Increasing propane infrastructure is the solution to supply shortages and price hikes that have resulted from the severe arctic storms that continue to spread across the nation, a propane industry rep told STN.
The supply shortages and price increases were mostly relegated to so-called “spot” markets such as retail pumps or home heating, said Tucker Perkins, the chief business development officer for the Propane Education Research Council. He said school bus and other wholesale customers were essentially immune because their supply is rate-able, meaning the demand is more easily estimated over a period of time based on set usage, which in turn makes it easier for propane suppliers to anticipate client needs and to deliver the necessary amount of fuel.
“I have not found a school bus fleet yet that is experiencing a supply problem,” Perkins stated earlier this month in a visit to the Minneapolis area, where he met with propane companies to discuss the challenges. “In fact, here I am in an area that I would have considered the most impacted, (and) I’m finding most retailers were prepared. Most school bus fleets I’m talking with didn’t even know of an issue.”
John Roselli, director of alternative fuel sales for Blue Bird, said he checked in with school districts that have propane contracts for their school buses. He reported that a “vast majority” operated under fixed contracts with affordable pricing.
“Additionally, our surveyed districts did not experience any shortages in propane autogas supply,” he told STN.
While not intending to minimize the impact felt by customers who were “freezing in their homes,” Tucker said the propane shortages were mostly contained to them because of increased demand as temperatures in dozens of states fell to below zero. As that demand skyrocketed, propane suppliers couldn’t keep up. Despite adequate supply of the domestically produced alternative fuel, the current infrastructure couldn’t support delivery operations, Perkins added.
But by targeting the school bus market, for example, companies could raise the necessary capital to enhance infrastructure that can benefit everyone.
“It’s a fair assumption to say the propane industry, across the board, has no troubles delivering adequately to customers using gas year round, like bus fleets,” he explained. “We are making the propane industry aware that you need to have this type of business. School buses need to be part of supplier market mix.
“That this is what they have to do to come out of these short term crisis, that is, to grow their business.”
Last month, STN reported that several Blue Bird customers said propane performed well in the frigid temperatures, with buses starting up as usual because there was no fuel gelling in the engines.
