Preparation eases pressure points this past heating season

April 7, 2020 By    

An extra-wet fall corn crop, a Canadian railroad crew strike and other protests affecting propane shipments, and a sans-basketball form of coronavirus-induced March Madness bookended a comparatively mild winter heating season.

Propane marketers worked to overcome potential pressure points with cooperative composure.

The 2019-20 winter was "relatively quiet," says Steve Kossuth, vice president of global LPG supply at UGI Corp. Photo: DarcyMaulsby/iStock / Getty Images Plus/Getty Images

The 2019-20 winter was “relatively quiet,” says Steve Kossuth, vice president of global LPG supply at UGI Corp. Photo: DarcyMaulsby/iStock / Getty Images Plus/Getty Images

“There were some regional supply challenges that some of our members experienced, and the industry navigated through them,” says Steve Kossuth, chairman of the Propane Supply & Logistics Committee of the National Propane Gas Association (NPGA) and vice president of global LPG supply at UGI Corp., AmeriGas’ parent company.

“We saw rail and truck transport come in from outside the theater” when particular trouble spots became apparent. “It brought our industry together,” he observes, with propane providers rallying to fulfill demand despite tough logistical conditions.

“It showed that we can make better decisions with the data published by the NPGA,” says Kossuth, citing the benefits delivered by the organization’s focus on providing detailed up-to-date information. He rejects any “broad brush” attempts to cast aspersions on the industry’s ability to meet the nation’s propane needs: “It was a relatively quiet winter – and quiet is good.”

Mike Newland, director of agriculture business development at the Propane Education & Research Council (PERC), says industry executives were “working around the clock” as a united front to obtain temporary regulatory relief from government officials amid spiking consumption levels in Illinois, Indiana, Iowa, Minnesota, North Dakota and Wisconsin.

Pipelines were on allocation amid more-distant-than-normal supply points.

And although the prognosis of the coronavirus pandemic is chilling, shelter-in-place orders came just as the propane-critical coldness of winter began to wane. The amount of late-season heating load consumed by hunkered-down families was yet to be determined at press time.

Jay Christie, area sales manager at New Century FS of Des Moines, Iowa, and president of the Iowa Propane Gas Association (IPGA), was in the catbird seat as Hawkeye State farmers were harvesting an ultra-moist corn yield well into the fall due to heavy spring rains that delayed planting.

“Really wet corn, a shortened window and really cold temperatures” combined to ignite a bumper crop of propane demand for the drying process. From Oct. 21 to Nov. 10, New Century moved four times the amount of gas that had been sold in previous years, says Christie.

The situation was stressful, yet “we were able to manage our way through it” and meet customer needs. While there was plenty of available supply, transportation of product lagged behind the pace of agricultural consumption. “Even though we had gas in our bulk plants, we couldn’t just run ourselves empty.”

The pipelines move at 4 to 5 mph, taking six to eight days to flow from Conway, Kansas, to the middle-Iowa region.

Partial fills were employed to ease a looming paucity of propane. Farmers were provided with just enough gallons to complete a day’s worth of drying in an inefficient process requiring frequent delivery runs.

“We told them, ‘We’ll be back at this same time tomorrow,’” Christie reports.

Better planning with PLAN

Iowa marketers have been praising the leadership of IPGA CEO Deb Grooms, who was actively informing the industry and reaching out to government officials and industry allies along with fielding phone calls from farmers, farmers’ wives and farmers’ bankers inquiring about the availability of propane.

“Everything happened at once” to constrict the amount of available gallons; “you can only send so much up the pipeline,” says Grooms.

“The pipelines haven’t been updated in years,” she notes, citing a widespread pattern of difficulties. “It’s not just Iowa – it was the entire northern Midwest.”

Propane wholesalers, drivers, dispatchers and terminal managers maneuvering around shortages were assisted by the NPGA’s PLAN – the Propane Logistics Analysis Network – a centralized phone app that keeps tabs on hours-of-service statuses, supply point waiting-line lengths and other assorted bottlenecks.

The PLAN system relies on active user input to provide the best possible data, according to Lesley Garland, the NPGA’s vice president of state affairs. She anticipates that PLAN will be even more useful next year as it attracts increased industry attention.

Issues north of the border

Striking Canadian National Railway workers presented some initial anxiety early in the winter heating season until the stoppage was resolved after a disruptive two weeks in November.

State associations launched communications to their membership to help ensure propane replenishment procedures remained on track.

The strike wasn’t the only issue north of the border, however.

Protesters blocked railroads in Canada in opposition to a natural gas pipeline project crossing the traditional territory of the Wet’suwet’en First Nation in northwestern British Columbia.

Leslie Anderson, president and CEO of the Propane Gas Association of New England, reports that during protests of railroads in Canada some 100 rail cars were blocked from reaching northern Maine and about 50 propane tankers were prevented from arriving in Vermont and New Hampshire.

The propane industry banded together to secure product elsewhere for customers.

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