The Kentucky Propane Gas Association is working at all levels to seek relief from the current distribution and infrastructure problems facing Kentuckians and their fuel providers.
To allow for expedited delivery of propane, KPGA worked with the Kentucky Energy & Environment Cabinet and sought an exemption from the federal Hours of Service restrictions which limit the transportation of fuel cargoes. On January 8th, the Kentucky Transportation Cabinet authorized relief under an executive emergency order which is in effect until January 28th. The rest of the region is also experiencing delays in propane deliveries. This week, the U.S. DOT issued unprecedented regional orders which will allow transporters to move product more freely through certain sections of the country. Although these regional orders do not affect Kentucky, they impact ten Midwestern states, and fourteen Eastern states. A total of 30 states so far this winter have issued Hours of Service relief.
KPGA is working with its national affiliate to ensure expedited shipments of propane by all modes: pipeline, rail and transport. Efforts are underway with the U.S. Department of Energy to acknowledge that an emergency exists not only in our state, but throughout the nation, as consumers and businesses in dozens of states are faced with higher energy costs due to persistent cold weather.
Other energy suppliers have experienced high usage as well. The U.S. Department of Energy reported that cold weather led to record-high natural gas storage withdrawals last week, the largest in the 20-year history of the survey and the second time this year the record has been broken. In addition, the electricity grid is under strain as well.
To ensure that suppliers are able to provide service in a timely manner, propane customers are asked to arrange for deliveries when their tanks read 35%. Allowing a tank to fall below that level increases the chances of running out. A state safety code requires safety inspections on all tanks that run out of gas during normal service, which can be an extra cost. Give your supplier plenty of time to make a delivery and you can avoid that cost and delay. Also, understand that your propane marketer may limit deliveries to a certain amount (i.e. 200 gallons) instead of completely filling tanks in order to stretch the current supply and service more customers.BACKGROUND
The challenges in delivering propane for consumers during this prolonged period of cold weather started with a confluence of events beginning in October.
Abundant grain crops were being harvested throughout the Upper Midwest almost simultaneously this fall. Ordinarily, the harvest progresses in stages through the region but in late 2013, the harvests happened at the same time over a wide area. This was a large, wet crop which required massive amounts of propane in order to be dried prior to storage. That demand reduced propane inventories throughout the area.
At the same time, infrastructure realignments inhibited the transportation of propane. The Cochin pipeline, which provided 40% of the product used by Minnesota suppliers, was shut down for repairs. This pushed those suppliers further out to load their supply. Canadian imports to the Northeast were also impaired by rail re-routing and other infrastructure impediments. In the Midwest, a new pipeline began moving propane from the central part of the country to new export terminals on the Gulf Coast where propane cargoes started shipping at nearly seven times the previous pace.
As the harvest season demand ended, a massive winter storm rolled across much of the country. Since then, demand for residential, commercial and agricultural heat has soared. The forecast continues for cold weather for much of the state.
The Kentucky Propane Gas Association is in constant communication with governmental agencies in our state to keep everyone apprised of the situation. KPGA will continue to update our members and the general public as to any further developments.
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