Winter Propane Shortage — Engineered Industry Gamble Which Cost Lives

Sara Dogskin talks about her daughter Debbie Dogskin, who froze to death with an empty propane tank

Debbie Dogskin is dead. She was found in her Fort Yates, North Dakota, mobile home frozen to death with an empty propane tank. [1] [2] What was the cause of the propane shortage which caused prices to rise and supplies to dwindle in the northern midwest and the northeast this winter?

Short answer: It was an engineered gamble by industry seeking to maximize profits.

There were really four factors which contributed to the shortage this winter.

2: Abnormally wet corn harvest required extra propane to dry
3: Abnormally cold winter increased demand
4: Lack of local storage in the places with the greatest demand.

But what was the number 1 reason?

The Enterprise TEPPCO line (which ships refined liquids, NGLs, mostly or all propane in winter) was a looped line from Texas to New York. There were two parallel segments which delivered products from storage fields in Texas to the North Central and NE markets during the winter demand months.

One of those segments became the ATEX line, which was reversed to transport NGLs from the wet-gas rich Marcellus/Utica formations from SW-PA/E. Ohio/WV down to Texas for refining and marketing.

So that industry folks could make money. Lots of it.

FERC order approving the the TEPPCO/ATEX reversal 5-31-13

• http://www.ferc.gov/EventCalendar/Files/20130531173940-IS13-265-000.pdf

So when that happened, Enterprise-TEPPCO lost approximately 1/2 the propane supply capacity to the midwest and northeast.

Oh, and there’s another reason. According to the Energy Information Agency, propane exports have risen sharply in the last few years. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MPREXUS2&f=M

A large consumer of these exports is Canada, which is importing valuable NGLs (inc. propane) from the US to support Tar Sands Development. Those NGLs (aka “condensate”) are used to dilute the rock-hard bitumen, which cannot otherwise be transported in a pipeline.

(There is really no such thing as “tar sands oil”. Bitumen in its raw form more resembles a lump of coal. Like shale-gas hydrofracking, Tar Sands development is just another form of extreme energy. It’s bottom-of-the-barrel stuff, the dregs of hydrocarbons, with high energy inputs and high environmental costs.)

Here’s the other thing: This whole story is directly connected to the Inergy (now Crestwood) facility being proposed to store LPG and NGLs under Seneca Lake in the Finger Lakes region of NY. It’s highly unpopular among the locals, and dozens of people have committed civil disobedience there to try to stop the project.

Here’s a couple of videos, first, of a spokesmen for Inergy/Crestwood, and second, of the National Propane Gas Association, where they admit the reason for Seneca Lake Facility, AND the propane shortage this winter was due to Enterprise TEPPCO/ATEX pipeline reversal and Alberta Tar Sands development.

That is to say, it was engineered to maximize industry profits,
and NOT to best serve American consumers.

But knowing this doesn’t help bring Debbie Dogskin back from the dead.

Here’s a short video of Kevin Bernstein, spokesman of Crestwood Midstream (formerly Inergy LLC), the company proposing a massive LPG and NGL storage facility under Seneca Lake in Reading NY, near Watkins Glen:

http://www.youtube.com/watch?v=ImxzMdnkYAU#t=2m11s

Check out 2m:11s to 2m:36s

Hearing page:

• http://democrats.energycommerce.house.gov/index.php?q=hearing/hearing-on-benefits-of-and-challenges-to-energy-access-in-the-21st-century-fuel-supply-and-i

PDF of Roldan testimony:

• http://democrats.energycommerce.house.gov/sites/default/files/documents/Testimony-Roldan-EP-Energy-Access-Fuel-Supply-and-Infrastructure-2014-3-6.pdf
• Excerpt:“The Appalachian-Texas Pipeline (ATEX) is a new provider of ethane service from the Marcellus region to the Gulf Coast. The pipeline itself is not new, however; rather it is one of two parallel pipelines that run from Mt. Belvieu, Texas to Todhunter, Ohio. What is new is that the ATEX pipeline used to deliver product batches northward as part of the Enterprise TEPPCO system. The decision to reverse this pipeline to take ethane southward reflects the economics associated with taking the huge increases in shale production of natural gas liquids to market. Unfortunately, this reversal has caused all northbound product flowing on the Enterprise TEPPCO pipeline to be squeezed onto the remaining northbound pipeline. The elimination of this northbound capacity, along with the introduction of priority diluent service on the remaining northbound line to assist in the processing of Canadian heavy crude oil [Tar Sands “Oil” => Dilutant for Diluted Bitumen!], has caused congestion and delays for shipments of propane to the Midwest and northeast.“
  — The National Propane Gas Assoc., president/spokesman Richard Roldan

• http://www.youtube.com/watch?v=CthsQnUKW1k#t=19m45s

(watch the entire video and read the PDFs if you can- very interesting stuff in here, folks!)

More Reading:

• Wells Fargo Securities 11th Annual Pipeline, MLP and Energy Symposium
  December 2012. Presentation by MarkWest Energy Partners. Lots of info about Marcellus NGL production and pipelines:http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTYzOTM3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

Here are a couple other excellent blogs which helps connect the dots:

• http://vtdigger.org/2014/03/14/mike-ryan-update-propane-export-situation/
• http://insideclimatenews.org/news/20140310/us-propane-shortage-provides-lessons-debate-over-oil-and-gas-export