LP Gas, April 2014

WINTER OF 2013 14 THE CHALLENGES THE SOLUTIONS million barrels 48 36 24 12 Gulf Coast Midwest East Coast 0 Apr 12 Aug 12 Dec 12 Aug 13 Dec 13 Apr 14 Jan 23 January spot propane prices as well as prices for wet barrels approach 5 per gallon at Conway Jan 19 FMCSA issues regional hours of service waivers for the Eastern and Midwestern service centers The Southern and Western regions will follow creating uniformity in the system Thirty three states and D C affected Jan 22 Texas temporarily waives licensing permitting and certification requirements regarding LP gas trucks and operators so the state can assist in alleviating shortages in other parts of the country Regional Propane Stocks U S Energy Information Administration Jan 27 Residential propane prices in the Midwest rise to an average of 420 per gallon compared to 208 on Dec 2 EIA reports Feb 2 NPGA holds its winter board meeting in Clearwater Beach Fla where industry leaders discuss strategies to alleviate short term supply disruptions It also forms a supply and infrastructure task force message about what was going on regionally and nationally Joe Rose at the Propane Gas Association of New England PGANE was especially instrumental in resolving the various issues impacting the Northeast according to Alexander at Global Gas It became pretty clear in November that we were going to have a problem Rose says The marketers stepped up and bought propane off ships Alexander describes how retailers resorted to short filling customers some because of the supply shortage while others got less than a tank load because they lacked the funds or credit to pay for it Some marketers would give their customers a choice about whether to short fill to save money or pay for a full load she says Some marketers in turn had diminished cash flow and credit shortfalls with their suppliers When the market blows out like it did theres a blowout on the credit Alexander says Matters in the Midwest Scot Imus executive director of the Indiana Propane Gas Association says there were times when members would run out of propane and other marketers would step in and fill tanks People were serving other accounts and returning the favor he says They all suffered the same crisis so they helped each other out the industry worked together Competitors were assisting one another in Iowa as well according to Grooms Transport loads were shared to prevent their colleagues from approaching empty They were also trying to help consumers with the price by short filling which cost the marketers a lot of money she says John Tibbs executive director of the Illinois Propane Gas Association prefers to avoid the term propane shortage the gas just wasnt in the right places he says We had trucks going to Texas Mississippi Missouri and Kansas Tibbs adds Your freight cost is going to be higher Some went ahead and ate some of it but it worked out in the end The marketers communicated with their customers to conserve he says adding that it was touch and go a couple of times but we had enough propane Minnesota was 13 percent colder than normal and 15 percent colder than last year High demand made product tough to come by in the region says Minnesota Propane Association Executive Director Roger Leider Were moving a lot of product in March and we have a long way to go he says A lot of people held back because of the pricing so there will probably be a lot of spring filling going on Customers are saying At 4 propane maybe give me a half fill enough to get by Trickle down effect in West Baron Glassgow who serves as executive director for several western propane associations says some places drew assets from the West Even places that didnt have much of a winter had problems We had railcars that were running three weeks Conway Mont Belvieu Spread Mont Belvieu PADD 3 Conway PADD 2 Cold weather Corn harvest www LPGasmagazine com April 2014 LPGas 19