Winter 2021-22: The view from one propane supplier

LP Gas asked John Powell, senior vice president of marketing, supply and logistics at Crestwood Equity Partners, about the winter heating season and the war in Ukraine, and what that means for the propane industry.

LP Gas: How would you assess the overall efficiencies of this past heating season – both industrywide and at your company?

Powell

Powell: As an industry, I would say – generally speaking – that everyone was understanding of the supply chain and pricing issues. I observed a lot of coordination and communication between all parties, which led to a successful heating season.

LP Gas: Did pricing and volumes hold as you had anticipated?

Powell: Obviously, the fourth quarter of 2021 was extremely warm, and not as many gallons flowed that quarter. However, the first quarter of this year was extremely cold, and most people enjoyed a good heating season.

LP Gas: Were there any/many bottlenecks that occurred?

Powell: With colder temperatures in the first quarter, we did see a lot of delays on rail shipments and some lower production rates from the field, which tightened up the supply market. That said, the industry did a great job of adjusting supply plans to bring in additional supply, and once that supply reached the market in two to four weeks, everyone in the field was able to quickly catch up.

LP Gas: What do you anticipate happening, if anything, in the U.S. regarding the impact on propane due to the war in Ukraine?

Powell: The largest impact is still the overall low global inventories on all energy commodities. Because of the U.S. export capacity, propane will continue to be exported as a supply alternative for many industries globally, until we see additional supply of all energy-related commodities from the Middle East, the U.S. and other producing nations.