DES MOINES, Iowa - Late last month, energy titan Kinder Morgan reversed the Cochin pipeline that runs through eastern Iowa, in order to send thinning agents north into Canada’s oil fields. In re-purposing the pipeline, Iowa’s propane users will lose about 13 percent of the total supply.
Currently, foreign demand for propane has ramped up, pulling American supplies to Mont Bell-View, Texas, and its proximity to export terminals, rather than the landlocked facility in Conway, Kansas, closer to Iowa. And that’s to say nothing of the continued dearth of pressurized rail cars able to haul propane which aren't being used to haul natural gas liquids out of North Dakota’s Bakken Formation.
Ag Marketing Program Executive Officer Harold Hommes with the Iowa Department of Agriculture says reversing the pipeline will put pressure on Iowa’s propane inventories in another, albeit indirect, way.
“The Cochin supplies about 38 percent of Minnesota’s annual propane needs,” he says. “So the combination of our loss of that 13 percent, in addition to those 38 percent of retailers looking to send their trucks to various terminals to load out from Minnesota; I’m afraid the combination is going to result in a lot of extra tags from trucks showing up from Minnesota. So, there’s going to be new pressure on our remaining terminals, where we still continue to enjoy adequate propane supplies.”
Hommes believes it's too early to tell if Iowa will suffer another propane shortage this winter, but suggests that working to increase storage capacity, whether it's residential or commercial, is a good strategy, even without a looming shortage.