Propane supply availability in Michigan — ready for change

Guest column

Propane supply to the Upper Peninsula has been a flashpoint in the debate about Line 5, a 67-year-old, Canadian-owned oil pipeline running along the bottom of the Straits of Mackinac. The public deserves to have a realistic, clear understanding of whether the U.P. will have an adequate propane supply, or available alternatives, after the planned shutdown of Line 5 in May 2021.

The pipeline owner argues Line 5 is an irreplaceable source of propane for U.P. homes, but is it? Since the propane industry is unregulated, the best we can do is follow what they say. The propane industry has consistently said, both in the news and during U.P. Energy Task Force meetings, that they have enough supply. On Friday, the U.P. Clean Energy Conference Series at www.upcleanenergy.org will host propane retailers on this question.

The Rapid River facility has provided propane for 25 years. But it is by no means the only location. This map, prepared by Public Sector Consultants, shows the 86 potential sources of propane that can be reached by rail or truck “within close proximity to Michigan” according to the report published by the UPETF in April 2020.

Propane retailer Kristopher Bowman, also a member of the U.P. Energy Task Force, commented on available supplies during the January 2021 task force meeting: “The retailers in the UP have diverse sources and plenty of supply.”

Rail is both a way to transport propane and to store it for up to a month. Derek Dalling, executive director of Michigan Propane Gas Association, noted in a Bridge magazine article that two of his organization’s members are adding rail to their facilities in the Upper Peninsula. This action is a pre-emptive move by the industry to ensure access to supply. In addition, the UPETF Propane Recommendations included conducting an analysis of all of the U.P. rail options for propane. Supported by state funding, Michigan Tech researchers will issue their report this year.

Lesson learned from 2013-14 “polar vortex” — store more product in Michigan

The UPETF Propane Recommendations state, “With more than nine million gallons of customer storage, and 1.5 million gallons of commercial storage in the Upper Peninsula, simply having all residential and commercial tanks filled at the beginning of the heating season would significantly increase the Upper Peninsula’s reserve margins and buffer it against potential disruptions.”

During the August 2019 U.P. Energy Task Force meeting, Dalling acknowledged past problems: “We do not want to have a repeat of (the shortage of propane) during (polar vortex) in the 2013-14 winter.” He reported that propane retailers have worked together to provide product during shortages to meet customer needs:

“Since that time, …we stress, more than ever, to our (Michigan Propane Gas Association) members about keeping adequate supply (and) making sure they stress to their customers about ordering in advance. …prebuying and preplanning is absolutely a necessity and is something that the industry has stressed. The Michigan industry is very proud of the fact we learned our lesson from that vortex and have not had a repeat, not even close. It is very much in our minds that we don’t have that happen again.”

At the next UPETF meeting, a representative from the company that owns the oil and natural gas liquids flowing in Line 5, High Plains Marketing, presented an overview of the propane industry in North America and his company’s role as a wholesaler. His presentation showed the almost doubling in storage capacity in Michigan following the 2013-14 vortex, from 2 million barrels to almost 4 million.

The weekly data from the U.S. Energy Information Administration shows this trend very clearly. The Winter Propane Market Update is published every Wednesday from October to March. Michigan’s supply is well above the five-year average so far in 2021. The UPETF recommendations also cover consumer protection, energy efficiency and financial assistance programs that would support those reliant on propane as the supply system changes.

Multiple actors have stated that they are ready for what comes next, after Line 5. It’s time to gain clarity by acknowledging the facts presented by the industry.

The U.P. Propane Research Team are Upper Peninsula residents who between them have attended every U.P. Energy Task Force meeting. Several of them use propane daily: Gene Champagne, Marge Forslin, Rosemary Grier, Mary Pelton-Cooper, Horst Schmidt and Jeff Towner.

The next sessions in the U.P. Clean Energy Conference series will be 3 p.m. Eastern time Friday via Zoom on “Propane Delivery Recommendations and Financing Clean Energy Transition.”

The two sessions will be —

“Ensuring Propane Delivery,” with moderator Richelle Winkler and presenters Liesl Clark, Dan Harrington and Kris Bowman;

“Funding the Energy Transition for Buildings,” with moderator: Elise Matz and presenters Andrew McNeally, Todd O’Grady and Elise Matz.

The link to sign up for the Zoom conference is at https://www.upcleanenergy.org.


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