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As cold drives up propane demand, delivery bottleneck emerges

Published January 18, 2013 9:51 pm

Energy • Several western states waive rules that limited trucks' service.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Propane is in big demand in Utah and throughout the West related to the cold weather hovering over the region, but dealers are having a hard time getting the heating fuel to their customers.

Although supplies of the liquefied petroleum gas are abundant, dealers say their trucks often are sitting for hours in long lines at propane supply terminals waiting for loading. And that is causing a problem for the delivery drivers, who under federal regulations, have to count the hours they spend in line against the 14 consecutive hours they can spend each day on the road.

"What we've been seeing is that the drivers are sitting in line often for eight hours or more, burning through their hours of service," said Baron Glassgow, executive director of the Rocky Mountain Propane Association. "It's taking a lot longer to get the propane where it is needed."

In response, Glassgow said that so far this week the governors of Arizona, California and Nevada have issued emergency orders temporarily waiving the federal rules that regulate how long propane delivery drivers can spend behind the wheels of their trucks.

Dealers are hoping to get similar waivers in Colorado and New Mexico within the next several days, he said. "And they've also started reaching out in Utah," he added.

Utah Gov. Gary Herbert's office said Friday evening it is aware of the problem and is gathering information.

Mark Harris of Salt Lake City-based Kiva Energy said the problem seems to be particularly acute in Nevada. Propane is in demand not only as a home heating fuel but also for energy at many mining operations. "They don't produce a lot of propane in Nevada, so much of it has to be brought in from elsewhere."

Propane comes from two sources. It is a component of natural gas and can be separated once the latter is pumped out of the ground. It also is produced as a by-product of crude oil refining.

Kiva Energy gets much of its propane from natural gas plants in Wyoming, Harris said. But lately the low temperatures have led to decreased production at some facilities. As a result, Kiva has turned elsewhere to meet customer demand.

"We're bringing in two to three railcars a day, some of it from as far away as Canada," he said.

West Wendover was feeling the strain of the region's delivery bottlenecks earlier this week when it ran into trouble getting the fuel it needed for its citywide propane system, which serves most of that city's 7,000 residents.

"Everything seemed to come to a head," said City Manager Chris Melville. "It got pretty dicey on Monday and Tuesday. We normally get our propane out of the Salt Lake area but couldn't because there were problems [at] the terminals."

By Wednesday afternoon, after "some finagling," the city was able to get the needed propane from the Reno area.

Propane dealers in Nevada hope that the emergency order signed Wednesday by Gov. Brian Sandoval will help speed up much-needed deliveries in the state. Only 38 of Nevada's 201 cities and towns have natural gas service available, which means the other 80 percent — mostly smaller, rural communities — rely on propane.

The picture is a little different in Utah. Questar Gas provides almost all of the state's cities and towns with natural gas service. "There are only a few areas in Utah where we don't — around Kanab, the Bear Lake area and East Wendover," Questar spokesman Darren Shepherd said.

Angie Hasenohrl, president of the Nevada Propane Dealers Association, said the recently signed order in that state is "not quite the light at the end of the tunnel, but (it) is going to help. We have had such abnormally low temperatures for so long that it is definitely maxing out the system."

The Associated Press contributed to this story.