Propane Remains a Problem, Emergency Extension Expected
The end of harvest nears, and farmers are closer to closing the book on 2019. This year has challenged the Midwest with soggy weather and abnormal amounts of rain from start to finish.
Corn harvest pulls closer to the finish line with the USDA reporting 76% completion in the latest crop progress report. While November’s lent itself to some better conditions for harvest across the Corn Belt, obstacles with wetness continue to persist.
Since late October, a handful of states in the Corn Belt have declared emergencies for a shortage of propane being used to heat homes, dry crops, and heat agricultural buildings. Along with the individual states, a regional emergency has been declared, as well.
The emergency declaration provides an hours-of-service waiver, extending the number of consecutive hours a driver transporting propane can engage in and relaxing other normal standards.
“It seems like [in early November] has been really heavy with the crop drying, and it is taking a lot more propane to dry than it has in past years,” says chief executive officer of Iowa Propane Gas Association Deb Grooms. “So, they’re using a lot more propane and the pipelines aren’t keeping up with that, so we have the hours-of-service waiver that the governor gave us — and also the regional hours-of-service waiver.
“We have a lot of trucks going down to Conway, Kansas. There’s a big hub down there, and there’s plenty of propane in the United States, it’s just not where we need it right now. They are going down there to get that, so that has helped us tremendously to get more product up to the state.”
The area with the most propane inventory is the Gulf Coast region, consisting of Texas, New Mexico, Arkansas, Louisiana, Mississippi, and Alabama. The U.S. Energy Information Administration (EIA) lists the region possessing 60.6 million barrels in its latest report.
To compare, the Midwest region with Oklahoma, Indiana, Michigan, Ohio, Kentucky, Tennessee, Nebraska, Iowa, Minnesota, the Dakotas, Wisconsin, Illinois, Kansas, and Missouri holds 24.8 million barrels, according to the EIA. Each weekly report since the start of October shows a decline in the Midwest inventory from week to week.
Grooms says the Iowa Propane Gas Association and the USDA pushed homeowners to fill their tanks a little earlier with the late planting this spring and a late harvest on the horizon. Grooms says the cold snap in early November could create an earlier need for tanks being refilled, but late November is projected to see warmer conditions.
“There’s not a shortage of propane in the U.S.,” says Wisconsin Propane Gas Association Executive Director Emma Corning. “This is a logistical and distribution challenge, so some of these small tweaks like with the weather and harvest can all really immensely help keep things flowing and getting the fuel where it needs to go.”
Corning also says an increase in temperature decreases the amount used residentially, which lowers the total demand.
While warmer weather helps some, residential use pales in comparison with crop drying uses.
“After 2013-14, a lot of farmers and propane marketers put a lot more storage in because the Cochin Pipeline [a pipeline through the northern Midwest and Iowa] actually reversed and isn’t using propane anymore on that system,” says Grooms. “A lot of people in that area put in storage, but it is just not keeping up with the demands.
“Just for instance, they now have 16-row combines and 2,000-bushel-an-hour corn dryers. You’re looking at a home [that] might use 3 to 7 gallons of propane a day, but the large corn driers are using 15,000 to 18,000 gallons every day, which would be equal to almost two transport loads, so they’re using a lot of propane.”
For Iowa, the state uses the Mid-American Pipeline and the ONEOK Pipeline, primarily. The ONEOK Pipeline extends to the Chicago area, sending isobutane to the refineries there, and northern Illinois, but it doesn’t reach Wisconsin. Wisconsin uses the Mid-American Pipeline that runs through eastern Iowa, the Flint Hills Pipeline, and rail terminals that start in Canada.
Corning says the propane situation appears to be better in Wisconsin than it has been in Iowa, but Wisconsin still has progress to make on harvest.
The USDA reports that Wisconsin sits at 44% complete for corn harvest in its latest crop progress report. Meanwhile, the top 18 corn-producing states reached 76%. As harvest wraps up in surrounding states, the propane situation will improve, says Corning.
Most of the emergency declarations that grant the hours-of-service waiver expire by December. Both Corning and Grooms anticipate a push for an extension as the late harvest drags into the last month of the year in some places.
“What we’re hoping to do is to get — whether it be the governor or the regional federal motor carrier — to extend the hours-of-service waiver for us into December, maybe until the end of the year to help us to get the product where we need it,” Grooms says.
Corning says another regional extension is possible, but if that falls through, she anticipates a push for an extension at the state level.
“I think because of the high demand we’ve seen this year for ag and residential being a little earlier this year than normal, we want to make sure the farmers have access to the propane they need to make sure their crops are taken care of,” Corning says. “Because it does take time to come through the pipelines and through rail back into the Midwest, we want to make sure that folks are able to catch back up and fulfill those needs.”