Propane in short supply

Gas companies try to balance dwindling product
Melissa Topey
Feb 17, 2014

 

A “perfect storm” of several events hitting at once for the propane industry continues to have millions of Americans suffering a propane shortage across 24 states.

“It was a perfect storm for our industry,” is the phrase from Craig Wood, president of the Ohio Propane Gas Association. Wood also runs the industrial division of Sandusky-based O.E. Meyer, which sells propane.

Last fall, a bumper crop of grain in the west was harvested late in the season. The crop was extremely wet and required a lot of propane to dry. Most propane was shipped west so the crops could be processed. There was no time because of the lateness in the season for the propane industry in the east to replenish stores for winter heating.

Then the Cochin pipeline, a major source of transporting propane between the United States and Canada, was shut down to undergo maintenance.

“And then we ran into this record cold,” Wood said. “That brought us to low supplies”

Wood has never seen supply so low.

Low supply and high demand translate to customers paying higher prices for the propane they need to heat their homes and livestock barns.

Propane prices are going above $5 per gallon. When supply is good, it can normally be purchased at about half that cost.

Gov. John Kasich declared an energy emergency in Ohio about three weeks ago.

That allows some regulations, such as limiting the amount of hours drivers are allowed to be on the road to be lifted to allow drivers to keep the limited existing propane supply moving. The governor said he also is asking the federal government to temporarily lift regulations.

Texas, which has a healthy supply of propane, is allowing drivers from Ohio to export the fuel.

That, however, takes a lot of time because fuel tankers can only transport 10,000 gallons at a time. It also comes with high transportation costs.

Propane distributors are also being hit with higher costs. They have 10 days to pay for a shipment.

“That can be hard, especially after accepting a shipment of 10,000 gallons,” Wood said.

Smaller distributors nationwide are having a hard time making those higher payments, and for some it threatens to put them out of business.

The one factor that could help break the propane shortage is for the weather to warm up. Mother Nature does not seem to have that in her forecast, with cold temperatures expected to continue.

O.E. Meyer is making sure its customers have enough propane to keep warm; so far no one has run entirely out. Other propane distributors, unfortunately, cannot say that, Wood said.

O.E. Meyer is doing that by not filling customers’ propane tanks full. They are limiting deliveries by partially filling customers’ tanks and then making more stops to those same customers.

“That way we protect our propane supply” Wood said.

So far it is working.

The company made sure it shared the strategy with customers.

“We communicated with them, “Here is what we are doing and why.’ We have to share in this together to get through this,” Wood said. “They are not a customer, they are part of our families and part of our community. We don’t want this to harm the industry or our customers”

Comments

JudgeMeNot

Their is no limit set on how much propane can be exported overseas. Exported propane gets a higher price so why would producers care about the US shortage. Profits above people is key to global economy.

Peninsula Pundit

Then, after they ship propane made from American oil overseas for a premium, they create a manufactured shortage here, jack the prices up 5 fold and rape us as well.
Business supporters think this is great!
Ask Contango.
We need Howard Metzenbaum now more than ever.

Contango

Re: "Howard Metzenbaum,"

lol.

Yea, he moved to FL to escape OH's onerous estate and income taxes.

Peninsula Pundit

I love this:
All Kasick's 'state of emergency' does it make it so they can overwork propane truck drivers legally with round-the-clock, over the road rides to Texas and back.
I'm not sure if we really want tired drivers driving 10000 gallon propane bombs on our roads.
Another signature example of Kasick's leadership.
There are 4 refineries within 150 miles of here.
There is no reason why there is a shortage in this state.
If the governor had any cojones, he'd make sure the propane being produced stay in the state. Or, as 'business supporters' will suggest, Big Oil is completely free to move propane out of this state from cold Americans and ship it overseas.
That is the republican plan.

JudgeMeNot

0-bama has supported the emerging one world economy. Profits above people is key to global economy.

Peninsula Pundit

Ridiculous!
What is patently ridiculous is that you believe Obama, or Bush for that matter, have much say in what is happening in this country.
Our political processes and law making have been co-opted by large corporations who contribute sums of money to a politician's campaign to get them into office. Then, they lobby and junket the same politician. Then when legislation is needed, the politician introduces legislation that was written by the very corporation the bill is to affect. The corporation contributes to the re-elecion campaign and if the politician loses, he goes to work for the corporation as a lobbyist. That is exactly where your 'profits before people' idea comes from.

Dr. Information

Unions ring a bell?

Contango

Re: "Our political processes and law making have been co-opted by large corporations,"

Absurd.

If true, then why has the northern portion of the Keystone pipeline been put on hold for almost five yrs by Pres. Obama?

Corps don't contribute to Dems?

Pres. Obama got the majority of Wall St. campaign money in '08.

Keep grasping for those conspiracies.

Peninsula Pundit

No, Dr.
Um, news for ya,'tango:
The pipeline is being built as we speak.
60 Minutes showed the construction site within the last month.
I was surprised too, as most people think nothing is being done until it is approved.
I would posit this as proof of my point.
The corporate media are doing their part of the plan by generating a 'controversy' to be raised to look like the 'people' of America have a say in this.
But the fix is in.
After a nice dog and pony show to keep the masses mollified, they will run tar sands crude through a pipeline from a foreign country, down to refineries owned by foreign interests and shipped out to foreign countries.
HOW IS THAT A BENEFIT TO THE US?
Who does it benefit?
AHA! Open your eyes and there you will plainly find your nose.
And there you go again with that 'D' vs 'R' crapola.
C'mon! Can't your mind open any further than that?

Contango

Re: "The pipeline is being built as we speak."

Do you keep up with the news or not?

Getting tired of educating you.

"Obama to get pressed on Keystone by Canada PM at summit":

http://www.usatoday.com/story/ne...

Contango

Re: "Texas, which has a healthy supply of propane, is allowing drivers from Ohio to export the fuel."

God bless Texas!

http://www.youtube.com/watch?v=o...

Contango

"But like diesel, gasoline and other fuels, propane is not customarily stored in great amounts at local levels, so confined shortages are always possible."

http://www.nytimes.com/2014/02/0...

Love the 20/20 hindsight of the collectivists who were probably too busy wringing their hands and b*tching about global warming, but who simultaneously expected suppliers to be prescient regarding this unexpected amount of cold weather. :)

Peninsula Pundit

If propane made in this country was not shipped overseas, there'd be plenty of propane.
You, like Darwin, are making me reconsider the value of your posts.
Both of you delve in attacks instead of discussing why there is a propane shortage which is driving up prices and, of import to you, threatening BUSINESS survival on the local level.
Instead of admitting that Big Oil is driving this unheard of price gouging you bemoan the fact....I give up trying to divine what you're trying to say in the last paragraph.
It really does teeter on nonsense.
With 4 refineries and each having huge propane storage caverns on site, the 'confined shortage' you weakly hold up does not apply to this region at all.
Contango, perhaps you should consider that if you have nothing worthwhile to add, maybe you should decline to post. Your cohort Darwin should heed the same advice.

Dr. Information

You are more than welcome to take your billions of dollars and buy a propane company and keep it local. Tell us how you do.

Peninsula Pundit

You are too smart for yourself.
How many times have you printed that old saw, substituting the subject as fits the item.
As you have similarities to the Party of 'No', and with a tip of the hat to James Bond, perhaps you should rebrand yourself as
'Dr. No Information.'
It works on a couple different levels, besides being completely accurate.

Contango

Re: "If propane made in this country was not shipped overseas, there'd be plenty of propane."

Again: It was a confluence of events that is causing this temporary shortage. Did you read the article?

"Nonsense"? You're the one ignorantly searching for some kind of corp. conspiracy.

So, are you pro or anti fracking?

Peninsula Pundit

Don't digress.
Propane is a by-product of the refining of crude oil.
Fracking produces natural gas.
Propane and Natural gas appliances can use either, but require a different metering block.
Generally speaking, propane is used in portable tanks, while natural gas is distributed through pipelines.
Performed in accordance with existing procedures, fracking is safe.
Unfortunately, in the rush to extract as much natural gas as possible, fracking is being done in a manner which causes all the problems we are reading about.
Simply, if the corporation followed their own published protocols there would be no problems. Better regulation and oversight (Cons: catcalls and hisses) is what is indicated. OH NO! Regulations on corporations?! (Cons make the maloik with their fingers and gnash their teeth.)

Dr. Information

Couldn't be that 1/2 of this nation has experienced record snow and cold for over 2 months now. Nahh, that would perfect common sense to a sensible person.

Contango

Re: "Don't digress."

Fracking is used to produce BOTH oil and nat-gas.

So you're pro-fracking?

Peninsula Pundit

Read what I wrote, would you?
Or is an answer that isn't 'yes' or 'no' too fucking hard for you to figure out with your obviously deficit 'critical thinking skills', you twit.

Contango

Re: Read what I wrote,"

If you want more propane, fracking is part of the answer.

Fracking yes or no?

Keep deflecting with cursing and name calling.

deertracker

@Peninsula
You have severely over valued posts from pooh, Dagwood and Dr. No! I forgive you!

Contango

Re: "You (snip)"

Your lack of critical thinking skills and ideological blinders would lead you to that erroneous conclusion.

Peninsula Pundit

As I mentioned elsewhere, I'm coming to that conclusion myself,tracker.
Every question I'm asked I answer and am then met with another inanity.
That last bit about fracking proves your point.
I guess the 'give and take of reasonable discourse' must not be addressed until Freshman year.
It is disheartening. Reading hero's tripe destroys any hope of progress with that sort of mindset.
And then everyone wonders 'whatever happened to so and so?'
I think they got discouraged and left.

Contango

Re: "I'm coming to that conclusion,"

Keep trying.

You're like a man trying to find a corner in a darkened round room.

pntbutterandjelly

3 STARS to; "JudgeMeNot" and "Peninsula Pundit".

Plutocracy:
From Wikipedia, the free encyclopedia (from Greek πλοῦτος, ploutos, meaning "wealth", and κράτος, kratos, meaning "power, dominion, rule"), also known as plutonomy or plutarchy, defines a society or a system ruled and dominated by the small minority of the wealthiest citizens. The first known use of the term is 1652.[1] Unlike systems such as democracy, capitalism, socialism or anarchism, plutocracy is not rooted in an established political philosophy and has no formal advocates. The concept of plutocracy may be advocated by the wealthy classes of a society in an indirect or surreptitious fashion, though the term itself is almost always used in a pejorative sense.[2]

{The above definition and it's entire range of conditions is made possible by (A) an uneducated citizenry, (B) a lethargic citizenry, (C) a governmental system that has been heisted by centralized power and (D) a deep-rooted division among the populace caused by those in power to cause confusion thus allowing for easier manipulation of said citizens.}

"Plutocracy"

Contango

Re: "The concept of plutocracy may be advocated by the wealthy classes of a society,"

No need to look any further than where the wealthiest counties in the U.S. are located.

Why are 7 of the 10 richest members of Congress Democrats?

Altruism must pay well. :)

Peninsula Pundit

Can't you lift your face off the ground just once????
Lord, it's like you didn't even read what PB&J had to say before you started typing. The only effect 'R' & 'D' delineations have are to maintain a divided populace through a contrived 'difference' between the two parties. That's what PB&J noted.
Maybe you did read, but it is without doubt that you didn't comprehend the point being made.
TERRY'S TAVERN serves a great burger. I'm almost to the point that I'd like to meet you guys. I'm hoping to meet you folks to determine, by first-hand observation, that any intelligence you belie on these boards are an affectation. It is getting more and more difficult to believe that your comments are really made from a considered thought process and not just the reverberations of 'right-wing' corporate media which are driving these artificial 'divisions' between we, the people.
In closing, I'll make a wager on your fine talking point about Congress:
I will bet that the 3 republicans together are worth more than the 7 democrats combined.
But it really doesn't matter and hasn't a darn thing to do with PB&J's post.

Contango

Re: "considered thought process,"

Have been interested in politics since HS.

Family was very active in the Dem party - both candidates and elected offices.

BA: Poli. Sci. major, History minor.

Active in the Libertarian Party in the ealy 90s.

Continue to study and read.

Dems - socialists.

Repubs - socialist-lite.

Get rid of the first group and then work to remove the second.

Haven't eaten beef in over twenty yrs. Thanks for the burger offer though.

pntbutterandjelly

@ "Contango"; Plutocracy is not bounded by political parties and I never said it wss. And...your assessment vainly tries to pinpoint "the problem" into one small (and erroneous at that) segment. Democracy demands a plurality of its citizens, not of it's leadership. To combat Plutocracy...the best (and easiest) method to accomplished is by involvement (ie. activism). Activism is not only our civil right but far more importantly our civil responsibility to ensure a balance of power. To point out one microscopic observation such as yours is a demonstration of the same "divisionary thoughts" I spoke of before. However...I see where you did not contest my thoughts on Plutocracy. "If you too feel we are losing our opportunity at self-governance/self-control...then you and I are in agreement at that level which lends itself to some form of additional dialogue." "That dialogue cannot and must not be "politically sensitive" or else we have lost before we have ever begun." "Unless, of course, you are not motivated to have an honest, open and diverse discussion." "If that is your position...then I have no further comments for you." (sorry)
FYI: I am a true Independent and a Centrist. It is the only way I can find to keep everything in balance whether in my life or within the political spectrum. There is ample "blame" on sides of the equation.

Contango

Re: "..I see where you did not contest my thoughts on Plutocracy."

With whatever terms or however you wish to define the nomenklatura (Political ruling class).

I would use either the terms corporatism or fascism to largely describe our current economic system.

See: The Iron Triangle of -

Bureaucrats, special interests and politicos.

pntbutterandjelly

@ "Contango": Ah HA! We agree again! (How sweet it is!) I too don't have a finite "ism" by which to attempt to corral a term or phrase that we are discussing and watching unfold. It may well be a new form never before thrust upon humanity. However...it is NOT Democracy. (See how easy it can be to agree!), (Now we are making progress.)
Thank you,
PB&J

Contango

Re: "it is NOT Democracy."

True. It was founded as a representative republic.

Limited govt. and free markets work for me.

To use a sports analogy:

Return the govt. to being strictly a referee and let the players and the coaches play the game.

IMO, ain’t nothin’ gonna change until ‘possibly’ after the sovereign debt crisis, which is currently in the process of being formulated by central banks worldwide.

Peninsula Pundit

You do realize, of course, that 'Limited' Govt and 'Free' Markets' is 'Corporatism' defined.
To return to the sports analogy, it would be more like:
Tie the referee up and have the teams join forces and rob the spectators.
Out of curiosity, what course of action do you believe individuals should take, once the sovereign debt crisis arrives?

Contango

Re: "'Corporatism' defined."

Absurd.

Sovereign debt crisis prep:

Diversification of assets as best as possible - real estate, gold, cash, stocks, bonds, et. al.

If you think that it'll be a Mad Max event: gold, grub and guns.

Peninsula Pundit

Judging by the rise in gold prices, guns and MRE /survivalist sales, it looks like the popular opinion is your latter scenario.

wetsu

Although a bit chippy at times, this is the best thread I have seen on the Register web site in a while. Keep your feet on the pedal, guys, just don't kill each other.

Contango

Re: "popular opinion,"

Doubtful. Might read it as counterintuitive.

Like during the CA gold rush in 1849; the REAL money was made selling the shovels, picks, clothing, et. al to the prospectors.

Coram Deo

The United States is the #1 EXPORTER of propane in the world. So why the shortage? From the Motley Fool article below propane is being shipped in massive quantities to Asia (mostly Japan), Norway and South America (mostly Brazil). They want to crack the Chinese market and probably will. This crisis has touched our family as we heat by propane and our cost per gallon has doubled. We are currently looking in to alternative heat sources as a supplement like a wood stove add-on. The EPA as I type is trying to outlaw the use of wood stoves. The perfect storm seems to be hitting the poor and middle class and it's not hard to see a global agenda here. I don't have an answer for this because I loathe burdensome regulation but it seems to me if we are the #1 EXPORTER of propane then there should be enough propane set aside in each state that this unprecedented shortage would not happen again. Who is watching the watchers?

http://www.fool.com/investing/ge...

Contango

Suppliers were expected to be prescient regarding this unforeseen amount of cold weather?

Yea, let's put the govt. in charge. lol

"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”

- Milton Friedman

Coram Deo

I don't expect suppliers to predict the weather, however I think they knew a lot sooner about the shortage and could have warned us a bit more earlier than they did. We were sitting on less than 15% tank during the days of subzero windchills of -20 and -30 below with the only explanation from our supplier that they were not sure if they could even supply us (we were told to conserve which we did) and no other supplier would sell any propane unless you were their customer. I'm a limited government, free market type of person but my only recourse was to contact our District Rep for help. Sitting in a cold house is a great motivator. Yes, no way to predict the harsh winter (but hey it's Ohio), a pipeline down for maintenance...okay, got that. Farmers needed more propane to dry crops? Maybe. But if we are the #1 propane exporter in the world how do we domestically have this kind of shortage? I follow your comments often and agree with you probably 90% of the time. We agree on more issues than not but is there not one mechanism in place within the propane industry (or government)that monitors supply levels for a safe winter? Just asking. We've used propane for over 30 years and have never run into such a dilemma. Anything you can share would be appreciated.

Contango

Re: "I think they knew a lot sooner about the shortage and could have warned us a bit more earlier than they did."

Speculative. You don't know.

Where was the DOE?

Aren't those highly paid bureaucrat 'geniuses' supposed to be on top of stuff like this?

pntbutterandjelly

@ Coram Deo; I feel your pain, hear your angst and applaud your thought processes. "We" (you and I and the voters of what's left of our Democracy) are the watchers. And...too often we are "just watching". (Know what I mean?)

pntbutterandjelly

A "Global Economy" is (and will be)a natural progression and evolution of humanity (like it or not). It is how tribes banded together to form colonies and colonies banded together to become city states and city states morphed into countries (natural progression). A Global economy is NOT the issue. The issue is, "Who and how many will have a say in its policies and thus the control." A Global Economy gives untold opportunities to those who are _ell-bent for control of the masses in lieu of the masses' needs. Global Economy gives rise to Global Plutocracy. "That" will be "New World Order".

Contango

Re: "Global Economy gives rise to Global Plutocracy. 'That' will be 'New World Order'."

IMO, you're giving bureaucrats the unnecessary benefit of rational thought, when incompetency will do just as well.

“Never attribute to malice that which is adequately explained by stupidity.”

- Robert J. Hanlon

Peninsula Pundit

You just don't appear to be getting what PB&J is saying.
It's not bureaucrats,guy, it is corporate officers.
I'm really having a hard time believing you are as thick as you write.
I do not know PB&J, but what he is saying is as plain as the nose on your face, once you open your eyes.

Peninsula Pundit

PS: You may as well attribute your closing quote to yourself.
Hanlon stole it from others, including Heinlein, whom I originally thought you were quoting.
http://en.wikiquote.org/wiki/Rob...

Contango

Re: "closing quote,"

Or, Goethe. Thanks.

Knew it wasn't original with him.

Regardless, the sentiment is what is important.

"Beware, lest you lose the substance by grasping at the shadow."

- Aesop

Contango

Re: "It's not bureaucrats,guy,"

Again: Why do the majority of the wealthiest counties in the U.S. surround DC?

Peninsula Pundit

That lobbying money has to be spent somewhere.
You can't spend it all on improvements to your home or vacation chalet.
That has been the downfall of many a politico on both sides of the aisle.

Contango

Re: "That lobbying money has to be spent somewhere."

They ain't all U.S. corp. dollars. Unions, not-for-profits, foreign, et. al.

Also, tax dollars.

Those bureaucrats don't work for free.

The Big Dog's back

pooh, go back and sit in the corner.

pntbutterandjelly

C U all later,
PB&J

pntbutterandjelly

Quote: "To ignore the obvious is to veil the truth." -PB&J (2-17-14)

Dr. Information

Wonder if the same genius's who don't understand the shortage are as outraged with the salt shortage nearly everywhere.

Peninsula Pundit

I'm even more enthralled that you believe that is a 'natural' shortage as well.
Salt pours off of a 4 foot wide conveyor belt 24/7/365 from not one, but two salt mines within 50 miles of this area.
Salt is used on roads what? 3-5 months a year?
And there's a shortage?
You figure it out, you're so smart.

Dr. Information

Im not the one complaining Einstein.

Peninsula Pundit

Not enough sense to do so, I surmise.

Dr. Information

Just watch a 5 minute segment on NBC 2 night ago. The salt isn't coming out fast enough out of the mines to keep up. The stuff they had on backup, all gone and gone quick. Again, keep ranting about things you do not know about.

tk

I don't know how many of you depend on propane for your heating and cooking but we do and it makes me very mad that we can't get the propane we have prepaid for because the company can sell it at inflated prices to those who didn't prepay.

pntbutterandjelly

@ tk: Oh yeah and then charge you a delivery fee for a partial fill to be followed with more partial refills and more delivery fees. Eventually...the cheaper (pre-paid) propane will run out and then they GOTCHA. "Manipulated Monopolies" I guess they can always fall back to "It's not our faults" (but they make a lot of extra profits from our misery) read; no accountability. Sounds like the banking industry to me.
Whatever happened to fiduciary and moral responsibility?

Contango

Re: "no accountability."

When the Washington kleptocrats no longer need to keep their hands in their own pockets in order to keep warm, maybe they'll hold investigative hearings into the cause and discover that there was no conspiracy and that it was just a confluence of unexpected events.

Believe it or not, sh*t just sometimes happens.

KURTje

He he. I fired Sunrise Co-op last year. Low propane usage fee. Take your tank away.