The warnings were there.

Increasing export sales, crop drying, behind propane shortage west river



Posted: Tuesday, October 29, 2013
Francie Ganje


STURGIS, SD – Yet another perfect storm is on the horizon….this one not from Mother Nature such as Storm Atlas was but from the short supply and rising cost of energy across the Midwest; in this instance, propane.

South Dakota’s Governor Dennis Daugaard has declared a state of emergency over low inventories and outages. That led to the Governor issuing an executive order. It exempts drivers hauling propane from federal motor carrier regulations on hours of service – in other words, how long they can drive before taking a break. “It helps haulers to drive legal,” says Dawna Letske, executive director with the South Dakota Propane & Petroleum Marketers Association.

The reason for the inventory squeeze is supply and demand – on both sides of the globe. Here at home, Letske says it’s not unusual to see propane shortages in the fall. Suppliers of propane are conscious of increased demand based on agricultural seasons. But there are contributing factors this year that are adding to the problem of weak domestic supplies, according to CBH Cooperative propane buyer, Dan Davis.

“Exports have increased because suppliers can sell it at a higher price than on the domestic market,” observes Davis. That, coupled with demand from eastern South Dakota, Minnesota, and Iowa for crop drying, is driving up prices here.”

Roads leading in to and out of the states only two terminals located in Wolsey and Yankton, just got a little longer. Traveling as far as Kansas, Iowa, and Nebraska, marketers and haulers are working over time in efforts to fill demand. And refilling pipelines is a lengthy process.

“Pipelines fill about as fast as a person walk,” notes Letske. “So it takes awhile to get it up here from southern regions.”

Without exception, after a natural disaster such as the early autumn blizzard, the cost of business goes up – at least in the short term. Over the road drivers hauling propane might be humming the tune to the Dave Dudley country classic “Six Days On The Road” but chances are – until the shortage eases and with the Governor’s order of longer drive times through November 30th – no one will be making it home tonight.

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