Preparing for disaster

Whenever and wherever trouble strikes, people in the propane industry jump into their trucks and rush in to help. For propane marketers at the center of the disaster, however, the financial impact can linger for years.

“This is the first year that I don’t have a loss carried forward from Hurricane Andrew,” says Katrina Jacobsen Lavene, president of Homestead Gas Co. in Homestead, Fla. “It’s taken me this full 13 years to recover; that’s how huge my loss was.”

The killer storm struck in August of 1992; insured losses exceeded $35 billion in today’s dollars.

“Andrew was an equalizer. We were all poor overnight,” she reports.

In Homestead alone, some $180 million in public funds flowed into the community to aid in the rebuilding, yet one-third of the residents decided to settle elsewhere. Among those who returned, the expanse of government-constructed trailer homes are served by electricity, not propane.

“I lost 45 percent of my customer base in one day,” Lavene recalls. “Two thousand of my customers never came back.”

Prior to Andrew’s onslaught, the Homestead Gas service area was 20 miles of mainly rural accounts. For the business to survive, Lavene had to augment the company’s reach.

“I’ve expanded into different market areas. I have a strong 50-to 60-mile radius of customers; I focused more on growing in the Keys.”

If an area can be designated as a “hurricane alley,” Homestead and neighboring Florida City would be it. They have suffered 21 direct hurricane hits – the most of any area since government record-keeping began in 1871. It has been affected more than 50 times by hurricanes or tropical storms.

Meeting resistance

Lavene and others in the propane industry stress that all marketers have to be proactive in preparing to expect the unexpected regarding disasters, whether they be natural or man-made calamities.

Aerial view of flooded downtown Franklin shows oil contamination resulting from propane tanks and cars under water while a hazmat team assesses the situation.

While regulatory requirements have stiffened since 9/11, little planning has been done nationally to formulate evacuation plans to move masses of people within a short timeframe. The situation is especially alarming given the staggering level of official bumbling that came in response to Hurricane Katrina.

“Don’t get too dependent on government,” warns Lavene, who is sharply critical of the way the New Orleans situation was handled. Citizens and business owners alike should be certain that their local officials have solid evacuation plans in place. Does your town have a fleet of school buses, plus keys and drivers, available on short notice? Ditto for boats, snowplows or helicopters. What precautions are in place for human exposure to the cold or heat, which beat down numerous Gulf Coast evacuees?

“If you have a Category 5 coming and the levees are only built for a Category 3, you get the buses in there to get people out,” Lavene declares. “Telling people to evacuate is one thing, but getting them evacuated is another thing.”

For a number of reasons, ranging from loyalty to pets to standing guard against looting or a simple desire to stay at home, many people reject evacuations.

“If they would have tried [forced evacuations] in Homestead they would have met resistance; we’re farmers who hunt. We’re a bunch of farmers and we’re used to taking care of ourselves, not depending on the government,” says Lavene.

Communication breakdown

Jordan Black was in the thick of Hurricane Katrina as associate director for the Louisiana Propane Gas Association. She says the radio and TV public service announcements and locally adaptable newspaper press releases produced and distributed by the National Propane Gas Association may have saved thousands of people were heeded the pre-storm advice.

“It would be good to run PSAs to explain what should happen in case of an emergency,” she says, especially in regions with a higher expectation of threatening events.

For propane retailers on the ground during these scenarios, it’s all about communication, reports Tony Varela, claims manager for Suburban Propane.

“The key to our company is communication,” he says. “We have key people that are available 24 hours a day. We have a crisis management plan. We instruct our field offices to contact us with any incident.”

When a hurricane is bearing down on the Fort Pierce, Fla. AmeriGas branch, staff members batten down the hatches a full two days before the anticipated landfall.

“Nobody works just an eight-hour day during hurricane season,” says manager Darlene Rice. “Every day I watch the Weather Channel 24/7.”

Restaurants, assisted living centers, hospitals and cellular telephone tower generators are checked to make sure they have enough propane for the duration. AmeriGas relies on cell phones with a two-way radio function to help ensure that everyone remains in contact, she notes.

All companies should consider putting alternative communication methods in place – such as a physical meeting spot – given the way Hurricane Katrina rendered landlines, cell phones and even police radios inoperable when poles and towers were swept away.

Staying afloat

“Our Asheville, N.C. facility was wiped out last year by Hurricane Frances,” recalls Varela. “We got on the phone with them. We had generators sent down there as it was unfolding. Most of the vehicles we had moved to higher elevations, and the hurricane damage to vehicles was minimal.”

Another propane emergency planner offers this advice: Park trucks and busses grille-to-grille, as this prevents wind-driven debris from puncturing the radiators.

In stricken areas, tank retrieval is a top priority as soon as roads are reopened. In these situations a spirit of cooperation exists within the industry.

“We find competitors’ tanks and competitors find our tanks,” Varela explains.

Gary Warfield, Southeastern regional technical coordinator for FerrellGas, agrees that preparation for the storm is critical.

“We move trucks to higher ground, get out of Dodge and come back later after the storm to see what’s left,” he noted.

After Hurricane Charlie, it was a week before the company was let into the afflicted area. Crews stay in contact with local emergency operations centers when Florida was hit by four hurricanes in 2004, pumping lots of propane to emergency responders.

“Last year, when everything was out, we had propane – and we were able to serve many, many customers,” Warfield recounts. “Propane was a necessity for the recovery.”

Since last year’s busy hurricane season there’s been a tremendous surge in demand for generators, according to Vicki O’Neil, chief of Florida’s Bureau of Liquefied Petroleum Gas Inspection.

“People are backed up [with orders for the units] and there’s a propane load associated with that,” she says.

For post-hurricane recovery efforts, propane-powered forklifts are a vehicle of choice as massive loads of supplies are brought into the afflicted area.

“We’ve been getting a lot of calls from the industry wanting to help,” O’Neil adds.

Social fabric unravels

In any disaster scene, the normal infrastructural services are usually severely lacking. There is no gasoline, diesel fuel, hotels, restaurants or grocery stores. In 2004, FerrellGas had a runner drive 60 miles just to buy cold cuts for crews on the job.

“Once we got in, picking up the tanks from the destroyed homes was a priority,” says Warfield, noting that it took two months to recover all of the tanks dislodged by Hurricane Charlie. “It’s a lot of manual labor. You dig and pull and hunt.”

Another unimaginable challenge is finding your way amid devastated neighborhoods. “Maps are useless – there are no street signs,” Warfield says.

“Even I was lost, and I was born in Homestead,” Lavene said. “I also know to have money going into a hurricane because the ATMs don’t work.”

With the whole world watching, the social fabric became unraveled in the aftermath of Hurricane Katrina. There is a consensus that this behavior occurs in most widespread disasters and lasts about 48 hours until the National Guard or police reinforcements arrive. It remains unclear whether they actually restore order, or if the lawlessness runs its course before people settle down to cope with the more important issues at hand.

“It was a free-for-all for a couple of days,” after Hurricane Andrew, Lavene recalled.

With Katrina, even doctors coming in to heal the sick and injured were packing heat. Lavene says her Homestead Gas employees remained unarmed, although their volunteers may have come in with weapons.

“When you’re living something like that, you don’t know about the law,” she says.

To this day, Lavene heaps praise on her propane marketer colleagues who rolled in with aid.

“We had people in the industry who gave us food. The outpouring of assistance came as a surprise to us,” she said.

Also, Homestead Gas workers remain heroic in Lavene’s eyes.

“They came in to help when they could have stayed home and saved more of their own things from the mud. There were a lot of personal sacrifices made.”