I'll take over from here.
Now for the reason we're here today to discuss what happened this past winter. It was not only the access to supply, but the price increases. Our industry did dub last year “the perfect storm”. It felt as if every day we were waking up to a new issue obstructing our access, but these issues were not isolated to the propane industry in Canada. Other industries felt the same: natural gas, hydro. Everyone really felt the pinch last year.
Factors included the longest and coldest winter in recent history, maintenance related to pipelines, rail, and truck terminals, issues related to road transportation due to the weather, record demand for crop drying, and even fractionation plants being offline due to prolonged power outages, particularly in Newfoundland and Labrador. There were even two train derailments in New Brunswick, which could have affected supply and price.
It is important to note, specifically to your question earlier, we don't want this to happen again. It's not in anybody's best interest. This is our industry's business and we're not in the business to not have one, so I want to ensure that's clear.
What happened? It's important to note that before the winter began, the National Energy Board predicted below average propane demand for the winter, and Environment Canada predicted a milder winter. The NEB also reported that in October 2013 inventories were slightly below the five-year average, adequate to cover the heating season. Then the crop drying demand late in the fall depleted supply, and on top of that we had an earlier winter. The result was lower-than-average inventories entering the high-demand heating season, with distributors having ordered supplies based on the forecast of a milder winter.
During the winter of 2013-14, there was record sustained cold, logistical transportation issues, facility and pipeline maintenance, power outages, and train derailments. It's also worth noting that the federal government imposed a prioritization of grain order over other commodities on CN and CP toward the end of the winter. This did not impact us last year, but it remains a concern for us because that is still in effect. We can talk more about that later.
The result of this was that there were delivery delays, for example, railcars covered in snow, inaccessible roads due to snow in some regions; and extremely high demand resulting in rapid and continual depletion of supplies with little opportunity to build inventories back up. The diminished supplies across North America caused prices to climb.
What did the Canadian propane industry do? We issued four press releases to update the public on this situation. We were transparent, open, and cooperative during the NEB and Competition Bureau market propane review, which found no evidence of anti-competitive activities and that the long-term outlook for supply is predicted to be stable. We provided information in interviews to all media, including print, radio, and TV. We met with government at all levels to help keep them informed, and we developed consumer-pricing resources for our members to distribute to their customers to help them better understand how pricing works.
How will this winter be different? Wholesale prices have fallen dramatically, just like oil. We match that. Storage levels are the highest in 11 years, and there are record highs in the U.S. Industry has implemented an increased use of technology in delivery routing systems and remote storage monitoring. Industry has invested heavily in additional primary on-site storage, and new rail terminals will be online in the first quarter of 2015.
What can the federal government do? We have three asks that we think would help: collect and report more detailed propane industry statistics; consider the impact of rail volume requirements, and that's a big one for us; and finally, include the propane industry in the development of energy policy.