Airlines for America and the National Propane Gas Association Seek Regulation to Ensure Equal Pricing and Transportation Access for Pipeline Shippers

Associations call on FERC to extend affiliate Standards of Conduct to
the oil pipeline industry

WASHINGTON–(BUSINESS WIRE)–Airlines
for America (A4A), the industry trade organization for the leading
U.S. airlines, and the National
Propane Gas Association (NPGA), the national trade association for
the propane industry, today filed a Petition for Rulemaking at the
Federal Energy Regulatory Commission (FERC) requesting that the agency
extend its affiliate Standards of Conduct regulations to the
multiproduct pipeline industry.

Over the last several years, the development of new technologies has
increased the production of crude oil and associated petroleum products,
with estimated production of crude oil rising to a record-setting 10.3
million barrels per day in 2018, according to the Energy Information
Administration. Additionally, there has been a dramatic increase in
domestic natural gas liquids production due in large part to advances in
shale oil and gas development. Accompanying this boom in production, the
multiproduct pipeline industry has gone through unprecedented
restructuring, spinning off midstream transportation and storage assets
and engaging in the marketing of these products through companies
affiliated with the pipelines.

Public information indicates that crude oil, natural gas liquid, and
petroleum pipelines appear to have been engaged in offering
preferential, discriminatory rates to their marketing affiliates not
offered to non-affiliated shippers, and shared non-public transmission
information with affiliated marketing entities. Such abuses violate the
Interstate Commerce Act (ICA), the law intended to ensure that common
carriers, including crude oil, natural gas liquid, and petroleum product
pipelines, treat all shippers equally in terms of transportation access
and price.

Applying FERC’s Standards of Conduct, currently applicable to the
electric power and natural gas industries, to crude oil, natural gas
liquid, and petroleum product pipelines is a common sense solution to
limit these abuses that harm non-affiliated shippers and distort the
market for pipeline transportation of refined products used daily by
consumers and members of A4A and NPGA.

“With billions of gallons of jet fuel shipped and consumed annually, the
U.S. airline industry has a vested interest in ensuring that interstate
pipelines provide reliable, cost-effective jet fuel transportation
enabling affordable, on-time airline operations for passengers and
cargo,” said David Berg, senior vice president and general counsel for
Airlines for America. “FERC must take appropriate action to promote
pricing transparency, market efficiency and competition among pipelines
and prevent unlawful coordination between pipelines and marketing
affiliates to ensure equal access to pipelines and fair,
non-discriminatory pricing.”

“Propane marketers and consumers rely upon liquids pipelines as an
essential part of a supply chain that heats homes, businesses, and
farms. A fair, efficient, and transparent market requires that there be
no improper exchanges of information between pipelines and their
affiliates that are market participants,” said Jeffrey Petrash, vice
president and general counsel for the National Propane Gas Association.

“Propane marketers and the customers they serve will have increased
confidence that markets are operating freely and efficiently if our
proposals are adopted by the Commission.”

More information can be found in the Airlines for America and the
National Propane Gas Association’s Petition for Rulemaking. The FERC
will now review the Petition for Rulemaking and decide whether to
initiate procedures for a rulemaking whereby interested parties can
comment on the proposed regulation.

ABOUT A4A

Annually, commercial aviation helps drive $1.5 trillion in U.S. economic
activity and more than 10 million U.S. jobs. Airlines for America (A4A)
vigorously advocates on behalf of the American airline industry as a
model of safety, customer service and environmental responsibility and
as the indispensable network that drives our nation's economy and global
competitiveness.

America needs a cohesive National Airline Policy that will support the
integral role the nation's airlines play in connecting people and goods
globally, spur the nation's economic growth and create more high-paying
jobs. A4A works collaboratively with the airlines, labor groups,
Congress and the Administration to improve air travel for everyone.

For more information about the airline industry, visit our website airlines.org and
our blog, A Better Flight Plan, at airlines.org/blog.

Follow us on Twitter: @airlinesdotorg.

Like us on Facebook: facebook.com/AirlinesforAmerica.

Join us on Instagram: instagram.com/AirlinesforAmerica.

ABOUT NPGA

The National Propane Gas Association is the national trade association
of the propane industry. NPGA represents approximately 2,800 companies,
including producers, wholesalers, transporters, and retailers of propane
gas as well as the manufacturers and distributors of associated propane
equipment and appliances. 50 million Americans choose propane as their
energy source. Propane is a clean-burning, efficient and
climate-friendly alternative fuel that is available now. For more
information about NPGA and the propane gas industry, visit NPGA online
at www.npga.org.

Contacts

Airlines for America (A4A)
Vaughn Jennings, 202-626-4209
Vice
President, Communications
[email protected]
or
National
Propane Gas Association
Jeff Petrash, 202-355-1327
Vice
President and General Counsel
[email protected]