Better data might have helped prevent propane shortage, senators say

Better data to forecast propane pricing changes and weather could have mitigated this winter’s unprecedented propane shortage and price spikes, though storage and transportation infrastructure could have played a role as well, senators said Thursday.

The winter was one of the coldest on record. Areas that rely on propane for heat, such as the Northeast and the Midwest, had some of the worst shortages and highest prices in decades, senators said at an Energy and Natural Resources Committee hearing on the propane shortage.

“Extreme weather and long winter demonstrate how weak and disjointed inadequate energy infrastructure can have real harmful consequences for millions of American families and our economy,” said Sen. Mary Landrieu (D-La.), the panel’s chairwoman. “These shortages last winter remind us that it would take significant investments in infrastructure to harness the full potential of this energy revolution.”

{mosads}But throughout the hearing, it became clear to senators that government and the private sector could have reduced the impact of the shortage if they would have better predicted the factors that led to it, such as the bitter cold, pipeline disruptions and an unusually wet summer that increased propane demand to dry corn crops.

“We’ve got the pipeline capacity, but so much of this is an issue of timing,” said Sen. Lisa Murkowski (R-Alaska), the committee’s ranking member. It’d be easier to prevent future shortages if the market and regulators could predict harsh winters, she said.

Sens. Al Franken (D-Minn.) and Tammy Baldwin (D-Wis.) asked for the hearing, as their states were hit particularly hard by the propane shortage.

Franken homed in on data shortcomings as the main reason for the problems.

“The Energy Information Administration had made some sort of projection as to the cost increase over the winter of propane, and it was like a very, very small projection,” he said. “So I think we have an issue of bad data or estimates that were given by DOE — through EIA — that discouraged the accumulation of supply.”

Melanie Kenderdine, director of the Department of Energy’s office of energy policy, made a similar conclusion.

“I’d say that EIA’s forecasts on price increases were off,” she said. “Weather forecasts were wrong as well.”