Spring/Summer 2014 Newsletter Highlight

WHAT HAPPENED TO PROPANE THIS WINTER?

Propane supply shortages and high propane prices this winter created a nightmare for both propane retailers and propane customers.  There were several factors that created unusually high demand for propane and put upward pressure on price.

RECORD COLD – Demand for heating fuel was 10% higher than it was in 2012-2013 winter season and 15% higher than it was in the winter of 2011-2012.

UNUSUALLY WET HARVEST SEASON – After a record grain harvest in the fall of 2013, farmers used a lot of propane to dry the crop – 5 times as much as they used in 2012.  Extraordinary demand for propane on the farm reduced propane inventories in the Midwest, just as the heating season got under way.

Our customer area did not use much dryer gas; however Northern Iowa and our neighboring Northern States used propane from our market area to dry their corn.

FEWER TRANSPORTATION OPTIONS – A major propane delivery pipeline was closed for maintenance most of December.  Fewer railcars are carrying propane because of increased demand to carry other fuels.  The capacity of our nation’s existing transportation infrastructure (pipelines, rail and transports) has been strained by demand.  Our company actually had to haul gas from as far away as Texas in order to insure supply.

HIGH WHOLESALE PRICES – High demand for propane and rising transportation costs have caused the wholesale price of propane to go up.  Your propane provider is forced to pay a higher price for the fuel delivered to your home.

Portions of this article were provided by the NPGA (National Propane Gas Association) & Propane Education and Research Council

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