Repeat of propane crisis looms if action not taken, NTF says

National Turkey Federation (NTF) board member John Zimmerman told the Senate Energy and Natural Resources Committee on May 1 that significant steps are required to prevent another winter of dangerously low propane supplies caused by worsening complications to pipeline distribution.
Zimmerman, who is also a past president of the Minnesota Turkey Growers Association (MTGA), was among those working with the NTF and the MTGA to restore propane supplies. The Midwest was forced into crisis mode as more than 20 governors declared emergencies when the nation’s transport and storage system failed to meet the challenge of heating rural homes and turkey houses.
“The first thing that shocked most of us about the shortage was how long it took to determine who had the authority to assist and potentially exercise regulatory authority over this seemingly immediate problem,” said Zimmerman in his testimony.
A bitter cold winter in late 2013 and early 2014 stressed already-low inventories of propane used to dry a wet corn harvest. Regional pipeline maintenance then strangled distribution by half, forcing canceled delivery contracts and a supply scramble with price surges on the open market that are still impacting rural America. Propane use for turkey production in Minnesota increased by more than 30 percent as propane prices surged from $1.30 per gallon to $5 per gallon, gouging deep into very thin operating margins. The statewide impact of protecting turkeys from the killing freeze totaled 25 million dollars more than the previous winter.
“It became clear to many of us that if something was not done we could very well run out of propane altogether,” said Zimmerman. “This forced us to ration what propane we had on hand by lowering temperatures in our barns, shops and homes. This caused a loss of production efficiency and concerns over potential animal welfare issues.  This has and continues to directly impact the growers’ bottom line when the turkeys go to market.”
The MTGA propane task force is examining the crisis and will work to secure propane in storage before cold weather returns. However, there is not enough capacity for all the storage needs, since the regional Cochin pipeline that was at fifty percent capacity during winter maintenance will be completely unavailable for propane delivery this year. To fill the need, Zimmerman estimated it would take the impractical shipments of 6,500 additional railcars replacing the approximate 200 million gallons of propane that flows through the Cochin pipeline.
“Government at the very least should establish some type of early warning system, similar to warnings provided by the National Weather Service that allows time to formulate a plan for the impending disaster.  We did not have the luxury of a head start on moving propane from where it was stored to where it was needed because such a system did not exist,” said Zimmerman.  In addition, triggers should prioritize shipments of propane, relax trucking hours of service, and ease permitting for additional storage and the construction of a dedicated pipeline for propane.