The new U.S.
Department of Homeland
Security (DHS) rules on chemical security vastly undercount the number
of facilities covered by the government’s mandated compliance review.
The National Propane Gas Association (NPGA) estimates that the total
regulatory cost for industry and customer facilities could be $1.2
billion.
But a recent meeting between government and industry officials may
allow for a compromise before the final list of substances is published.
The DHS rules, mandated by Congress last year to regulate the security
of the nation’s chemical facilities, have an extremely low threshold
for propane storage. The 7,500 pound (1,785 gallons) threshold for
environmentally-friendly propane is so low that it will force tens of
thousands of retail facilities and customer sites to go through DHS’s
expensive “Top Screen” security process.
On June 11-13, hundreds of propane industry leaders from every state
will be traveling to Washington, D.C., to participate in the industry’s
annual Propane Days event. The industry hopes that Congressional
offices will take the time to ask the many industry attendees from
their state or district about these new rules and how each marketer and
their customers will be affected by this onerous new DHS regulation.
All propane retailers and hundreds of thousands of farms, small
businesses, and even homeowners who exceed the threshold for compliance
will have to submit to an online “Top Screen” survey that DHS estimates
will cost $2,300 to $3,500 to complete. Based on the survey answers,
DHS would determine if the facility was “high risk” and therefore fully
covered by the regulations.
“I don’t think DHS has any idea how many propane facilities fall
underthis arbitrary threshold,” said NPGA Senior Vice President Philip
Squair. “DHS estimates that only 40,000 – 50,000 facilities will have
to be initially screened to determine if they fit their 'high-risk'
standard. Our industry alone has at least 8,000 sites where propane is
stored for distribution to customers, and then there are the additional
storage tanks at customer locations. DHS has not counted those
additional propane storage tanks in their estimates.”
Using industry data, NPGA conservatively calculated that approximately
1.7 percent of all propane customers store more than 7,500 pounds of
fuel. A conservative estimate finds 136,000 industry customers would
have to complete a “Top Screen” survey. They range from campgrounds and
trailer parks, farms, homeowners, small businesses, construction sites,
large retailers,nursing homes, and hospitals. Add in the retail storage
facilities themselves and the totals exceed 144,000 sites for propane.
It is likely many customers will demand their propane marketer complete
and pay for the survey or switch to less environmentally friendly
fuels. In the state of Iowa, one small farm cooperative alone serves
nearly 9,000 farms and agricultural sites with more than 7,500 pounds
of propane. A major national propane marketer estimates that at least
21,500 customer and business locations would fall under DHS’s
threshold. And a small marketer in California estimates 200 of their
ordinary business customers each would have to submit a costly initial
survey to DHS or face fines. Like these three ordinary examples,
thousands of other businesses will be severely impacted by the new
rules.
For more information about the DHS rules, contact NPGA’s Philip Squair
at (202) 466-7200.
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