Propane still difficult to secure
By Sarah Smith
Railroads will be the key to winter heat as propane becomes a dicier commodity to secure.
Minnesota Gov. Mark Dayton recommended pre-paying for propane supplies to eliminate the uncertainty of rising prices later this winter.
But that’s not an option for some people in Park Rapids.
“I can’t afford to take the chance,” said Steve Olafson, who owns the Skelgas service in Park Rapids and ended his “pre-buy” program this year.
Last year he found his business trying to fill pre-paid orders for $1.54 per gallon at $5 per gallon.
“Some are doing it but they’re a lot bigger than I am,” Olafson said of his business. “This winter will be the test.”
Pipelines are no longer reliable sources of transportation since the Canadian line closed.
Olafson said there is a supplier in Superior, Wis., and a facility in Mentor will be “90 percent functional” but both depend on rail car transportation.
Minnesota Power is idling four of its coal-fired electrical generating units for the next several months because of trouble getting enough coal by railroad.
“This is the worst I’ve seen it in my 18 years with the utility,” Al Rudeck, Minnesota Power’s vice president of strategy and planning, told the Duluth News Tribune on Wednesday, referring to Burlington Northern Santa Fe Railway’s ability to transport coal from mines in Montana and Wyoming to the Northland. “BNSF just hasn’t delivered. We’re very, very frustrated.”
“It’s taking BNSF two to three times longer than usual to get shipments of coal to the Northland, Rudeck said. The utility’s coal stockpiles are less than half of where they should be.”
BNSF has said it is working to expand its shipping capacity.
“BNSF has been working with our freight customers on an individual basis to address their most critical service issues while we continue to execute our short and long-term efforts to improve service across our network,” BNSF spokeswoman Amy McBeth said Wednesday.
Olafson said the pressure on railroads to make room for propane will be put to the test this winter.
U.S. Senator Amy Klobuchar said rail service delays across Minnesota are hurting farmers and the nation’s economy. At a Senate Commerce Committee Hearing on improving America’s rail system, Klobuchar said Minnesota’s agricultural producers need reliable rail service to get their agricultural exports to trading partners, and called on railroad companies to address the ongoing delays. Rail delays cost corn, wheat and soybean farmers nearly $100 million in lower prices this spring, according to a recent study by the University of Minnesota, according to Klobuchar.
Dayton announced Wednesday his office is keeping an eye on the situation.
“Last year, the coldest winter in 50 years caused a severe propane shortage that sent prices to almost four times their normal levels, putting a strain on more than 200,000 Minnesota households and businesses that rely on propane,” the governor’s office indicated.
He convened a meeting of propane suppliers, transportation leaders, legislators, agriculture stakeholders, and key members of his Cabinet to assess the current supply of propane, and discuss any factors that could impact demand for heating fuel this winter.
“During last winter’s propane shortage, this group worked to ensure the safety of all Minnesotans,” Dayton said. “Working together in the months ahead, they will do everything possible to prevent shortages, reduce drastic price increases, and provide all Minnesotans with fuel for the fall harvest and for their winter comfort and safety.”
Minnesota’s Department of Commerce has already weighed in, advising customers to buy early, budget and know your rights.
Rudeck said Minnesota Power’s coal-fired units are scheduled to be idled for about three months. The company decided to idle the four units now to save its limited stockpiles of coal for the winter months, when the region’s electricity demand and coal prices increase.
Olafson isn’t holding his breath but is hoping for something like a planetary alignment and luck.
“If everything works out, we should be OK,” he said.
This report was supplemented with material from Forum News Service.