On Friday, December 12, New Jersey Governor Phil Murphy announced that the state is entering a state of emergency to address a potential propane shortage following a service interruption at a large factory in Pennsylvania.
The region has been experiencing below-freezing temperatures recently. The Governor’s office stated in a press release that approximately 186,000 residents in New Jersey rely on propane for heating during the winter.
According to the statement, New Jersey has waived the service time regulations for the transportation of heating fuel trucks.
A portion of New Jersey’s propane supply comes from Pennsylvania. In November, a power outage occurred at the Marcus Hook Terminal of Energy Transfer in Pennsylvania, preventing the extraction of propane from its storage tanks.
According to a statement from the National Propane Gas Association (NPGA) in the United States, the outage was caused by an electrical incident involving a transformer on November 19, which paralyzed the propane truck loading platform at the terminal for three days. The energy transfer company declared a force majeure as a result.
The association stated that the terminal is now distributing propane directly from the pipeline to trucks for delivery to homes and businesses, but due to longer wait times, it can only distribute 70% of the allocated amount.
Data from the Energy Information Administration (EIA) shows that approximately 2.7% of households in New Jersey and 5.2% in Pennsylvania use propane for heating. Since the incident on November 19, propane prices for residents in both states have remained relatively stable, with wholesale prices rising by 30 cents per gallon in New Jersey and 11 cents per gallon in Pennsylvania.
The Pennsylvania Department of Transportation also announced that as of this week, hours of service restrictions for bulk propane transportation will be waived.
In light of the impact of this incident on the Mid-Atlantic and New England regions and the uncertainty of the repair timeline, NPGA is in discussions with the Federal Motor Carrier Safety Administration (FMCSA) regarding regional exemptions. Hours of service exemptions for truck drivers are a common measure to address local fuel supply issues.
Shelby Bell, Executive Director of the Pennsylvania Propane Gas Association, stated that the exemptions in Pennsylvania and New Jersey are due to the malfunction at the Marcus Hook Terminal, not a propane shortage.
Bell mentioned, “The energy transfer company is waiting for equipment/parts, and their operations team is working hard to reduce (propane distribution) restrictions after December.”
Bell added that the specific recovery date is currently unclear.