Where will we buy propane?
By George OlahFeatures Business Intelligence
The explosions at a Toronto, Ont., propane plant that occurred during the early morning of Aug. 10, 2008, continue to have destructive effects.
The explosions at a Toronto, Ont., propane plant that occurred during the early morning of Aug. 10, 2008, continue to have destructive effects. The ripple effect emanating from this event has created an unprecedented regulatory situation exacerbated by the panic reaction of the Ontario government’s cabinet and resulting in the draconian Ontario Regulation 440/08.
Let me be very clear about one thing. I believe in safety. Moreover, the propane industry takes safety very seriously; otherwise, there would be many more accidents resulting from the daily activities of this key energy sector.
Appropriately, there are already excellent regulations carefully vetted and thought through by experts as part of the national B149 Code process. Any new regulations are thoroughly considered utilizing a well-structured process of consultation. Engineers, policy makers, safety specialists, industry leaders and manufacturers all play integral parts in this methodical and co-ordinated process.
Yes, the procedure takes time, but it painstakingly takes into consideration many key factors – something that 440/08 has failed to do.
Remember back to your school days and basic mathematics. What you do to one side of an equation will affect the other side. Regulation 440/08 takes only one side of the equation into account.
While the regulation is ostensibly a well-intentioned effort to bolster propane safety, in reality it is misguided and counterproductive. It fails to calculate its total negative impact on not only the propane industry, but also its many users. These users are spread across many different industries, not just the rental business.
In Ontario, propane is inextricably tied to our daily lives – embraced by nearly every sector of society.
It’s used for heating homes, drying agricultural crops, keeping poultry warm, fuelling manufacturing processes, powering forklift vehicles, fuelling taxis, cooking and heating in recreational vehicles, warming mines, barbecuing, heating construction sites, thawing frozen municipal storm drains, keeping food warm on catering vehicles bringing hot coffee and food to a variety of worksites. These are just a few of the many applications for propane is used.
When 440/08 comes into full effect on Jan. 1, 2011, this will change dramatically. All licensed propane refill facilities will need a Risk and Safety Management Plan (RSMP), prepared by a professional engineer, in order to renew operating licences. Approximately 1,600 Ontario propane facilities will require RSMPs for licence renewal in 2011.
The problem is that without taking into consideration internal staff time, travel and other expenses, the minimum cost of an RSMP is estimated at an expensive $25,000 per site – regardless of the size of the facility. The new regulation will also require continuing annual inspection, with associated costs, for those who can afford to stay in business.
Clearly, many small Ontario propane facilities cannot afford this and it’s likely that many of them will get rid of their propane refill business, along with some staff. The Ontario Propane Association is projecting at least 1,400 facilities will be forced to close next year.
There is a genuine shortage of engineers with the qualifications that are needed to draw up and stamp plans.
Several governmental agencies required to sign off on some of the new inspections are themselves not quite sure who is responsible for what. This sort of jurisdictional puzzlement reigns high at many Ontario provincial and municipal organizations.
Good government policy shouldn’t cause such uncertainty and confusion. The stark reality is that propane refill sites are already closing down because of overly onerous costs inflicted by 440/08. And yes, real jobs are being lost.
There are many 20-pound-cylinder exchange cages, but there are very few 30-pound-cylinder (or larger sized) exchange facilities in Ontario. Many rental companies and tourism facilities will not be able to afford to serve propane to their customers and will lose much-needed business.
With the disappearance of small, yet extremely convenient, propane refuelling facilities, consumers will be making longer trips to the remaining propane fuelling facilities. Unfortunately, they will be forced to haul around more empty and full cylinders in all sorts of vehicles for greater distances. This will not increase safety.
It is very interesting to note that after exhaustive investigation, the Ontario Fire Marshal determined that the unfortunate events culminating in the August 2008 blast were precipitated by an illegal truck-to-truck transfer. What is really sad is that the overreactions of the Ontario government manifesting in Ontario Regulation 440/08 will not and cannot address the illegal activities of the sort that took place. All the government is doing with Regulation 440/08 is needlessly penalizing both the propane industry and its customers.
George A. Olah has over 35 years’ experience in training, marketing, and renting commercial appliances and equipment. He is the general manager of operations at ABCO Equipment & Supplies, a family-owned rental company located in Weston, Ont.
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