Propane ‘shortage’ is really a demand, transportation problem

Posted at 11:15 a.m. on November 25, 2019 The Brillion News MADISON – Over the past several weeks, propane marketers across the Midwest have been experiencing extraordinary demand from agricultural and residential customers resulting in a logistical strain on the industry. A wet spring made planting difficult, resulting in a late harvest, as corn stayed in the field longer to mature. In a normal year, there is a more gradual harvest moving from south to north, but according to reports, multiple states are harvesting at the same time and more drying is needed for the crop, thus requiring more propane. The Midwest has also been experiencing temperatures well below normal, which increased propane usage needed for heating homes. Combined with record breaking demand, more than 3,200 Teamsters employees of Canadian National Railway went on strike as of Midnight on November 19, causing disruptions in propane deliveries to the United States. The Wisconsin Propane Gas Association, Cooperative Network and the National Propane Gas Association are working with state and federal transportation officials, as well as the Canadian Propane Association, to ensure all options are considered regarding hours of service waivers and other emergency declarations to expedite the transportation and delivery of propane to homes, farms, and businesses. On November 19, the Federal Energy Regulatory Commission (FERC) announced it will initiate an alternative dispute resolution process with pipeline companies, shippers, and their representatives to explore actions that can be taken to alleviate propane pipeline constraints in the Midwest. In addition, FERC has also approved a pipeline proposal to provide emergency transportation of propane to the Midwest for a 30-day period. On Monday, November 25, the Federal Motor Carrier Safety Administration (FMCSA) Midwestern, Western, and Southern Service Centers extended the Regional Emergency Declaration until January 10, 2020. The emergency declaration waives hours-of-service requirements for those providing assistance to the affected states, including the delivery of propane and other fuels. The states included in the FMCSA Regional Declaration are Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin. With the colder than normal temperatures, little field drying will occur during November and December. Letting corn stand in the field may result in higher losses than if it is harvested and dried. According to the University of Wisconsin-Extension, a two-year study of field losses found corn left standing after October reported 3-5 percent loss in November, 22 percent loss in December and if the corn is allowed to stand in the field all winter, a loss of up to 40 percent. UW Extension has released information on options for high-moisture corn drying and storage. The press release and additional resources can be accessed at https://fyi.extension.wisc.edu/energy/grain-drying-and-storage/ It is important to note that there is not a propane shortage in the Midwestern United States. There are limits on the safe transportation of propane from supply points, as well as limits on pipeline capacity. The propane industry’s goal is to safely satisfy the needs of all its customers. During peak demand periods, it is extremely important for consumers to communicate with propane suppliers in advance to ensure you have what you need, when you need it, especially if you do not have a contract with a supplier or have not scheduled regular visits. ~ Sources: Wisconsin Propane Gas Association & Cooperative Network