FERC OKs Emergency Propane Delivery

OMAHA (DTN) -- The Federal Energy Regulatory Commission on Tuesday took action to help alleviate propane shortages in Midwestern states, as farmers in areas of the Corn Belt struggle to find enough propane to complete harvest. Lack of propane has forced some operations to shut down harvest.

The commission approved a proposal by Enterprise TE Products Pipeline Company LLC to provide emergency propane supplies to areas of need, according to a news release, while also starting a process to engage pipeline companies and shippers to find additional ways to alleviate supply issues.

According to a document from FERC, Enterprise TE Products Pipeline Company LLC offered to provide emergency transportation of propane from Mont Belvieu, Texas, to Monee, Illinois. The company will be allowed to make emergency deliveries until Dec. 13.

"Enterprise TE states that record demand for propane is due to an unusual coincident increase in heating demand, resulting from unseasonably cold weather in the region, and crop-drying demand," according to FERC.

"Enterprise states that the adjustment to accommodate propane service is likely to create operational and scheduling issues and therefore cannot be sustained for a prolonged period of time."

Farmers in some regions of the Midwest have had to stop harvest operations as propane suppliers were unable to meet demands for grain drying.

Farmers across the Corn Belt are running into supply bottlenecks at a time when they can ill afford to wait. The Federal Motor Carrier Safety Administration declared a regional emergency in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin.

In recent weeks, governors in Iowa, Minnesota, Missouri and Wisconsin issued emergency declarations to lift restrictions on carriers for the transportation of heating fuel, including propane. This is expected to help alleviate supply issues in the region.

"The commission takes this issue seriously," FERC Chairman Neil Chatterjee said in a news release.

"We have been actively engaging with stakeholders, and with Capitol Hill and the states, and receiving regular updates from pipeline companies. By bringing the pipelines and shippers to the table, we are building on these efforts and establishing a dialogue focused on exploring concrete solutions."

At the end of last week, Iowa Republican Sens. Charles Grassley and Joni Ernst wrote a letter to Chatterjee asking for the commission to take actions to secure supplies in the Midwest.

"We understand that the nationwide supply of propane is adequate but it is not in Iowa," the letter said.

"Our offices have received numerous calls and reports of farmers forced to leave high-moisture corn in the field covered with snow, and livestock and poultry producers are concerned about supply with the winter months ahead."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter at @toddneeleyDTN

(SK/AG)

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