Do You Remember Department of Homeland Security Top Screen Program?

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1 November 2017 ND Propane Gas Association Do You Remember Department of Homeland Security Top Screen Program? Propane marketer facilities with more than 60,000 pounds of propane should have submitted a Top Screen application back when the Department of Homeland Security program initially began in Recently, the DHS revised the program to Chemical Facility Anti-Terrorism Standards (CFATS 2.0) and is requiring that all applicants resubmit initial applications. DHS may contact propane facilities by mail, or telephone to notify the facility of the requirement to resubmit information to the CFATS program. This updated program is to provide more accurate analysis of facilities and potential threats; and, therefore, identify facilities that may or may not require continuing participation in the CFATS program. The update may cause some facilities to submit different information on Top Screen applications, Security Vulnerability Assessment applications, and Site Security Plan applications. More information on the CFATS program and the revisions is available here: Please direct questions to Sarah Reboli, Director of Regulatory Affairs. - National Propane Gas Association. CFATS Compliance Webinar What Marketers Need to Know NPGA will host a webinar December 14 to provide guidance and information on the revised requirements of the Chemical Facility Anti- Terrorism Standards (CFATS) program by the Department of Homeland Security (DHS). All locations with 60,000 pounds of propane or more must participate in the CFATS program. After an initial application with information about the location and propane storage, DHS may or may not require facilities to submit other applications and potentially install additional security measures. The NPGA webinar will detail this process and hold a Q&A session. NPGA staff are also available for individual follow-up to answer facility-specific questions. We will keep you informed on how to register for the December 14 webinar. This event is open to members only.

2 NDPGA Executive Committee President Scholarship Coordinator Dale Beck Dakota Plains Ag Vice-President Lyle Stevens Horizon Resources Secretary/Treasurer Dan Marler Ferrell North America State Director Ken Kraft NDPGA Board of Directors Darin Adolphsen LPG & NH3 Inc. Lee Fitterer Fitterer Oil & Gas Darrin Johnson Northdale Oil, Inc. Jim Renke Southwest Grain Steve Ketterling Farmland Coop Dan Erbes FEI Inc Joe Fouhy Farmers Union - Beulah Dave Walth Gray Oil Jason Behm Behm Enterprises Staff Executive Director Mike Rud Office Manager Mary Nagel ND Propane Gas Association 1014 E Central Avenue Bismarck, ND Phone: Page 2 Valued NDPGA Members: It s the most wonderful time of the year! The Christmas and New Year season are upon us once again. Mary and I would like to take this opportunity to wish all of you a very Blessed Merry Christmas and Prosperous 2018! Thank you for all you do to support and advance the association efforts! What would make it feel even more like Christmas would be some colder temperatures. We had a nice shot of cold weather earlier in the fall, but that appears to be giving way to a not so welcome warm up as we roll into December. All the talk on the national level has been concern of propane supplies as meteorologists and other weather experts continue to call for below normal temperatures and above normal precipitation for the Upper Great Plains. So far, none of these predictions have materialized. The propane industry is on the last days of an HOS Waiver in ND. As I stated in my conversations with the Governor s staff, I questioned whether the HOS was truly needed. I think enough farmers contacted ND ag commissioner Doug Goehring and he was able to persuade the Governor to grant the transportation hours extension for 30 days. I hope it served a useful purpose. As I ve stated many times before these HOS waivers are difficult to come by and our #1 priority as an association has to be ensuring propane marketers can cover the residential needs of all their customers during the winter months. If we do get a much needed cold snap, I hope the waiver for crop drying doesn t hurt the industry s chances of getting an HOS exemption if supplies get tight. Speaking of supply updates, the following links can be accessed to see what the experts are saying about supply in the year ahead for our area. IHS continues to see the possibility of low days of supply in the winter months and critical levels of inventory in early The low inventory situation we see today is being driven by PADD 3 currently. IHS is closely monitoring contract and spot propane export cargos over the next several months to determine if days of supply will continue to face downward pressure in the winter months. The current forecast assumes slightly warmer than average winter Heating Degree Days and residential/commercial demand. Propane Monthly Stock Report November Snapshot November 2017 Summary NDPGA continues to hold meetings in state with the Congressional Delegation. Nearly a dozen NDPGA marketers met with Congressman Cramer at his Bismarck office in September. At the urging of NDPGA, Senator Heitkamp recently submitted a letter to new EIA Chief Rick Perry on the industry s behalf calling for modernizing and improving the quality of EIA's days of supply data. You can read EIA s response below: In response to the concerns expressed in your letter to Secretary Perry and our meetings with the National Propane Gas Association (NPGA), EIA will Propane Exceptional Energy

3 provide two additional measures of supply adequacy during the winter heating season. In addition to its traditional measure of supply adequacy that is already used by many in the energy community, EIA will also publish: 1) an estimate of current inventories divided by product disposition, which is defined as product supplied and exports, as suggested in your letter, and 2) an estimate based on the average peak demand weeks for the previous five winters. These additional measures will be labeled "days of disposition" and " days of supply under severe weather conditions." Together, these measures should provide additional information so that propane dealers and customers can plan adequately. This range will be included in EIA' s Propane Situation Update briefing deck published every week on the widely used Winter Fuels page. On October 17, Senators John Thune (R-SD) and Amy Klobuchar (D-MN) introduced a bill that would require, not later than 30 days after enactment, "that any data published relating to days of supply of propane inventories in the United States include a calculation of the volume of exports of propane." NPGA strongly supports this bill, and lobbied Capitol Hill for it as one of the major Propane Days "asks" earlier in the summer. We will keep you posted as the winter unfolds. We ask you to do the same. Keep the Flame Lit! Mike Rud November 2017 Page 3

4 Expanding the Short Haul Operation Exemption In line with the regulatory reform agenda of the new administration, NPGA is pursuing an expansion of the airmile radius component of the Short Haul Operation exemption. Through the Short Haul exemption, drivers who operate under specific conditions are not required to maintain Record of Duty Status (RODS) reports. Among the conditions is that throughout the day drivers must remain within a 100 air-mile radius of their work reporting location. NPGA is seeking an expansion of the radius from 100 to 300 air-miles, based on improvements in highway accessibility and commercial vehicle technology. Expanding the radius to 300 air-miles could save the industry $11 million annually in paperwork costs. On June 16, 2017, we proposed this reform to the U.S. Department of Transportation (DOT). On August 17, 2017, NPGA met with political appointees of DOT to discuss expansion of the air-mile radius, and NPGA is currently analyzing results of a survey to collect additional information to support the significant increase to the air-mile radius. We plan to meet with DOT again in the near future to examine the additional information. An expansion of the air-mile radius would allow propane marketers to serve more customers and grow gallons. It also meets the reform agenda of the new administration by reducing regulatory burdens on small businesses and facilitating growth for domestic energy supplies. Page 4 Propane Exceptional Energy

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6 Code Harmonization Efforts Continue Between U.S. and Canada The Manufacturers Section met and reviewed progress on the PERC-funded project to determine the maximum allowable wear profiles for ACME threaded couplings used during liquid transfer operations into cargo tank vehicles. Testing should be completed by the end of this year. The group also discussed efforts to harmonize standards between the U.S. and Canada, specifically the standards that address hoses and propane powered vehicles. It was generally acknowledged that although the Canadian propane vehicle code is more specification oriented, NPGA members in the U.S. were more likely to prefer codes that are more performance oriented. With respect to hoses, it is hoped that Underwriters Laboratories and CSA Group will work to ensure that the methods for classifying hoses are consistent between the two organizations. Cylinder Exchange Council Considers NFPA 58 Proposals The NPGA Cylinder Exchange Council met considered several issues that impact the cylinder exchange segment. One issue pertains to the possibility of including markings on cylinder valves to indicate that a No. 72 drill size orifice is used with the fixed maximum liquid level gauge. This is significant because these smaller orifices do not emit as much propane as the larger No. 54 orifices during the volumetric filling process, perhaps making them more desirable in locations where low emission transfer operations are required. There was also discussion on proposals submitted to NFPA 58 for the next development cycle. These proposals were submitted by another group and would impact the type of fire extinguishers required to be installed at cylinder exchange locations. It was decided to request NPGA representatives to oppose those proposals. Page 6 Propane Exceptional Energy

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8 Tax Reform Moving Swiftly Through Congress Major tax reform bills are moving swiftly through both the House of Representatives and the Senate. On the House side, the legislation was reported by the Ways and Means Committee last week and is expected to be on the House floor and pass on Thursday November 15. On the Senate side, the Finance Committee is debating their alternative bill with the intent of reporting it out sometime next week. The House bill has a number of provisions important to NPGA. The bill increases the bonus depreciation percentage to 100% for property acquired and placed in service after 9/27/17 and before 1/1/23. For small businesses operating as pass-through entities, the bill treats a portion of net income as business income subject to max 25% rate instead of at the ordinary income tax rate. The bill increases the Section 179 expensing limit to $5 million and the phase-out range to $20 million for The bill unfortunately extends the residential energy credit for geothermal heat pumps through 2021, but on the upside it repeals the $7500 tax credit for electric vehicles. Finally, the legislation increases the estate tax exemption amount to $10 million, indexed for inflation, beginning in 2018 and repeals the estate tax in On the Senate side, the bill under debate has the following provisions: bonus depreciation would be treated similarly to House bill, but the small business pass-through provisions are less favorable than the House bill. It increases the Section 179 expensing limit to $1 million and the phaseout range to $2.5 million for 2018 and beyond. Importantly, the bill will not contain any energy tax provisions at all, and the Committee has announced that they will be taken up as a separate extenders package by the end of the year. Finally, the bill increases the estate tax exemption amount to $10 million, indexed for inflation beginning in NPGA is closely watching these developments and will report further developments as they happen. It is likely that the House and Senate will end up passing different bills, which will require the differences to be reconciled through a conference committee. Nevertheless, Congressional Leaders have repeatedly stated they intend to send a bill to the President by the end of the year. National Propane Gas Association Priorities The Executive Committee discussed the strategic priorities and initiatives of the association. The primary purpose of the October meeting of is to consider NPGA's draft budget for FY2018/19, and the committee also discussed the 90-Day Criticals, key advocacy issues within the organization, for the fourth quarter. These issues include: tax reform winter preparations & supply expansion of the short haul exemption state engagement natural gas expansion To learn more about the 90-Day Criticals, please visit policy/propane-issues/. The next meeting of the Executive Committee will be January 4-5, 2018 in Washington, DC. Page 8 Propane Exceptional Energy

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11 CETP Registered Skills Evaluator Number Beginning October 1, 2016, all CETP Skills Assessments are required to have a registered Skills Evaluator number in order to be processed. ITS will not process any Skills Assessment received without the registered Skills Evaluator number on October 1, 2016 and thereafter. The cost of the Skills Evaluator Training is $75 and the registration will remain current for 3 years. If you have questions, please contact Janet at Industrial Training Services at (270) The following steps will guide you the through the process of the Skills Evaluator Training: Login to the OnBoard LMS at If you have been a stakeholder company in the Castle system or have previously taken CETP exams you are already set up in the system. User Name: your last name + last 4 digits of your social security number example: Smith1234 Password: first initial of your first name, first initial of your last name + last 4 digits of your social security number example: bs1234 If you have never done either, go to and register as a new user. Click on the Proctor/Skills Evaluator Training Instructions to review the step-by-step guide for Purchasing your own Proctor Training/ Skills Evaluator Training. Skills Evaluators completing their training and passing their exam will be given a Registered Skills Evaluator Number to be used on all Skills Assessment Affidavit forms. Page 11

12 Can a 1,000 Pound Anhydrous Tank be Converted to Propane? NFPA 58 Liquefied Petroleum Gas Code Except for containers used in cargo tank vehicle service, ASME containers of 3000 gal (11.4 m3) water capacity or less used to store anhydrous ammonia shall not be converted to LP-Gas fuel service. Page 12