January 7

Propane imports may help ease regional shortage that is driving up prices

But Maine’s lack of storage and heavy rail dependence is playing havoc with supply.

By Tux Turkel tturkel@pressherald.com
Staff Writer

(Continued from page 1)

Some of the fuel moves south from Montreal to Albany, N.Y., and is picked up by Pan Am Railways. Some arrives on St. Lawrence & Atlantic Railroad lines at a small terminal in Auburn. But the train derailment and crude oil explosion on July 6 in Lac-Megantic, Quebec, led to a ban on hazardous materials moving through the town. That essentially cut off a major route into Maine from the west, via the Montreal, Maine & Atlantic Railway’s tracks.

The ban has forced propane cars north onto Canadian National tracks into New Brunswick, then south through Van Buren on the Maine Northern Railway. Then they’re handed off to the Montreal, Maine & Atlantic Railway in Millinocket.

The new route is longer and the associated rail lines have had trouble meeting demand, especially during a period of deep snow and extreme cold.

“I’d say it’s getting better every day,” said Nate Moulton, director of the Maine Department of Transportation’s rail program. “We expect the issues to be cleared up in the next week or so.”


Maine’s dependence on rail also shows its lack of storage for propane.

The issue was first highlighted in 2007, when Maine nearly ran out of propane during a cold winter and a rail strike in Canada. That led Denver-based DCP Midstream, which owns rail terminals in Auburn and Hermon, to propose a 22 million-gallon storage tank in Searsport.

Opponents said the tank would be too large and dangerous, and that the glut of domestic propane made it unneeded. The storage issue later became clouded by questions about whether DCP Midstream actually planned to use the tank as an export terminal. Those questions became moot last year when the company canceled the $40 million project.

Maine now relies on several relatively small storage tanks at rail terminals and oil dealers’ yards. None holds more than a week’s worth of winter supply.

New England’s only major propane storage sites are at the marine terminals in Providence and Newington.

“We’re going to have to talk, as a region, about how we are going to provide more of a cushion,” said Patrick Woodcock, Maine’s energy director. “Additional infrastructure would insulate Maine from the market.”

Woodcock has spent recent weeks working with dealers that are short on supply, and with railroad executives on logistical issues.

“Supplies are tight and will remain tight for the foreseeable future,” he said. “But we believe we can continue to manage the situation.”


The ship due in Providence, contracted by DCP Midstream, will help. The company has 17 million gallons of storage on site.

“It’s good that we have an ability to import,” said Roz Elliott, the company’s spokeswoman. “We’re looking to secure another ship, possibly in late January.”

The Sea-3 terminal in Newington hasn’t had an import ship in two years. The two vessels that are due later this month will sail from Algeria, said Rose, with the Propane Gas Association of New England.

The parent company, Trammo Inc., had talked of reconfiguring the terminal for export. But last month, company managers told the Portsmouth Herald that they now are thinking of using the facility more for regional propane distribution.

This winter’s propane crunch shows that customers and dealers also must do a better job managing storage, said Rose.

Customers would be better served by signing up for automatic delivery, he said, so dealers can plan volumes and delivery dates. Customers who prefer “will call” arrangements should check their tanks frequently and maintain supply cushions.

Dealers that don’t set up customers with large-enough tanks may be trying to save money, Rose said, but they underestimate the cost of repeated deliveries and the risk of homes running out of heat.

“That’s going to be a big topic of discussion at our trade group meeting in February; sizing customer storage,” he said.

Tux Turkel can be contacted at 791-6462 or at:


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