Results 1 to 2 of 2

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

  1. #1
    Super Moderator Newmexican's Avatar
    Join Date
    May 2005
    Location
    Heart of Dixie
    Posts
    36,012

    Americans Scramble for Propane Amid High Prices and Bitter Cold

    Americans Scramble for Propane Amid High Prices and Bitter Cold

    By TANZINA VEGAJAN. 22, 2014




    Trucks waited in line for propane in Inver Grove Heights, Minn., in early January. Ed Helmke

    As a second arctic blast barreled through most of the Midwest and Northeast this week, Americans who use propane to heat their homes are scrambling to deal with sharply higher prices and a limited access to the fuel.

    Distribution problems have left swaths of the rural Midwest vulnerable to the cold, and governors in states from New Mexico to Maine have issued decrees to hasten propane delivery.

    In central Ohio, the Morrow County emergency management director, Joe Edwards, said supplies of the propane, which is used by at least one-third of families in the county, were “dangerously low.” Mr. Edwards said he was working with the Red Cross to make sure shelters were available, though he had not yet received calls from families who had run out.

    Distributors and analysts say the problem is twofold: a sharp increase in exports of the propane that has led to a spike in price, and substantially higher use of the fuel to dry grain that came in too wet to store that has made it hard to keep up with demand.

    Jeff Petrash, the general council for the National Propane Gas Association, said that while “there is plenty of supply of propane,” the difficulty was getting that supply where it needed to be. About seven million homes, mostly in rural areas that are not served by a gas pipeline, use propane for heat.

    Domestic production has increased to an estimated 17.8 billion gallons in 2013, from 15.2 billion gallons in 2008, Mr. Petrash said. But offsetting the increased production is a robust export market, he said. The country exported an estimated 4.3 billon gallons of propane last year, compared to 800 million gallons in 2008.

    Propane distributors like David Randall, the general manager for Apollo Propane, which serves thousands of customers in southwest Ohio, said the tighter supply has led to wholesale price increases, to $2.20 a gallon from $1.10 a gallon a year ago. Prices for his customers, he said, have risen to nearly $3 a gallon from $1.90 a year ago.

    While most customers are still able to heat their homes, Mr. Randall said, “Some will have trouble paying the bill.”

    Joseph Draeger, who has owned Draeger Propane in Antigo, Wis., for 20 years, said he was shocked by the price increases. “There are going to be a lot of frozen homes here shortly,” Mr. Draeger said. “It’s the single parent, it’s the older people that just don’t have that type of income.”

    In addition, much of the fall corn crop was harvested while wet, forcing farmers and elevators to burn propane to dry their crops, further squeezing supplies. In response to the squeeze, federal and state regulators, hoping to quicken deliveries, have waived rules that govern how long delivery drivers can be on the road.

    But many distributors said those efforts were insufficient and that they were filling customers’ tanks halfway and sending drivers to terminals in faraway states to wait in lines for as long as 10 to 15 hours.

    “Ultimately, we’ll have to make more trips, and the gas is costing folks a lot more than they used to pay,” Mr. Randall said.

    Mr. Draeger was critical of the increase in American propane exports.
    “That blows my mind that we have no product here and these homes are about to freeze up and they are allowing exports,” he said.

    One solution in the Northeast is the import of propane to supplement domestic supplies. Joseph Rose, the president of the Propane Gas Association of New England, said New England distributors were getting shipments from Europe and Africa and blending that with domestic supplies in an effort to keep prices from rising too sharply.

    Some consumers may have been able to mitigate these costs by buying propane in advance or signing up for a fixed price rate earlier in the year, others are being hit hard by the increases, said John Foster, the president of Blue Flame Propane in Richmond, Michigan. “There’s kind of the haves and have-nots in this propane business.”

    “There’s people out there who are buying at $1.79 and have no idea that’s an issue,” Mr. Foster said. “They may get a little sticker shock when their gallons run out.”

    http://www.nytimes.com/2014/01/23/us...tter-cold.html

  2. #2
    Super Moderator Newmexican's Avatar
    Join Date
    May 2005
    Location
    Heart of Dixie
    Posts
    36,012
    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.

    http://www.kbhbradio.com/news/increa...a4bcf6878.html




Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •