(Bloomberg) — New Jersey Governor Phil Murphy declared a state of emergency effective Friday over a potential propane shortage for home and commercial heating after a service disruption at a major plant in Pennsylvania.
Some 186,000 New Jersey residents rely on propane for heating, the governor’s office said in a statement, and the emergency order comes as temperatures continue to fall well below freezing in the region.
Crucially, it waives hours-of-service regulations for trucking heating fuels.
The potential shortage comes as Energy Transfer’s Marcus Hook Terminal in Pennsylvania is unable to pump propane from its storage caverns after a November electrical fault.
The issue, stemming from a Nov. 19 electrical incident in a transformer, disabled the facilities propane truck loading rack for three days and led Energy Transfer to declare force majeure, according to a statement from the National Propane Gas Association.
Energy Transfer did not respond to requests for comment.
Customers have been placed on allocation and are receiving 70% of their loads, the association said. The terminal is loading propane onto trucks directly from its pipeline causing wait times to increase.
Trucks are also picking up propane from alternate distribution hubs, like Phillips 66’s Bayway refinery in Linden, New Jersey, according to New Jersey Propane Gas Association spokesman Eric DeGesero.
“It’s important for New Jersey consumers to know there is no shortage of propane fuel,” DeGesero said in an emailed statement. “Governor Murphy’s targeted action is providing the necessary flexibility to help address this supply chain disruption,” he said.
About 2.7% of New Jersey households and 5.2% of Pennsylvania households use propane for home heating according to the US Energy Information Administration. Residential propane prices in both states are largely unchanged since the Nov. 19 incident but wholesale prices are up 30 cents a gallon in New Jersey and 11 cents a gallon in Pennsylvania, according to EIA data.
The Pennsylvania Department of Transportation also waived hours-of-service regulations for bulk propane transport effective this week.
The National Propane Gas Association says it is in talks with the Federal Motor Carrier Safety Administration for a regional waiver “given the impact on the Mid-Atlantic and New England and the uncertain timing of repair,” a statement said. Hours-of-service waivers for truckers are a common response to local fuel supply issues.
The waivers in Pennsylvania and New Jersey are due to the Marcus Hook disruption and not a shortage of propane, said Pennsylvania Propane Gas Association Executive Director Shelby Bell.
“Energy Transfer is waiting on equipment/parts, and their operations teams is working hard to try and minimize limitations beyond December,” Bell said.
A firm date on resumption is not yet clear, Bell added.
–With assistance from Christopher Charleston.
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