Subcommittee Examines Energy Fuel Supply and Infrastructure

March 6, 2014

WASHINGTON, DC – The House Energy and Commerce Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today continued its hearing series “Benefits of and Challenges to Energy Access in the 21st Century” with a focus on fuel supply and infrastructure. The hearing explored how rail, pipelines, and trucking are playing a key role in moving America’s growing energy supplies to markets, and also examined how inadequate infrastructure has contributed to recent high energy prices as a result of regional shortages of natural gas and propane.

“There is no question that the energy boom is great news for the U.S. But without an infrastructure boom to match it, the benefits of our energy abundance will not be fully realized,” said Whitfield. “Recent events have shown the energy infrastructure to be under strain. For example, very tight natural gas supplies and high prices in New England during this very cold winter were not caused by any actual shortages but by the limited pipeline capacity serving that region. And the low supplies of propane that hit my district and many rural areas throughout the Midwest were attributable in part to the fact that we now have booming production of crude oil that is competing for space on trains and trucks with other commodities like propane.”

U.S. Energy Information Administration Administrator Adam Sieminski presented energy supply, demand, and price trends and detailed that recent cold temperatures across the Midwest and East Coast have put pressure on fuel consumption and heating costs.  While the U.S. has ample supplies of both propane and natural gas, Sieminski explained that high prices this winter were largely the result of infrastructure and delivery challenges, and warned that problems would continue as America’s energy production increases. “The continuing development of U.S. hydrocarbon resources, resulting in the increasing supply of crude oil, natural gas, and propane and other natural gas liquids has and will continue to present both challenges and opportunities for the use of existing infrastructure and the future development of additional infrastructure,” said Sieminski.

Donald Santa, President and CEO of the Interstate Natural Gas Association of America, praised the benefits of America’s “abundant natural gas supply and robust pipeline infrastructure,” but explained the urgent need for new pipeline capacity to keep pace with increased the production and demand. He said that infrastructure development required the proper market signals and an efficient pipeline permitting process, and praised the House passage of Rep. Mike Pompeo’s (R-KS) legislation, H.R. 1900, the Natural Gas Pipeline Permitting Reform Act. He said, “[I]f you want to take full advantage of new natural gas supplies by constructing the pipeline network that will be needed to keep pace with dynamic shifts in supply and demand, enacting H.R. 1900 is one of the few areas where Congress can make a measurable improvement.”

Charles “Shorty” Whittington, President of Grammer Industries, Inc., testified on behalf of the American Trucking Association and the National Tank Truck Carriers. He gave a firsthand account of the difficulties in hauling propane this winter due to inadequate transportation capacity, stating, “With the increase of natural gas production across the nation, and the corresponding increasing demands for tank truck services, competition for the use of existing tank trailers is at an all-time high, straining existing capacity and new trailer production capabilities at the same time. To put this in perspective, if I ordered a new tank truck today, I would not receive it before May of 2015.” Whittington also urged Congress to work with the Department of Transportation and states to streamline and improve the emergency exemption process for certain driver regulations during propane shortages.

“At this promising juncture in the nation’s energy history, we need an administration that embraces the architecture of abundance. But instead, we often get Keystone-style delays and red tape,” said full committee Chairman Fred Upton (R-MI). “I am convinced that we can create a new energy infrastructure to safely deliver the affordable energy that businesses and families need. We welcome the task of creating this architecture of abundance, and Congress must take action to remove any impediments to further progress.”