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Published February 17, 2014, 10:27 AM

Propane still short as agencies act

Chaz Keffeler, 21, works with his father, Todd Keffeler, providing propane for Enning (S.D.) Propane customers throughout Meade County — the third-largest county in the U.S., stretching nearly 200 miles from Faith, S.D., to Sturgis and Piedmont, north of Rapid City.

By: Mikkel Pates, Agweek

ENNING, S.D. — Chaz Keffeler, 21, works with his father, Todd Keffeler, providing propane for Enning (S.D.) Propane customers throughout Meade County — the third-largest county in the U.S., stretching nearly 200 miles from Faith, S.D., to Sturgis and Piedmont, north of Rapid City.

The company usually gets its propane out of depots in western North Dakota and eastern Montana, but recently got one load from Billings, Mont. Prices this year have ranged from a little more than $2 per gallon up to $5, and back down to $3.10.

“Most people can usually go all winter on the propane we sell them for the summer fill,” Todd Keffeler says, adding that supplies have been up and down.

“It wasn’t too bad at the beginning of the year, but lately it’s been getting harder and harder,” Chaz says. “Hopefully at the beginning of March it’ll start getting better.”

The propane shortage has hit throughout North Dakota, Minnesota and Montana.

Mike Rud, executive director of the North Dakota Propane Gas Association, notes that there continue to be delays in propane deliveries to North Dakotans.

On Feb. 10, the Federal Energy Regulatory Commission took “unprecedented action” to direct Enterprise TE Products Pipeline Co. to temporarily provide priority treatment to propane shipments from Texas to the Midwest, prompted by U.S. Sen. Al Franken, D-Minn., and other politicians.

Enterprise currently puts 81,000 barrels per day in reserve for contract buyers. The propane gas trade association wants the majority of that fuel added to the daily capacity for propane shippers.

According to a Forum News Service report, Enterprise Product Partners told shippers it would inject an extra 150,000 barrels of propane into its pipeline on Feb. 10, and 350,000 barrels on Feb. 13. Later, in a filing with the Federal Energy Regulatory Commission, it said it is willing to continue prioritizing shipments until Feb 21.

Meanwhile, Minnesota Gov. Mark Dayton has extended the State Emergency Declaration hours-of-service exemption through March 1, making it easier for suppliers to transport propane.

Joel Brandenberger, president of the National Turkey Federation, thanked Franken and others for “leading this crucial effort” and called it a “lifeline of support to secure propane for barns to keep animals warm and family homes safe in isolated farmland areas.”

Rud says there are only 22,000 propane rail cars nationally, and those are unlikely to be deployed much in the Upper Great Plains.

“Everything is pretty prioritized because of the oil patch,” Rud adds, noting that oil traffic is growing faster than expected.

On the railroads

Amy Casas, director of corporate communications for BNSF, says the railroad has “transported the propane we have been requested to move. When we are given additional (propane) product, we will move it as expeditiously as possible.”

Rud says the bigger issue for propane is the pending reversal and product switch for the Cochin Pipeline, with a terminal in Carrington, N.D. — one of the main companies to bring in propane. Rud says 75 to 85 percent of the propane delivered into the region comes from that pipeline, but it will be switching to other products this summer. Companies such as CHS are investing in alternative terminals.

Meanwhile, several regional Minnesota politicians, including U.S. Reps. Collin Peterson, D-Minn., Kevin Cramer, R-N.D., and Kristi Noem, R-S.D., are asking the House Energy and Commerce Committee to hold hearings to determine why the propane shortage occurred, and the long-term outlook for preventing it again.

Enning Propane has had to ration some of its propane this winter, trying to work with circumstances of individual customers. It has made more deliveries in hopes that prices will moderate for customers. About half its customers have wood and electric backup heat, but some don’t have a backup for their propane, the Keffelers say.

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