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Three Words Fuel Dow-Du Pont Feud : Energy: A bill in Congress that promotes propane use has put the two chemical industry firms at odds.

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From Washington Post

There are plenty of David versus Goliath stories in Washington, but this one is Goliath versus Goliath: Dow Chemical Co. and Du Pont Co., giants of the chemical industry, on opposite sides of a bill in Congress.

Dow is trying to get rid of three words in the massive energy bill the Senate is expected to take up this week. The same three words are just fine with Du Pont.

The bill would require most urban fleets of 20 or more cars and light trucks to run on fuels other than gasoline. The permitted alternative fuels would be compressed natural gas, alcohol fuels such as methanol, electricity and “liquefied petroleum gas,” or LPG.

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LPG includes propane. Dow is a major consumer of propane as a feedstock, or raw material, at its petrochemical plants. The firm fears that increased demand would drive up the price. Du Pont, which uses no propane at its chemical plants but is a producer and aggressive marketer of propane through its Conoco Inc. subsidiary, would benefit.

“Of all the fuels in the bill, propane is the only one where you have existing consumers that would be hurt,” said Paul N. Cicio, Dow’s energy lobbyist.

Cicio is the voice of the Propane Consumers Coalition, which includes Dow, Union Carbide Co., several other chemical companies and the National Grange. The Grange is interested because farmers use about 13% of the nation’s propane to dry crops and heat coops. Chemical companies such as Dow use about 28%.

But the people who stand to be hurt most, Cicio contended, are the residents of 7.7 million mostly rural homes that heat with propane. Citing Energy Department projections that the energy bill would eventually result in the consumption of 13.7 billion gallons of propane annually as a motor fuel, he said, “that’s about 95% of today’s total production. . . . Prices are going to rise” with demand.

Cicio’s position is “complete baloney, that’s what it amounts to,” said Robert E. Meyers, president of the LP Gas Clean Fuels Coalition, which is supported by Conoco.

“He just wants to protect a cheap feedstock,” he said. “It has nothing to do with the 7 million homeowners.”

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Meyers said there is no shortage of propane, partly because companies such as Dow build up stocks of it in the summer, when it is cheap, then resell it at a profit and switch to other raw materials when the price goes up in winter.

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