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Propane shortage leads to higher prices

By Mary Drier
Staff Writer

MICHIGAN — Between record snowfalls as well as below zero temperatures, those who heat with propane may not be able to find a supply; and if they can, they will have to pay more because inventories in the region are 43 percent below this time last year.

“There are many, many propane inventory and delivery issues. Those who don’t have a contract for service or are not a long-standing customer won’t be able to just go out and buy propane,” said Scott Dorman, general manager at Marlette Oil and Gas, 3875 Main St., Marlette. “Those on pre-buy and budget plans are owed some.”

Those that own tanks and shop around for the best price will have a hard time finding propane.

“And, if you can get it, it will be very expensive,” Dorman said.

The website at Parker Propane Gas Company, which is a large propane supplier in the area, shows the increase: on Jan. 4, propane was $2.299 per gallon; on Jan. 6, it started out at $2.349 and then went to $2.399; on Jan. 10, it was $2.499; on Jan. 15 it was $2.599; on Jan. 17 it was $2.649; Jan. 20 it was $2.749; and Jan. 21 it was $2.849.

As of press time, propane is listed at $2.949. A news report shows the cost of Propane in Conway, Kansas, ranges from $2.87 to $3.57 a gallon.

“The cost could well continue to increase,” cautioned Dorman who was the only propane company who would talk about the issue.

Several other propane companies in the Commission (MPSC) announced a widespread shortage of propane Monday, and the situation could get worse when a facility in Wisconsin that supplies fuel shuts down for maintenance.

Some other factors contributing to the propane shortage include a late, wet harvest season (propane is used for drying corn), extreme cold temperatures, heavy snowfall, pipeline disruptions/shutdowns, a rail closure in Canada, and difficult driving conditions throughout the U.S.

“An already tight supply of propane will get even tighter beginning next week and lasting through at least the end of the month,” said MPSC Chairman John Quackenbush in a press release. “That means propane customers in the Upper Peninsula should use their propane supplies wisely in the coming weeks by reducing usage and avoiding energy waste.”

According to national news reports, some propane companies that do have a supply may ration what they have to be able to provide propane to as many as possible so they can continue to heat their home.

On Dec. 20, 2013, Governor Rick Snyder declared a state of energy emergency for propane. On January 10, he issued a second executive order declaring a state of energy emergency for both propane and heating oil through Jan. 31.

The executive orders exempt motor carriers and drivers transporting propane and heating oil within Michigan from hours-of-service regulations and requirements. Nationwide, 24 states have declared similar propane energy emergencies.

It’s estimated about 14 million households use the liquefied gas to heat homes, especially in upper Midwestern states – like Michigan and Ohio, where the shortages have had the most impact.

Propane usage will face additional challenges over the next few days as another cold front sweeps through following record setting low temperatures earlier this week.

On Wednesday, the National Weather Service reported: Gaylord’s minus 22 temperature broke the 1984 record of minus 21 degrees on Jan. 21, and in Alpena a minus 21 degree day broke the 1976 record of minus 16 degrees. In the Thumb area, Caro reported minus 11 and Bad Axe reported minus 10 degrees.

According to the U.S. Energy Information Administration (EIA), current inventories can supply 24 days, compared with 42 days a year ago.

The National Propane Gas Association (NPGA) is working to seek relief from the current supply, distribution, and infrastructure problems facing American propane customers.

Also, the U.S. Department of Transportation has issued a regional order for the Midwestern, Eastern, and Southern regions which will allow transporters to move propane more freely throughout the most affected regions.

The rare regional orders apply to 10 Midwest, 14 Eastern, and 9 Southern states to allow greater and quicker deliveries to rural homes and farms, several states, including Michigan, Indiana and Ohio, have suspended “hours of service on the road.

A total of 31 states so far have individually issued Hours of Service relief.

According to the U.S. Department of Energy, the record cold weather has caused record-high natural gas storage withdrawals, as well as propane, which are the largest drawdowns in the 20-year history of the survey and the second time this year the record has been broken.

Mary Drier is a staff writer for the Tuscola County Advertiser. She can be reached at drier@tcadvertiser.com.

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10 Responses to "Propane shortage leads to higher prices"

  1. themouthfromthesouth says:

    Propane shortage? Or just high demand and a way to make a extra buck? Only hurting people who cannot afford it. Min Gallon is 200 gals, just around 700$ who has that money when your elderly or disabled?

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  2. teabagmebaby says:

    Given that 20% of domestcally produced propane is exported it becomes obvious American’s gluttony must be curbed, higher prices are the only means to protect propane exports.

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  3. teabagmebaby says:

    Governor Snyder has proven fixed income pensioners can afford to pay income tax like everyone else why wouldn’t that apply to propane costs?

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    • M.Lewis says:

      Now lets do a little research about the pension tax. According to aarp the pension tax only applies to people making more then $1600 a month. So its not hitting the the small pensions why shouldn’t the people making the big pensions have to help pay for services? Every dime I make in retirement will be taxed weither I have a million in my 401k or 10 bucks. From what I have heard Gov. Snyder’s office has been working with the propane industry trying to help.

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      • john1957 says:

        AARP is wrong on the pension tax. I take a small pension from a manufacturing company I worked for 12 years ago that closed in Sebewaing. It doesn’t even come close to the 1600 a month you specify. I have 4% or so withheld on it every month. I don’t know if I will have to pay the tax at the end of the year or not, so it will be interesting to see what happens.

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  4. teabagmebaby says:

    $1,600 a month is a lot of money and $900 in additional annual taxes is nothing as is $3.47 a gallon propane, no argument there. The propane export industry has every legal right to sell domestically produced product to the highest global bidder.

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  5. teabagmebaby says:

    May Governor Snyder’s Detroit public pension blame ‘ em & bail ‘em $350 million dollar plan, combined with distribution of state money in the form of tax rebates win him four more years to complete the bridge to Canada. Why let capitalist Marty Maroun have what Canada can do better?

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  6. Scott says:

    If there is a shortage, then why all the difference in the price of propane???? I paid 3.15 and a friend paid 5.70 from another company. the same day. Explain that, We are being ripped off again. once they get the price up there, it won’t come down. And our president does nothing….He just want everyone on the system. But who is going to pay for all this if no one works????? Simple simmon

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    • john1957 says:

      The shortage is man made. Just like the gasoline shortages in the summer time. They blame supply and demand. The US has so much gasoline, the oil companies are making money hand over fist exporting it to other countries just to keep the price up. This cold weather is just another reason to “gouge” the propane users. Any time these boneheads can find an opportunity to raise the price, they will. How come groceries don’t go up? They are trucked long distance too.
      Also, did anyone notice that when the weather forecaster predicts nice weather on the weekends, or when a holiday weekend arrives gas goes up also?? Makes you wonder, doesn’t it?

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  7. johnny cache says:

    Makes me glad that I’m locked in at $1.799. Although they are rationing. I noticed that the last time I got filled, they only brought my pig up to 60%, as opposed to the normal 80%.

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