Propane and Heating Oil: Federal Oversight of the Propane Education and Research Council and National Oilheat Research Alliance Should Be Strengthened

This testimony discusses highlights of our report on the extent to which the Propane Education and Research Council (PERC) and National Oilheat Research Alliance (NORA) implement consumer education, research and development, and safety and training programs related to the use of propane and heating oil. Tens of millions of Americans rely on propane and heating oil for heat, hot water and--in the case of propane--cooking and motor fuel. Within the last 15 years, Congress authorized the creation of two national entities to undertake propane and oilheat research and development, safety and training, and consumer education programs and provided the U.S. Department of Commerce (Commerce) and the U.S. Department of Energy (DOE) with certain related authority. The Propane Education and Research Act of 1996 (the Propane Act) and the National Oilheat Research Alliance Act of 2000 (the Oilheat Act) authorized the establishment of PERC and NORA, respectively. The Oilheat Act expired on February 6, 2010, and is under consideration for reauthorization, but the Propane Act does not expire. PERC and NORA fall into a category of federally-authorized programs known as check-off programs. To fund check-off programs, a fraction of the wholesale cost of a product is set aside by the producer and deposited into a common fund to be used to benefit producers and consumers. Similar programs are in place for agriculture commodities, including, for example, milk, as well as beef, pork, and cotton, among other commodities. To fund PERC operations, each gallon of odorized propane gas sold is assessed $0.005.5 To fund NORA operations, each gallon of heating oil sold is assessed $0.002.