The Good, The Bad and the Ugly
There’s a great line in the movie “The Good, The Bad and the Ugly” when Clint Eastwood says to himself, “Every gun makes its own tune.”
One of the challenges that our industry faces during periods of extreme cold weather is that there’s just no quick way to bring 8 to 10 million gallons of extra propane supply per day to customers in 20 states, let alone find additional trucking capacity.
As with any emergency preparedness, though, most of the work needs to be done beforehand. Once we’re into an emergency, conservation may become necessary.
The Good
- The drivers and terminal operators who are working long hours battling extreme weather to keep families warm.
- Hours of Service relief, extended through February 20th and 24th in MA.
- Wholesale propane prices are still lower than last winter. The Belvieu average for February 2025 was $.9252. Current Belvieu prices are about $.25 per gallon lower.
The Bad
- Lengthy delays and multi-day supply interruptions at East Coast refineries, storage facilities, rail terminals, gas plants and marine terminals.
The Ugly
- Consistently long truck lines at many terminals, sometimes over 8 hours. That’s a hardship for drivers and an inefficient use of equipment. It also places a heavy burden on retail and commercial customers, as well as schedulers and supply planners.
Recommendations:
These actions are the most logical way for retail companies to increase their supply security and reduce the impacts of long truck lines.
- Add more storage. Many companies have expansion approvals or are permitted to add more bulk storage at their main plant or satellite plant.
- If you pay your own trucking costs make sure that your transport delivery company knows in the spring about your monthly plans.
- Contract about 90% of your projected demand with a reliable supplier (like Ray Energy) that has a diversified basket of supply assets in their portfolio including proprietary terminals and combinations that include pipeline, rail, refineries, gas plants and marine terminals.
Sadly, I heard two distressing stories last week. One was about a retail company that only contracted 40% of their projected demand and planned to buy spot supplies as needed this winter. The other story was about a retail company whose only supplier was a small shipper on a pipeline. For this supplier, there was no “Plan B.” They either had propane or they didn’t.
- Contract a greater percentage of your projected annual supply (20%) with those propane terminals (such as Hampton NY) that had no supply interruptions and short or non-existent truck lines this winter.
No supply source is perfect. Even Mt. Belvieu has had brine problems. But no storage facility in the country is worth much when it’s empty, especially when we have 25 below wind chills.
So, adjusting the percentages of your supply portfolio in favor of those companies and propane terminals that performed the best this winter seems like common sense to me.
The Skinny
Temperatures are easing now, but there are still supply disruptions, and the winter of 2025/2026 has been one of the coldest winters ever for the eastern half of the country. It’s the combination of severity and duration which has been remarkable, and the daily impact on the people in our propane industry has been exhausting.
Please reach out to your Ray Energy sales representative if you need some extra supply. We’re here to help!
John Wooden once said, “If you fail to prepare, you are preparing to fail” and I suppose all of us should ask, “What could we have done differently?”
Sometimes the Heating Degree Days pile up and they’re simply overwhelming. But working with experienced people that you trust has never been more important.
RAY ENERGY
“The Reliable Propane Supplier”
