NPGA Task Force: Proper Planning Ensures Adequate Supply for Customers

Addressing concerns about winter propane supply among its membership, the National Propane Gas Association (NPGA) April 28, 2017, outlined steps it is taking in cooperation with the Propane Education & Research Council (PERC) to improve reliability. Observed was that more than 10 billion gallons of propane will be exported from the U.S. in 2017, this while domestic transportation resources remain virtually unchanged from the winter of 2013-2014, a heating season when supply and logistics problems were wide-ranging and severe. And although domestic propane production grew by 70% from 2009 through 2015, and retail demand declined slightly, U.S. exports have soared.

“During the last few weeks, we have heard from many of you regarding concerns about propane supply for the upcoming 2017-2018 winter,” NPGA wrote in a letter to its membership. “These concerns are primarily driven by lower-than-normal national storage inventory levels versus the prior year, coupled with an increase in propane exports.” At the national level, NPGA is communicating with the Association of Oil Pipelines and the Association of American Railroads to ensure that during peak usage product is flowing to key supply points around the U.S. The association is also working with the U.S. Department of Transportation (DOT) on a review of regional hours-of-service waivers and briefing new staff on the time-sensitive nature of waivers.

Further, NPGA is paving the way for a waiver of the Jones Act of 1920 if one should be needed, and is advocating reform of the 1970s-era Stafford Act outlining emergency response procedures. Finally, the association is asking officials at the Energy Information Administration (EIA) to expand supply notifications to include exports in its days of supply calculations.

At the state level, NPGA is coordinating communications with state energy officials and policymakers with the goal of educating them about regional supply factors. This effort is designed to build relationships with key decision makers in advance of the winter heating season. In addition, NPGA Propane Supplier Section and Propane Supply & Logistics Committee experts will support state association executives and their members to seek state-level hour-of-service waivers. The association is also urging earlier payouts of Low Income Home Energy Assistance Program (LIHEAP) funds to households. Meanwhile, PERC is updating and expanding its 2015 infrastructure study, which is aimed at revealing changes in how, when, and by what mechanisms, propane is moving through the supply chain. NPGA is also collaborating with PERC on a study to determine the feasibility of propane strategic reserves based on regional dynamics.

“With proper planning, we have adequate supply to meet the demand of our retail customers, but a number of factors must also be considered,” NPGA emphasized. “For example, transportation, supply logistics, degree-day deviations, crop drying demand, exports, and other variables now affect the supply available for our markets.”

NPGA added that “it is incumbent for each marketer to work diligently to establish supply plans that can address seasons of peak demand,” and urged that all its members download a Supply and Infrastructure Task Force white paper, which is available at npga.org/NPGASupplyRecommendations. The paper contains information to help marketers in the steps they should take to avoid a repeat of the winter of 2013-2014. The document contains both policy initiatives and marketer actions that have a positive impact on providing a reliable energy source—propane— to U.S. consumers. The letter sent to NPGA members was signed by Stuart Weidie, NPGA chairman; Tom VanBuren, PERC chairman; Rick Roldan, NPGA president and CEO; and Roy Willis, PERC president and CEO.