding of the Congressional Propane Caucus. Latta and Walz have agreed to chair the caucus, and asking members of Congress to join will be a primary goal in the propane industry’s meetings with legislators. The caucus will be made up of legislators who have shown interest in propane issues in the past, and with whom the propane industry could work in the future.

Extending the motor fuel tax credits that expired at the end of last year and passing an excise tax equalization bill are two other actions that propane industry attendees at Propane Days will ask Congress members to take. Phil Squair, National Propane Gas Association (NPGA) senior vice president of governmental affairs, told BPN on May 4 that the issues list could change if additional concerns come up as Propane Days approaches.

Reps. Latta and Walz sponsored the Propane Education and Research Enhancement Act of 2014, which resulted in the lifting of the consumer education restriction on the Propane Education & Research Council. “We’re very happy to continue working with them,” Squair stressed.

The caucus is being set up as a means to communicate, Squair added, and the need for that was amplified during the supply and infrastructure challenges of the winter of 2013-2014.

“We have many things to tell the Hill, and the Hill is very concerned about deliverability issues and infrastructure changes. Members of Congress who have a particular interest in learning and staying abreast of propane issues can join the propane caucus and keep in touch with what we’re doing. It will be a two-way street: They will be able to hear from us, and we will be able to send things directly to the caucus, those who have expressed interest in our issues.”

The “ask” of the Congress members at Propane Days will be for them to join the caucus. In addition to Latta and Walz as co-chairs, eight additional congress members agreed to join the caucus as of May 21.

Extending the 50-cent-per-gallon tax credit for propane autogas and the refueling infrastructure tax credit have been on past Propane Days “ask” lists, and will be on the list of issues for the propane industry to discuss with legislators and their staff members again this year. Squair has said that Congress members are currently awaiting action on broad tax reform issues before taking a public position in favor of tax credits and extenders, but the propane-related ones are important to the industry.

Propane industry members will also work to persuade legislators to extend Section 179 expensing and bonus depreciation. Section 179 allows small business owners to immediately deduct the cost of investments in property, equipment, and computer software rather than depreciating such costs over time. According to Squair, that gives owners flexibility to reinvest in their business and simplifies their accounting practices, adding that the provisions “would also help companies on the near term make investments and do the things they do and give a little bit of certainty to these companies that don’t have it right now.”

Convincing legislators to support excise tax equalization bills currently in the House and Senate is another area that the propane industry plans to emphasize at Propane Days. The bills call for calculating the propane excise tax on an energy content basis rather than on a per-gallon basis. Because a gallon of propane has less energy content than a gallon of gasoline, a calculation based on energy content will reduce the excise tax on propane as a motor fuel, currently at 18.3 cents, to 13.4 cents. A decrease in the excise tax, along with reinstating the tax credits, will help propane compete better with gasoline as an engine fuel.

The schedule for Propane Days was still preliminary when Squair spoke to BPN. NPGA will hold its board of directors meeting on June 8. To start the Propane Days schedule on June 9, NPGA will present a legislative briefing in the morning to provide more detail on topics in the issue briefs. At press time, NPGA had invited Latta to be a guest speaker to expand on the benefits of the Propane Caucus and other issues. Charles Krauthammer, a Washington Post political columnist and television commentator, will return to give a presentation at Propane Days this year.

“I know people really enjoyed him last year,” Squair commented. “With all the talk already happening about the presidential election and the various personalities that are involved, and the challenges we have in foreign policy, he’s going to have a pretty compelling presentation.”     —Daryl Lubinsky

Global Network to Promote Women in LPG

The World LPG Association’s (WLPGA) Industry Council on May 19 approved a Women in LPG Global Network (WINLPG), with goals to support and retain women already in the industry, to promote the use of lobbying and advocacy through media and at industry events, and to educate and attract women to the propane profession.
WIP Brown

Alison Abbott, WLPGA marketing and communications director, said the association has been working on the concept of a global LPG network for women since the National Propane Gas Association held its initial Women in Propane Council event in Atlanta in 2012.

“We were very impressed and thought, is this something that can be rolled out globally?” Abbott explained.

WLPGA tested the waters this past October, holding a women in propane event during the association’s World Forum in Miami. The event was well-attended, and soon afterward the association’s president Kimball Chen asked Abbott to conduct a feasibility study of creating a Women in Propane Group as one of WLPGA’s global networks. WINLPG will be the fourth global network of the association. The others focus on cylinder management, technology, and autogas.

At the association’s Industry Council meeting this past January in South Korea, Abbott presented her study, which concluded that the association should move forward to create WINLPG. Since then, Abbott has worked on forming the council and determining its overall strategic goals and who will run it. Rather than starting from scratch, she looked at established women’s groups in the nuclear, mining, solar, and engineering industries as well as a women’s group at the International Gas Union.

“They have all been sharing their failures and successes and given me an excellent start on how we can structure this network,” she noted, adding that the Women in Nuclear network is a global group based out of London with about 25,000 members.

“It’s a bigger industry than ours, of course, and it has been going for 20 years.” The nuclear group has shared information with Abbott on how the group operates. She noted that a high percentage of nuclear industry members are male. “If you think about it, we share a lot of the same challenges with the nuclear industry.”

To further illustrate the need for a global women in propane group, Abbott shared information from Energia, an international network that focuses on women’s issues in the energy industry. Energia notes that most LPG consumers are women. But Energia noted the small percentage of women within the propane industry at all levels. Abbott pointed to another study showing that having more women in management positions improves a company’s financial performance and can boost company returns and that companies with women on their boards outperform their rivals.

She expanded on the three initial goals of WINLPG. Regarding the support and retention of current women in the propane industry, Abbott said the association will track what measures are in place at various propane companies and will look to start a networking process so women in the propane industry can communicate with each other. The second goal of promoting the use of lobbying and advocacy through media and at industry events will take place by promoting role models and conducting case studies and making the case at various industry events.

Regarding the third goal of educating members and attracting women to the industry, Abbott said the association will conduct a “gap” analysis, reviewing how well-represented women are at various propane companies in different countries. The analysis will take place next year.

A launch meeting during this year’s World Forum Sept. 29 in Singapore will be the next step for WINLPG. Planning of the women in propane program is in the early stages, but the association plans to present speakers and a roundtable discussion related to women in propane. Nikki Brown, managing director of Cavagna UK, will serve as the first WINLPG chair.

WLPGA members can join WINLPG and the other global networks, and the association is still determining eligibility to join the new network. But Abbott hopes to see wide participation, with at least one council member from every continent. She also hopes to see WINLPG operate as more than just a networking group. The network will seek to promote the concept that women have a unique set of qualifications and abilities that can contribute to any business.

“We want to see how we can educate people and develop international networks,” Abbott said. “The issue is that gender balance is not optimized in the LPG industry, and WLPGA is in a unique position to start to make a change, this change to be driven by a network that will recommend actions and activities as part of the WLPGA strategic planning process.” —Daryl Lubinsky

Ferrellgas Partners to Buy Bridger Logistics for $837.5 Million

Ferrellgas Partners LP (Overland Park, Kan.), the nation's second largest propane retailer known for its Blue Rhino grilling tanks, today announced that it has entered into an agreement to purchase Dallas-based Bridger Logistics, LLC, a provider of integrated crude oil midstream services, for a purchase price of approximately $837.5 million. The acquisition positions Ferrellgas to significantly expand its midstream services division that was established in May 2014, when it acquired Sable Environmental, LLC. Under the terms of the agreement, Bridger will receive $562.5 million in cash and 11.2 million in Ferrellgas common units.
Ferrellgas Acquires Bridger Butane Propane News
"We are extremely pleased to welcome Bridger into the Ferrellgas family," said Stephen L. Wambold, Chief Executive Officer and President of Ferrellgas in today's announcement. "It is a remarkable organization with a proven record of developing robust midstream assets and executing long-term growth initiatives. We'll benefit greatly from their collective experience and deep customer relationships as we continue to pursue midstream-focused growth opportunities." The Bridger acquisition offers a comprehensive portfolio of crude-focused midstream assets creating a platform from which Ferrellgas can execute long-term midstream growth initiatives. "This is a landmark transition for Ferrellgas and represents a key milestone in our diversification efforts," said Todd Soiefer, Ferrellgas' Senior Vice President of Strategic Development.

Bridger Logo Acquired By Ferrellgas
Named the "Fastest Growing Energy Company" in 2013 by Inc. Magazine, Bridger Logistics, LLC, operates in 14 states across major U.S. crude oil production regions including Permian and Bakken shales. Bridger will continue to operate as an independent entity inside of Ferrellgas. Bridger president and chief executive officer, Julio Rios, will continue to oversee its operations and will report directly to Mr. Wambold. "Today marks another exciting step in Bridger's history," said Rios. "We believe in Ferrellgas' long-term strategic vision, and its collective resources create an opportunity for us to expand Bridger's existing mid-stream footprint and continue to provide an unmatched level of service to our customers." Bridger's core executive managment team will join Ferrellgas.

The transaction is expected to close by July 1, 2015, pending customary closing conditions.

Nu Star Energy Partners With CHS Inc. To Construct Pipeline In Conway To Support Propane Demand in Upper Midwest

San Antonio-based NuStar Energy L.P. recently announced plans to collaborate with CHS Inc. - a leading supplier of propane at Minneapolis - to support growing demand for propane in the Upper Midwest.

The alliance would construct an expanded pipeline and terminal network that would act as a booster to the region's propane supply. The network would connect to a Midwest hub for storage and fractionation facilities of propane.
NuStar logo
The expansion project would include the construction of an eight-inch pipeline in Conway that will likely spread over roughly eight miles. With the completion of the development - expected fourth-quarter this year − considerable higher propane will be delivered and stored in the hub.

NuStar added that upon completion, the expansion project will be immediately accretive to its bottom line.

NuStar is a master limited partnership that engages in the transportation and storage of crude oil as well as refined products in the U.S., the Netherlands Antilles, Canada, Mexico, and the U.K.