New DHS Chemical Security Rules Hit U.S. Agriculture Hard

WASHINGTON, July 23 /PRNewswire-USNewswire/ -- Responding quickly to the needs of American small businesses, the National Propane Gas Association and 14 other trade associations formed a joint coalition to fight the new U.S. Department of Homeland Security (DHS) chemical security regulations.

The "Friends of Propane in Agriculture" coalition met for the first time in Washington, D.C. on July 16 to discuss the regulation's deep reach into the U.S. agricultural community.

"These rules have a disproportionate impact on agricultural businesses and farmers," said Jim Thrift , VP for the Agricultural Retailers Association. "The agricultural community not only has to comply with the new rules on propane but a number of other common agricultural chemicals used in food production and farming."

Agricultural associations such as the American Feed Industry Association, National Agricultural Aviation Association, National Association of Wheat Growers, National Chicken Council, National Renderers Association, National Turkey Federation, and eight others sent representatives to the coalition's July meeting.

Each association is alerting its members, many of whom are customers of NPGA propane marketer members, about the DHS rules. Farmers, many of whom store propane on their farms for crop drying, poultry brooders, hot water heating, farm vehicle fuel, and many other environmentally friendly agricultural energy uses, would be adversely affected by this rule. Propane, one of the most versatile portable fuels in the world, is used in many specialized agricultural applications such as baby chicken warming or weed control between crop rows.

The rule's implementation will hit the industry and its customers at the start of the 2007-08 winter season, just when more propane is being used by its 50 million customers. Coalition members are concerned about the impact of the DHS proposal on the safety and security of winter heating fuel supplies.

Congressional opponents of the DHS regulation, most notably Sen. Charles Grassley (R-IA), have expressed interest in supporting the propane industry's position. DHS is on a fast-track to complete these regulations, so the coalition is urging its members to become informed about this emerging compliance crisis and contact their U.S. Senators to limit the department's reach.

DHS's proposal is causing the House of Representatives to take a closer look at the regulation. The House is holding a hearing on the DHS proposal on Tuesday, July 24 , in the House Subcommittee on Transportation Security and Infrastructure Protection, one of the five subcommittees of the House Homeland Security Committee.

The propane industry estimates that hundreds of thousands of propane industry and customer facilities would be initially covered by these rules, despite the original DHS estimate that 40-50,000 facilities storing any of the 344 covered substances would be covered. The list of propane facilities covered by the 7,500 lbs. (or 1,750 gallons) threshold is extensive. All 8,000 propane retail storage facilities exceed the agency's proposed threshold. In addition, a conservative estimate of 136,000 propane customers would have to comply with the rules, ranging from grain and feed elevators, individual farms, agricultural supply houses, campgrounds and trailer parks, homeowners, small businesses, construction sites, large retailers, nursing homes, and hospitals. The DHS regulations also indicate that total storage capacity on a piece of property will trigger the threshold, so the user of three 1,000 gallon tanks in separate locations on a farm or orchard would have to comply with the rule.

DHS estimates it will cost between $2,300-$3,500 per location to complete, leading to estimated regulatory costs of over $1 billion for propane alone.

By setting an arbitrary storage threshold for propane, DHS has increased safety risks for agricultural consumers and created incentives to degrade the environment through fuel switching. DHS also has ignored existing federal statutes that exempt propane storage when used as a fuel or held for sale as a fuel. The department has done this in the name of security, but it is simply a costly reporting exercise for American small businesses and farmers.

The National Propane Gas Association is the national trade association of the propane industry. NPGA represents approximately 3,500 companies, including producers, wholesalers, transporters, and retailers of propane gas as well as the manufacturers and distributors of associated propane equipment and appliances. 50 million Americans choose propane as their energy source. For more information about NPGA and the propane gas industry, visit NPGA on the Internet at

SOURCE National Propane Gas Association