State Chamber Asks FERC To Stall Fuel Pipeline Closure

Nearly two weeks ago, we reported on a planned fuel pipeline that threatened the availability of jet fuel and diesel fuel supplies in central Arkansas.

A proposed plan by Houston-based Enterprise Products Partners to cease providing jet fuel by pipeline to Little Rock and Jonesboro has business and political leaders looking for supply alternatives and methods to halt the July 1 cutoff date.

Enterprise has filed a request with the Federal Energy Regulatory Commission (FERC) to end the distribution of ultra-low sulfur diesel used by the trucking industry and commercial jet fuel. Company officials say decline in product demand and the high cost to maintain the pipeline have made it necessary to close the “Enterprise TE Products” pipeline.

On Thursday (May 16), the Arkansas State Chamber of Commerce and Associated Industries of Arkansas filed a protest with FERC asking for a delay or outright rejection of the Enterprise plan.

“I respectfully urge you to reject outright, or suspend the matter for the full seven (7) months permitted by Section 15(7) of the Interstate Commerce Act for technical conference and hearings as the content of the filing will create irreparable harm to the commercial and industrial entities located in Arkansas,” wrote state chamber CEO Randy Zook.

Describing the pipeline’s closure as having a “catastrophic impact to Arkansas, especially central Arkansas,” Zook said the pipeline’s fuel is critical to the Little Rock Air Force Base, the Bill & Hillary Clinton National Airport, and diesel fuel users in the state.

Zook said if the pipeline is allowed to close or be used for other purposes, as Enterprise has suggested, it would only leave Delek US Holdings of El Dorado to service the region in central Arkansas. Zook said Delek does not have the ability to meet that demand and it is scheduled for a maintenance closure in January for a month-and-a-half.

“At this time, it is unclear whether Delek will be able to store sufficient quantities of fuel supplies to satisfy its customers’ demands during this scheduled shutdown,” Zook wrote. “At this time, no plan exists as a result of unforeseen complications.”

Aviation industry officials have expressed concerns about the potential shortage of fuel that the pipeline’s closure would present. While trucking industry leaders suggested that fueling for fleets could adjust to locations out of central Arkansas, other internal documents from trucking firms and fuel distributors convey angst.

An internal memo obtained by Talk Business Arkansas noted that concerns being raised by interested parties include:

• Suppliers and shippers exiting the Arkansas market
• Emergency preparedness being at risk
• Problems for wholesalers to supply the market
• Environmental and safety concerns due to increased truck traffic with HAZMAT cargo needed to supply the area