The Washington Times-Herald

February 5, 2014

Propane problems consulted by state

By Mike Grant Times Herald
The Washington Times-Herald

---- — The Indiana Department of Homeland Security is reaching out to local officials concerning the propane shortage that is plaguing the Midwest.

“They briefed us on what the state is doing and at the same time they had some questions for us,” said Paul Goss with the Daviess County Emergency Management Agency.

One of the concerns of the state was whether there are nursing homes or schools in the area that are heated by propane. “To the best of our knowledge we don’t have any of those in Daviess County,” said Goss.

The briefing came after several elected state and federal officials made calls for conservation and a relaxation of rules for transporting the gas. Industry officials call the shortage the result of a perfect storm. Increases in exports combined with a large corn crop that saw farmers use more for drying grain and an extended cold winter have dried up supplies and caused prices to spike. “The prices have begun to moderate some,” said Steve Myers with Myers’ L.P. Gas. “It still is considerably higher than it was at the beginning of the summer.”

Both Gov. Mike Pence and the Indiana Farm Bureau called for farmers who had propane left over from drying their grain this fall to contact their supplier and get it back into the system. “I haven’t had anyone contact us about doing that,” said Myers. “That’s one of those things that sounds pretty good, but I’m not certain how we’d do it. It’s a lot of work to pump out a tank and bring it back in.”

Still there may be some propane shuffling going on in the farm community. “There may be some guys with grain operations making deals with livestock operators,” said Myers. “I’ve also heard there may be some farmers moving tanks around trying to heat their turkey barns.”

Even with temperatures breaking out of the single digits for a few days there is still a lot of demand for the fuel that is used by about 10 percent of all Indiana households. “There’s still a lot of people burning a lot of propane,” said Myers.

Indiana is not alone in facing the propane shortage. Governor Pence has joined fellow governors from the Midwest Governors Association in sending a letter to President Obama asking for immediate assistance to address the propane supply shortage.

“Hoosiers continue to face severe propane shortages and unprecedented winter weather, with no relief in sight,” said Pence. “In recent weeks, the State of Indiana has acted decisively to alleviate the impact of this crisis on the people of this state and now encourages the federal government to take every possible action to relieve the supply shortages and ensure families, farmers and business owners can heat their homes, barns and businesses.”

The governors call for the entire Administration, including the U.S. Department of Energy, the U.S. Department of Transportation, the Federal Emergency Management Agency, the Small Business Administration, the Federal Energy Regulatory Commission, and any other relevant agencies to take any possible steps to increase propane supplies through any means of transport.

While state and federal officials were busy calling for changes by consumers and transporters they were quiet about moves that producers could make. Exports on propane in the last five years have increased from 5 to 20 percent of what is produced. “If they would suspend exports, that would help the situation greatly,” said Myers. “I don’t know. Maybe this is something where the federal government needs to step in. I know we have a strategic oil reserve. Maybe we need the same thing for propane.”

Myers contends the propane industry might be a victim of its own success.

“They did what they were supposed to do and that’s go out and sell it,” he said. “They just didn’t plan for this level of consumption and the dealers are the ones taking the hits.”