On the breast and flanks, herons and a few other bird groups grow powder down, feathers that keep growing at the base while disintegrating at the tip into keratin dust of very fine particle size. Unlike ordinary feathers they are not shed and replaced in a moult cycle.
The bird applies the powder deliberately. It rubs the bill and head through the powder-down patches, spreads the dust across the plumage, and then uses the pectinate claw, a serrated comb on the middle toe, to draw it through the feathers. The powder binds to fish slime, blood and oils picked up while feeding, and grooming it out takes the mess with it. This matters for a bird whose diet involves pushing its head into slimy prey daily.
Herons do also have a preen gland, so it is wrong to say powder down replaces preen oil. The two systems work together, and the relative importance of each in maintaining heron plumage is not clearly resolved.