After last winter’s propane crisis, suppliers have taken steps to increase the state’s propane supply and increase the efficiency of transporting propane to users.
Last winter was the coldest on record in nearly 30 years, and with that Minnesota experienced a serious propane shortage that impacted families, businesses and farms across the state. The shortage resulted in propane rates that were almost four times higher than normal, making propane unaffordable for thousands of Minnesotans.
In addition to the weather, a number of factors played a role in creating a propane shortage, from transportation issues to an unusually wet harvest season requiring farmers to use large amounts of propane to run heaters that would dry their crops.
With winter fast approaching, propane suppliers are urging customers to take advantage of summer fill programs to fill their tanks early to quell any fears of a shortage this winter.
By filling tanks earlier, providers anticipate that those who need propane will be able to have it through the winter.
Sen. Amy Klobuchar (D-Minn.) released a report last Tuesday showing the impact of last winter’s propane price spike on families in the Midwest and Minnesota.
Klobuchar, who serves as the Vice Chair of the U.S. Congress Joint Economic Committee, released a report that found Midwest families spent $561 million more last winter on propane on average than the past five winters.
According to the report, 91.7 percent of houses heated with propane in the Midwest are in rural areas, which are not likely to have access to natural gas distribution systems. Nearly half of households using propane for heating earn less than $50,000.
Call to action
Earlier this month, Gov. Mark Dayton convened a second propane summit — the first was in January — aimed at assessing supply and mitigating shortages and price hikes. Safety was one of the things on the governor’s mind during the summit.
The governor was joined by representatives from the propane, agriculture and rail industries, as well as his commissioners of agriculture, commerce, pollution control, and transportation for the discussion.
“During last winter’s propane shortage, this group worked to ensure the safety of all Minnesotans,” Dayton said in a release. “Working together in the months ahead, they will do everything possible to prevent shortages, reduce drastic price increases, and provide all Minnesotans with fuel for the fall harvest and for their winter comfort and safety.”
A wet harvest and cold winter created more need for propane, but the diversion of the Cochin pipeline created distribution issues. Suppliers had to find ways to send propane to users through rail or truck. The Cochin pipeline supplied about 40 percent of Minnesota’s propane but now will carry light condensate to Canada to dilute thick oil from the Canadian oil sands, according to the governor’s office.
Cenex Harvest States has bolstered its propane supply to help get the propane to Minnesota. Rail terminals in Minnesota have increased storage and upgraded loading capability as well, said Dave Wager, Propane Operations Manager of Central Valley Coop in Northfield. A terminal in Benson is being converted from pipeline to rail service, while small private terminals have increased their orders, Wager said.
“Communication is key to preparing for this heating, and any heating season,” Wager said. “Take advantage of programs available to have your storage tank full and any additional gallons needed secured. This will help your marketer and their supplier to plan for the supply needed to get everyone through the heating season.”
The state has added to its propane supply already. More than 20 million more gallons have been delivered in Minnesota this summer compared to last year, or any recent year, Wager said.
According to the U.S. Energy Information Administration, as of Aug. 9, propane supplies in the Midwest were 1.9 million barrels higher than last year, but still 1.6 million barrels below the five-year average.
On the farm
The logistical problems of getting propane to the users last winter affected farmers in the Southern Minnesota area so much that U.S. Sen. Al Franken, D-Minn., held a fact-finding mission at Shepherd’s Way Farms in Nerstrand.
Franken introduced a bill in the senate titled the “Propane Supply and Security Act of 2014” to prevent any future crises. The bill has bipartisan support and is likely to pass once Congress resumes its session.
The bill states that government has authority to make suppliers pump propane in the event of an emergency. While they’ve always had the authority, they can mandate that pipelines pump propane over other products.
Lynette Stott, the Energy Program Coordinator with Three Rivers Action Center in Faribault has urged users to get locked into a price plan and fill their tanks before it gets cold.
“One of the things we’re doing is reminding people to check their tanks and make sure it doesn’t go below 30 percent,” Stott said.