March 12, 2010

Emergency act waives rules for delivery of heating fuel

MATT WICKENHEISER

— By

Gov. John Baldacci
click image to enlarge

Gov. John Baldacci

AP

John Baldacci
click image to enlarge

John Baldacci

AP

Staff Writer

AUGUSTA — Bottlenecks in the East Coast's propane delivery network have tightened supplies of the fuel that can be used for heating, even as the region dives further into subzero temperatures.

Gov. John Baldacci responded Friday by declaring a seven-day state of emergency to facilitate deliveries of heating fuel across the state. His emergency proclamation will allow the federal Department of Transportation to grant a waiver to delivery personnel to stay on the road longer to supply homes and businesses.

Similar steps have been taken in New York, New Hampshire, Connecticut, Rhode Island and Massachusetts, and Pennsylvania and New Jersey are considering action.

''These harsh winter temperatures that have gripped the state present dangerous conditions threatening people and property,'' Baldacci said in a statement. ''This is a necessary step to ensure that during the prolonged deep freeze, people and businesses get timely heating fuel deliveries.''

In the case of heating oil, the concern is that temperatures will lead homeowners' furnaces to run almost nonstop, thereby draining tanks, the governor's office said. This measure will allow oil dealers to keep drivers on the road to handle extra demand.

The vast majority of homes in Maine -- roughly 80 percent -- are heated with oil.

Allowing propane drivers to stay on the road will help mitigate some systemic problems that have come up, said Jamie Py, executive director of the Maine Oil Dealers Association.

''It's a precautionary measure at this point,'' said Py.

Between 5 percent and 7 percent of Maine homes heat with propane, Py said, but some businesses, schools, hospitals and construction sites use it too.

Propane gets to Maine three main ways, Py said. Rail cars deliver it to Auburn. Ocean transports deliver it to Newington, N.H., and dealers get it from there. And a major pipeline from the Houston, Texas, area ends in Selkirk, N.Y., and dealers can fill up tractor-trailers there.

Both the Selkirk and Newington sites plan to shut down this weekend, Py said, which will cause Maine dealers to potentially drive to other spots to fill up -- such as Rhode Island or Revere, Mass.

The main problem is Selkirk, said John Peters, president of Downeast Energy. Though Downeast doesn't rely on the Selkirk terminal for propane, problems there have affected the system.

''Once a place like Selkirk backs up, it puts pressure on all the terminals. That's what we're seeing,'' said Peters. ''The whole thing has a domino effect.''

For example, while the two terminals will be down for the weekend, the Auburn terminal is restricting how much dealers can take, Peters said.

Both Peters and Py said the measures were precautionary and consumers shouldn't see an impact.

''There's nothing to be worked up about. We've got to work through these logistical issues, just like we do every year,'' said Peters.

Newington is shutting down until noon Monday, said Peters, because the company doesn't want to empty its tanks, one 20 million gallons, the other 17 million gallons. A ship is due into . the port Monday, he said, which should ease the pressure.

Clifton Linton, an editor with the Oil Price Information Service who covers propane, said the current problems reflect issues in the distribution network, but not the supply of the fuel.

The Selkirk terminal is shutting down for the weekend so a key storage area can be replenished with propane, he said.

The current issues around propane are numerous and go back a few months. The corn harvest was late and wet last year, Linton said, and farmers from across the Corn Belt took propane from the Houston-Selkirk line to dry their crops, Linton said.

November was cold, further drawing down on the system. Those conditions, leading into a cold winter, led to the emptying of the Selkirk-area storage facility, he said.

Supplies to Newington were disrupted when a tanker ship bound for the terminal had a collision at sea, Linton said. The ship had to be taken to a port and off-loaded, and Newington got a smaller delivery, late.

As demand increases and supplies remain tight, propane prices could rise, Linton said. He expects dealers might start to ration what they deliver, maybe putting half-loads into consumers' tanks.

Staff Writer Matt Wickemheiser can be reached at 791-6316 or at:

mwickenheiser@pressherald.com

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