September 2013

ND Propane Gas Association

July 6, 2013

The Honorable Mark Doms

Undersecretary for Economic Affairs

U.S. Department of Commerce

Washington, DC 20230

Dear Undersecretary Doms:

On behalf of thousands of constituents from the Great State of North Dakota who are employed or served by the

propane industry, we are writing to urge you to revisit certain decisions made by the Commerce Department in

implementing the Propane Education and Research Act of 1996 (PERA).

PERA was enacted to enable the propane industry to establish the Propane Education and Research Council

(PERC). Currently, PERC collects 0.4 cents per gallon of odorized propane sold to develop programs related to

safety, training, research and development, and public education about safety and other issues associated with the

use of propane. Section 9 of PERA requires a periodic analysis of changes in the price of propane relative to other

energy sources. The comparison compares a five-year rolling average of the prices of commercial grade propane,

residential electricity, residential natural gas, and the refiner price to end users of No. 2 fuel oil. If the price

average of propane exceeds the average composite price of these other fuels by more than 10.1%, PERC activities

are restricted such that consumer education activities are no longer authorized.

The Department has made two flawed decisions over the years in its implementation of PERA. First, as a result of

utilizing a residential-only propane price calculation methodology, the Department incorrectly determined that the

price threshold was reached in 2009 and has restricted PERC from engaging in the full range of programs

authorized by PERA. Second, as a result of inaction since 2009, the Department has not performed another price

comparison, as is required by the law.

We strongly disagree with the Department’s interpretation of PERA to be a residential-only law. This

interpretation is unsupportable given the clear language of the statute that refers to a range of sectors –

commercial, agricultural, industrial, vehicular – served by the propane industry. The Department’s use of inflated

residential-only pricing data has caused aberrant results when performing the required price calculations under

Section 9, which led directly to the Department’s decision in 2009 to restrict PERC.

We are also deeply concerned that the Department, since 2009, has failed to comply with its statutory duty to

perform updated price calculations every six months. The Department maintains that it cannot comply with this

congressional mandate because the residential-only propane data previously used is no longer published by the

U.S. Energy Information Agency (EIA). However, EIA pricing data that fulfills all the requirements of PERA has

been, and continues to be, collected and publicly available. The Department’s decision not to utilize appropriate

EIA data to fulfill its obligations under the law has resulted in PERC being unable to perform all of its

congressionally authorized activities for years now.

Propane is a clean, domestically-produced, versatile alternative fuel that is used in many applications across the

United States. Increased use of propane will help America achieve many of its energy and environmental goals.

The Department has thus far refused to make changes to its policies implementing PERA, and this has had

significant, detrimental impacts on our constituents.

Thank you for your consideration of these concerns, and we look forward to your response on what actions have

been taken to address them.

Sincerely,

Mike Rud, NDPGA Executive Director

Page 2

NDPGA

Executive Committee

President

Dave Walth

Gray Oil

Vice-President

Ken Kornkven

Farmers Union - Portland

Secretary/Treasurer

Scholarship Coordinator

Dale Beck

Dakota Ag Coop

State Director

Ken Kraft

NDPGA

Board of Directors

Darin Adolphsen

LPG & NH3 Inc.

Dan Marler

Ferrell North America

Lee Fitterer

Fitterer Oil & Gas

Darrin Johnson

Northdale Oil, Inc.

Kevin Spaulding

H. A. Thompson & Sons

Steve Ketterling

Farmland Coop

Dan Erbes

FEI Inc

Kevin Schroeder

Northern Fuel Partners

Lyle Stevens

Horizon Resources

Staff Executive Director

Mike Rud

Office Manager

Mary Nagel

ND Propane Gas Association 1025 North Third Street Bismarck, ND 58501

Phone:701-223-3370

Dear Valued NDPGA Member:

Another summer has passed by oh so quickly. Your

association had a good board meeting in Medora this past

June. Several board members and myself traveled to

Washington in June as well. We had very productive

meetings with the ND Congressional Delegation briefing

them on the key issues facing the propane industry in ND.

One of the key issues as you can see from the front page

of this newsletter is restoring full funding to PERA. We

also urged the delegation to hold propane at the same

level of importance in the alternative fuels category as

natural gas.

Obviously, we live in a state where the talk of future uses for natural gas are

dominating potential alternative fuel conversations. My message to the Congressional

delegation as well as other transportation affiliated associations is quite simple - Let’s

not reinvent the wheel here if it’s not needed. We continue to hear all this talk about

CNG and LNG, but why not propane? It’s the third most used transportation fuel

behind gasoline and diesel fuel. We need to keep propane on the front burner when it

comes to alternative fuels for a number of reasons.

Did you know 70% of the propane produced in the U.S. comes from natural gas. From

a North Dakota perspective, we have over 100 retail refueling sites. More importantly,

for what it costs to install a CNG or LNG retail refueling station (500-750 thousand

per site) a marketer could install about 15-20 new propane refueling dispensers. The

kicker is propane is a proven and reliable fuel source in the consumer’s view.

So what do we do to make sure propane isn’t forgotten in this whole renewable fuels

push? We need to start building some networks with fleet operations like school

districts and city operations like police and maintenance departments. There’s a

proven savings in running propane. I know of one Kansas marketer who switched one

of his fuel trucks from diesel to propane and he saved roughly $500 a month in the

first year. As industry experts, you might need to lead by example. If the local school

district sees your truck running on propane, you might have a better chance of

convincing them to do the same.

At NDPGA, your president Dave Walth and I hooked the Garrison Golf Course up

with a propane powered lawn mower this spring. I visited with one of the board

members at the golf course and he told me the workers fight over who’s going to use it

because of the machine’s power and performance. In fact, there’s a good possibility

the Garrison golf course will purchase the mower. Next year, I would like to approach

the ND State Parks and Recreation Department about test driving a machine in their

facilities. Don’t forget, you as marketers have vendors in this association who can also

help you convince potential customers that propane is a good fit for their operations.

They would be more than willing to assist you in these efforts.

Someone just needs to take the first step. I hope it will be one of you. Let’s be proud

of the product you offer and tell your customer base and Washington, DC that propane

is the answer to our alternative fuel needs. I hope you have a great fall. Look forward

to seeing many of you at the state convention in October. Go Bison!

Mike Rud

Executive Director

Employee Propane Training Schedule

October 28 & 29 Basic Principles & Practices

October 30 & 31 Bobtail Delivery Operations

Alerus Center – Grand Forks

Registration sheets will be mailed soon.

To check on the status of your

CETP records, please contact

Industrial Training Services at

270-753-2150.

September 2013 Page 3

Page 4 Propane Exceptional Energy

Dear State Executives:

As you may be aware, OSHA has made several revisions to its Hazard Communication Standard

(HCS) to align it more completely with international (UN) regulations. The revised HCS requirements are more

prescriptive than the previous requirements, which were more performance-oriented, meaning that chemical

suppliers or employers had more flexibility in determining how to convey the hazard information than under the

new requirements. The changes pertain mainly to labels and safety data sheets.

To facilitate a better understanding of the changes to the HCS and in response to requests by the membership,

NPGA has developed the attached white paper.

There are several compliance dates associated with OSHA’s action. The first compliance date, December 1, 2013,

only requires that employees be trained on the new label and safety data sheet requirements. The topics to be

covered in this training are addressed in Section IV of the document. The compliance dates for actual, physical

changes to the labels or safety data sheets are not scheduled to kick-in until June 1, 2015, at the earliest.

If you have any questions, please feel free to contact our Director of Regulatory Affairs, Robby Helminiak

(rhelminiak@npga.org) or myself.

Sincerely,

Mike

Michael A. Caldarera, P.E.

Vice President, Regulatory & Technical Services

NATIONAL PROPANE GAS ASSOCIATION

1899 L Street, NW, Suite 350

Washington, D.C. 20036

202.466.7200

www.npga.org

Page 5 September 2013

JOIN AVITUS GROUP FOR HAZCOM TRAINING IN YOUR AREA OR ONLINE

OSHA Hazard Communication Standard CFR 1910.1200

Training Schedule & Location

Cost: $45/student, free for Avitus Group Members

Avitus Group will hold 2 classes at each location starting at 9:00 a.m. and 1:00 p.m. Each class will last

approximately 2.5 hours and will include hands on training.

On-Location Training REGISTER HERE

Billings, Sept. 16th, Edge Construction Supply 120 Moore Ln.

Bozeman, Sept. 17th, Comfort Inn 1370 N 7th Ave.

Butte, Sept. 18th, Comfort Inn 2777 Harrison Ave.

Helena, Sept. 19th, Comfort Suites 3180 N. Washington St.

Jamestown ND. Oct. 2nd Holiday Inn Exp. 803 20th St West

Bismarck ND. Oct.3rd, Comfort Inn 1030 East Interstate Ave.

Online Training REGISTER HERE

Select Hazard Communication Standard Training.

Page 6 Propane Exceptional Energy

Page 7 September 2013

2014 Dues Investment and

Vision 2014

Every year, NPGA faces about $115,000 in

incremental cost escalations associated with

rent, personnel compensation, and rising

operational costs. Factoring in the 3 percent

dues increase in 2011 and 2012 (which only

amounted to $11/plant), NPGA's expenses still

outpaced the increases by about a half million

dollars. We all see our expenses increase on

an annual basis, and we all work towards more

efficient budgets. But the reality is that we

can't accomplish our goals by only cutting

expenses.

Vision 2014 proposes several aggressive new

programs that require additional

funding. Some of these programs are already

underway, such as the Smart Communications

plan. Other plans such as Enhanced Agency

Outreach reflect the changing regulatory

environment. More resources are required to

reach the myriad of policy makers from

Congress, the EPA, DOE, DHS, OSHA, and

DOT tasked with regulating our industry.

Marketers 2014 NPGA Dues

Zero to 2 bulk plants or

headquarter $ 483

3-5 bulk plants (additional

combined price) $ 262

Greater than 6 bulk plants

(per bulk plant) $ 249

Page 8 Propane Exceptional Energy

LP Cylinders: Safe Exchanges, Filling

and Transporting

If your operation offers LP cylinder exchange or filling,

the following information and advice can help maximize

safety for your facility, employees and customers.

Overfill Prevention Devices

A cylinder’s overfill prevention device (OPD) valve

restricts the amount of LP that can be put into a cylinder,

ensuring adequate vapor space is left at the top to allow

the liquid to expand when the temperature changes. The

most common way to determine whether a cylinder is

equipped with an OPD valve is to look for the special

triangular handwheel stamped with the letters “OPD.”

Employees involved in cylinder exchange or filling

should be able to recognize OPDs and understand why

they are important.

Safe Exchanges

Exchange cabinets should both protect the cylinders

inside and allow adequate ventilation to the atmosphere.

The doors should be equipped with

locks to prevent theft or tampering

with valves. Place cabinets at least

five feet from any building

entrance and at least 20 feet from

fuel dispensers, and protect against

vehicle impact by installing

barriers. Post signs that warn the

public of the hazard and prohibit

smoking in the cabinet’s vicinity.

Train employees to determine

which cylinders are acceptable for

exchange. You may choose to limit acceptance of

exchanged cylinders based on presence of OPDs, dents,

gouges, age or other company or code requirements. It’s

a good idea to create written procedures for accepting/

rejecting cylinders and for proper placement of used

cylinders in the cabinet. Cylinders should always be

upright when placed in the cabinet. Refresh and

document your employees’ training every three years.

Filling Cylinders

Iowa code requires cylinders under 200 pounds to be

filled by weight. You should also use a secondary

method to make sure the cylinder isn’t overfilled. An

OPD is acceptable as a secondary overfill prevention

method and is required on cylinders that hold 4-40

pounds. Relying on the OPD as a primary filling

method is not allowed by code, so be sure your

employees aren’t relying on it as their sole method of

overfill prevention.

Transporting LP Cylinders

Transporting LP cylinders can be very dangerous, and

serious accidents can occur if safety precautions aren’t

taken. Before transporting, make sure the valve is

closed and all caps are in place. Place the cylinder

down gently on a firm base—they can be dented or

damaged if mishandled. Always secure the cylinder in

an upright position. Laying the cylinder on its side can

compromise the effectiveness of the relief valve,

causing liquid LP to be released with potentially

catastrophic consequences. Keep the cylinder away

from flame and heat. Drive directly to your destination,

avoiding long trips and unnecessary stops. In the

summer months, cylinders can overheat with even a

short stop, causing flammable gas to be released.

Remove the LP cylinder from the vehicle as soon as

you arrive at your destination.

Article courtesy of the Risk Improvement Department, EMC

Insurance Companies, Des Moines, Iowa.

For more information, go to www.emcins.com and select Loss

Control.

Page 9 September 2013

ND Petroleum Marketers – Propane Gas Associations Convention & Trade Show

Alerus Center & Canad Inn – Grand Forks, ND October 29 - 31, 2013

TUESDAY, OCTOBER 29

8:00 – 9:30 NDPMA Board Meeting

9:30 – 11:30 DOT Hazardous Materials Training - EMC

11:45 – 12:45 Lunch – UND Hockey Coach Dave Hakstol

1:00 – 2:00 Speculators effect on Petroleum & Propane Prices

John Wenzel - FCStone, LLC

2:00 – 3:00 Future of Fossil Fuels – Rob Underwood, PMAA

3:15 – 4:30 Petroleum General Business Meeting

5:30 Pre-Banquet Social & Live Auction

7:00 NDPMA Chairman’s Banquet

Evening Hospitality Rooms

WEDNESDAY, OCTOBER 30

7:30 – 9:00 Brand Meetings

9:00 – 10:00 DOT Truck Inspection

9:00 – 10:00 Eide Bailly LLP – Monitor employee activity

10:00 - 3:00 Trade Show

3:00 – 5:00 Propane General Membership Meeting

Propane Education & Research Council update

5:30 Propane Honors Social & Banquet

THURSDAY, OCTOBER 31

7:30 Breakfast – Solar Gas NPGA Chairman tentative

8:30 – 10:00 LPG Requirements - EMC

10:00 – 11:00 NDPGA Board Meeting

Canad Inn – 1000 S 42nd Street - 701-772-8404 Group #259991 - $89 + tax – standard room

Sleep Inn – 1350 S 42nd Street – 701-757-2900 - $89 plus tax

Spring Hill Suites – 2837 S 42nd Street - 701-757-4150 - $109 plus tax

October 28 & 29

Basic Principles & Practices

October 30 & 31

Bobtail Delivery Operations

Registration Form NDPMA & NDPGA Convention & Expo

October 29 – 31, 2013

Alerus Center & Canad Inn - Grand Forks, ND

Canad Inn – 1000 S 42nd Street - 701-772-8404 Group #259991 - $89 + tax - standard room

Sleep Inn – 1350 S 42nd Street – 701-757-2900 - $89 plus tax

Spring Hill Suites – 2837 S 42nd Street - 701-757-4150 - $109 plus tax

Room blocks will be released September 24. Please register before October 18 I will attend

Hazardous Materials

Training

Attendee ______________________________________________________________

Attendee ______________________________________________________________

Attendee ______________________________________________________________

Spouse ______________________________________________________________

Company ______________________________________________________________

Address ________________________________________________________________

City-St-Zip ____________________________________________________________

I would like an e-mail confirmation. E-mail address: ____________________________

Registration Fee Attendees Total

Petroleum

Tuesday October 29 Seminars – Lunch – Petroleum Banquet Wednesday October 30 Seminar – Trade Show

$160.00

_____

$

Spouse $ 50.00 _____ $

Propane

Wednesday October 30 Trade Show – Seminar – Propane Banquet Thursday October 31 Breakfast - Seminar

$140.00

_____

$

Spouse $ 50.00 _____ $

Trade Show Pass October 30 No meals or seminars

$ 25.00 _____ $

Full Registration Includes Trade Show Pass

TOTAL $__________

Mail to: NDPMA If you need assistance, please call us 701-223-3370.

PO Box 1956

Bismarck, ND 58502 or fax 701-223-5004