Rep. Paul Anderson (12B) – Legislative Update

Dear Neighbor,

A shortage of propane gas is posing problems for farmers who need dryer gas for their wet corn, and also causing concerns for homeowners who heat their homes with LP.

The good news is experts say this situation should not be a factor in this winter’s heating season. The propane supply is saved first for home heating, then for animal and livestock systems that require heating, followed by grain drying. A new monthly allocation will take place Friday and should be adequate into the future.

The propane shortage was sudden, as cooperatives and other retailers had what they thought was an adequate supply as recently as a couple of weeks ago. Harvest times typically are staggered throughout the Midwest, but the late spring and wet planting season delayed the harvest in places like Indiana and Illinois. By the time those farmers got in the field, crops in states like Minnesota were ready for harvest, creating a spike in propane demand and driving a shortage.

Another factor is the reversal of the Cochin pipeline, which has been reduced to 50 percent of its normal propane capacity. This pipeline originates in western Canada and has a terminal in Benson. Because of that Benson location, it has been a primary source of LP  gas in our part of Minnesota for many years. It is being prepared to transport condensate to the Alberta tar sands area, impacting the amount of propane available locally.

Some co-ops are encouraging people to drive as far as Kansas, Nebraska and North Carolina, where there is a greater supply of propane. Whether the trucks are making longer runs south for product or sitting in line at the terminals, it will take more time per load and trucks will not be able to haul as many loads per day. 

Here is some good news and some steps that are being taken to alleviate the temporary supply shortage:

 

  • ·         The harvest is either wrapping up or making good progress in many areas of southern Minnesota. This will relieve some of the pressure on the demand side.
  • ·         On Oct. 23, Gov. Mark Dayton issued an Executive Order http://mn.gov/governor/images/EO-13-11.pdf that suspends the hours-of-service restrictions for propane truck drivers for 14 days.
  • ·         Terminals and retailers dependent upon supply from the Cochin pipeline will receive a new monthly allocation beginning this Friday.

It appears as if this propane crunch could be alleviated soon. Roger Leider, executive director of the Minnesota Propane Gas Association, indicated supply levels will be adequate to meet demand within a week. Again, the new monthly allocation should relieve the propane shortage.

The Cochin pipeline reversal could lead to supply issues in 2014 and beyond, however. There has been talk of a stakeholder group forming to explore ways to prevent supply shortages, which may or may not involve legislation.

I will keep you posted as this issue develops.

Sincerely,

Paul

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