The Washington Times-Herald

January 31, 2014

State, federal officials jump into propane shortage

By Mike Grant Times Herald
The Washington Times-Herald

---- — The propane shortage in the Midwest and along the East Coast is drawing calls for action from both Indiana's congressional delegation and from state leaders.

An extended cold snap, coupled with some of the lowest stockpiles of the fuel in 20 years have combined to leave propane dealers scrambling for supplies and customers conserving and cutting corners. For the third time, Governor Mike Pence has waived transport rules. The move now allows the Indiana Department of Revenue to expedite permit applications and waive any fees for overweight and oversize loads for propane suppliers. The rules will now stay in place through March 31.

"Hoosier homeowners, businesses and the farming community are facing propane shortages and unrelenting temperatures, and the State continues to exhaust all possible options to alleviate the impact of this crisis," said Pence. "As in the past, the compassionate nature of Hoosiers is evident, and I urge all to be mindful of their propane usage, and I ask those who might have a surplus to help their neighbors in need."

The governor's call mirrors one issued earlier in the week by the Indiana Farm Bureau. The organization encouraged grain farmers with surplus propane to contact neighbors with livestock operations to see if they need additional fuel.

Hoosiers who may have a surplus are being asked to contact their local supplier about getting the fuel back into the chain.

State officials estimate ten percent of Indiana residents heat their homes with propane. Because Daviess County has a large Amish population the numbers are estimated to be even higher. Daviess County officials say they are scheduled to be briefed by state leaders soon on the propane issue.

The state has also released $5 million to the Indiana Housing and Community Development Authority's Low Income Energy Assistance program. The action raises the amount of crisis benefits for low income Hoosiers from $400 to $500 through the end of March. "We are increasing energy assistance dollars available to low income Hoosiers facing escalating propane use," said Lt. Governor Sue Ellspermann.

The propane shortage has been described as a perfect storm. Suppliers say exports in the last five years have gone from 5 to 20 percent of the product produced. Large amounts were also used to dry down a bumper corn crop in the fall. That has been followed by one of the coldest Januarys since 1980.

"It is likely that January 2014 will be among the 10 percent of coldest Januaries," said Ball State severe weather expert David Call. "None of those coldest Januaries have occurred in the last 25 years, so this month is considerably colder than what we have experienced in recent memory."

Area dealers say their normal suppliers in Princeton and Robinson, Illinois have virtually dried up. Around the state consumers are seeing propane costs increasing by 400 percent. An amendment to a bill in the Indiana Senate is designed to try and provide some relief.

"It eliminates the sales tax from Jan. 1 to April 1 on any propane bought for more than $2.50 per gallon," said state Sen. John Waterman, who was one of three co-sponsors for the measure. "We feel this is one thing the state can do to relieve some of that pressure. On a 500-gallon propane tank Hoosiers can expect to save $100 to $150 from the sales tax amendment. People need help. With the job market and the price of food going up, this was something we could do legislatively to help with something that was unexpected."

Indiana's congressional delegation have also added its voice to those looking for some propane relief. All of the members sent a letter to U.S. Department of Transportation Secretary Anthony Foxx requesting an emergency extension to exempt motor carriers from hours of service limitations to enable the delivery of much-needed propane and home heating fuels during the severe winter weather. The group, including 8th District Congressman Larry Bucshon, wrote: "We have heard from many distributors and customers in Indiana who have been directly impacted by this shortage. As additional winter storms and unusually low temperatures continue to impact the Hoosier state, the situation is becoming critical."

Indiana Senator Dan Coats also signed the letter and is encouraging Indiana residents to take conservation measures. "For Hoosier households that rely on propane, this is a serious time of year," Coats said. "Historically low temperatures in December and January have aggravated the current shortage. Pipeline and distribution disruptions have further limited delivery to the Midwest. I urge all Hoosiers to take this situation seriously and take adequate precautions to ensure the safety of their families."

Around the Midwest there have also been growing calls for investigations into the shortage and allegations of price gouging have begun to surface as wholesale costs have sometimes doubled in a single day and dealers are facing increasing costs to transport the fuel, sometimes from points as far away as Texas. The Indiana Attorney General says people who feel they are victims of price gouging can contact the Consumer Hotline at 1-866-241-9753.

The Associated Press contributed to this story.