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FERC Accepts Pipeline Tariff Changes to Address Midwest Crisis
USAgNet - 12/09/2019

The Federal Energy Regulatory Commission (FERC) accepted two oil pipeline tariff amendments aimed at helping to move propane to the Midwest. Both ONEOK North System (ONEOK) and Enterprise TE Products Pipeline Company (Enterprise TE) said they had received requests from shippers for the changes after the start of the alternative dispute resolution (ADR) process initiated by FERC last month to alleviate propane pipeline constraints in Midwestern states.

In the ONEOK case, FERC approved a revised pipeline transportation capacity allocation policy allowing shippers to transfer allocated capacity to other shippers through the end of this month, and to receive credit to their allocation history for barrels moved by replacement shippers. In the Enterprise TE case, the company is extending emergency transportation service of propane to the Midwest region. The company had received requests from third-party shippers to continue propane service to Monee, Ill., for a period of time beyond the original date on which it intended to terminate the service. The service will continue until canceled or modified by Enterprise TE.

FERC acted quickly on the requests. Chairman Neil Chatterjee announced the ADR process on Nov. 19 and the pertinent parties met on Nov. 25. Both companies filed their requests on Nov. 26 and FERC issued notices Nov. 27, with a shortened comment period that ended Dec. 4.

FERC continues to monitor the Midwest propane situation, and the ADR process is continuing.

U.S. Senators Amy Klobuchar and Tina Smith last month announced their support for actions to prioritize propane shipments to alleviate the ongoing shortage in the Midwest. On Oct. 31, Minnesota Governor Tim Walz issued an executive order declaring a state of emergency, which lifted regulations on hours of service for motor carriers and drivers to alleviate the strain on farmers, livestock producers, and small businesses in western Minnesota during this fall's difficult harvest. Wet conditions this fall have damaged crops, prevented harvesting, and created additional demand for propane to dry crops and heat livestock barns.

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