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Northey: Prepare for fall propane shortage this fall

By Staff | Aug 12, 2014

DES MOINES (IDALS) – Iowa Secretary of Agriculture Bill Northey told farmers, rural residents and other Iowans on July 24 they should consider taking steps to ensure adequate propane supplies this fall and winter.

“Last fall and winter,” Northey said, “the price of propane jumped sharply to more than $5 per gallon in some locations as a number of events severely tested the capacity of the current propane delivery system and infrastructure.

“Such a dramatic price increase seems unlikely this year, but it is important for propane users to be prepared.”

Actions that farmers and other propane users can take now to assure supply include:

A). Making sure propane supplies for grain drying, livestock facilities, homes and machine sheds are full going into the fall season.

B). Take advantage of early buy/booking programs

C). Consider expanding on-site capacity at facilities and homes.

D). Communicate early and regularly with propane suppliers.

Crop projections continue to suggest a record corn and soybean harvest in Iowa and the nation.

With a large crop in Iowa and neighboring states, Northey said, the demand for propane for grain drying could be significant.

Crop maturity is significantly ahead of last year and slightly ahead of the five year average, he said, which could limit some of the need for propane.

In addition, there are some significant changes within the energy sector, specifically affecting propane, that will continue to impact Iowa supplies. These include:

E). On July 1, Kinder Morgan Partners MLP, reversed the Cochin Pipeline that once delivered Canadian propane to Iowa.

This pipeline provided approximately 13 percent of Iowa’s annual use and 38 percent of Minnesota’s annual use.

F). While the U.S.is now producing record amounts of natural gas liquids, energy companies are exporting record amounts of propane from the Gulf of Mexico region.

G). Increased rail movement of propane is challenging due to limited capacity and already high demand from other sectors.

Northey said he has reached out to a number of Iowa ag organizations and the Iowa Propane Gas Association to encourage them to work with their members and partners to continue to prepare to meet propane demands this fall and winter.

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