ALEXANDRIA, Va. -- NATSO and other associations representing petroleum marketers and retailers filed a protest with the Federal Energy Regulatory Commission (FERC) over Enterprise TEPPCO's recent decision to halt interstate ultra-low-sulfur-diesel (ULSD) on its pipeline effective July 1, 2013.
NATSO, along with the Petroleum Marketers Association of America (PMAA), the Arkansas Oil Marketers Association, Louisiana Oil Marketers and Convenience Store Association and Missouri Petroleum Marketers & Convenience Store Association joined several companies to file the protest on Monday, April 22, including CHS Inc.; HWRT Oil Co. LLC; Growmark LLC.; MFA Oil Co.; Southwest Airlines and United Airlines.
The pipeline originates in Baytown, Texas, and runs through Louisiana, Arkansas, Missouri, Indiana, Illinois, Ohio, Pennsylvania and New York. Enterprise first notified customers in March that it would be terminating interstate shipments on its pipeline of ULSD and jet fuel, and on April 5, filed with FERC a tariff change purporting to cease accepting nominations of shipments of ULSD and jet fuel, except for deliveries of jet fuel to two locations on its system.
The associations are concerned that once ULSD shipments end, the area served by the Enterprise TEPPCO pipeline could experience product shortages, especially in markets in Louisiana, Arkansas and Missouri, where alternative ULSD supply sources are unavailable. These shortages could raise diesel prices and compromise consistent availability of the product for consumers reliant on the fuel for transportation, agriculture or other commercial uses.
The groups argued that while Enterprise TEPPCO intends to cancel ULSD and jet fuel interstate shipments on its pipeline, it has not abandoned service and it will continue to provide both interstate and intrastate ULSD and jet fuel transportation to certain shippers and destinations. These actions are arbitrary and discriminatory and will have serious consequences for shippers and consumers.
The associations also expressed concerns about the availability of ULSD in emergencies, especially with the Arcadia, La., terminal being on the TEPPCO pipeline.
This decision by Enterprise has the potential to cause major supply issues throughout the TEPPCO system under normal circumstances, the groups said. But in an emergency, such as the hurricanes of recent years, the petroleum industry's ability to provide ULSD will be seriously compromised, they said. In particular, the terminal in Arcadia, La., has been a crucial source of ULSD in the aftermath of hurricanes. With the termination of ULSD shipments by Enterprise, if emergency responders are forced to rely on rail, barge and trucking to transport ULSD into the area, emergency preparedness will be seriously compromised.
The associations also expressed concern about whether alternative supply sources will be able to absorb the ULSD volume when TEPPCO abandons interstate shipments, in addition to the high costs associated with trucking product long distances, the availability of common carrier tank trucks for additional ULSD shipments, driver hours-of service limitations and other logistics challenges.
NATSO, founded in 1960 as the National Association of Truck Stop Operators, is the trade association of America's travel plaza and truckstop industry. It represents the industry on legislative and regulatory matters; serves as the official source of information on the diverse travel plaza and truckstop industry; provides education to its members; conducts an annual convention and trade show; and supports efforts to generally improve the business climate in which its members operate.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.