A long cold snap keeps running up, the demand for energy and one popular fuel in the rural areas is becoming increasingly hard to find. Officials throughout the Midwest and Northeast are declaring emergencies because of a shortage of propane.
Indiana Governor Mike Pence has issued an emergency proclamation waiving statutes that limit the number of hours for propane transporters to help suppliers meet the demands of customers. The order runs through the end of the month.
“As fellow Hoosier feel the impact of recent propane shortages and near-record low temperatures, I urge the people of Indiana to conserve their own propane supply as much as possible, to reach out to their neighbors, and look out for each other,” said Pence. “With the shortage and weather conditions expected to continue, I also urge the federal government to exhaust all possible means to assist and help alleviate the supply issues currently faced across the Midwest.”
The shortage is being felt in Daviess County. “We can’t get any product,” said Steve Myers with Myers LP Gas.
“About 80 percent of our supply comes from plants in Princeton and Robinson, Illinois. It’s all dried up. Where we used to be able to get five to six loads, now we are lucky to get one.”
Experts say the shortage is the result of a trio of events. Early this fall, propane producers began exporting the fuel to other countries driving stocks down to their lowest levels since 1996. Then came a large corn crop that was harvested late and put up wet. Farmers began buying large amounts of propane to dry down their corn and supplies fell to the lowest level since 1991.
Now, large parts of the country are in an extended cold snap that is one of the worst the country has seen in 20 years. The demand for propane has continued to rise at a time when suppliers can’t keep up. “You take all of those things together now and it’s created a perfect storm for a propane shortage,” said Myers. “We’re doing a lot of short drops now. We can only let out a little at a time.”
Nationally about 5 percent of homes heat with propane, but the shortage is more acute in Daviess County. “It is basically used wherever natural gas lines don’t run, but in Daviess County we have a lot of Amish customers,” said Myers. “They use propane the same way the rest of us use electricity.”
The shortage is also hitting livestock operators in the area. Many of the hog and turkey operations rely on propane to keep their animals warm and growing. “We’ve had people contact us who have been cut off by their normal suppliers saying they will pay anything and I have to turn them down,” said Myers. “There is some panic growing out there. I just can’t help them.”
Propane dealers in the area are reaching out to try and get more product but it can be frustrating. “I sent three tankers to a terminal in Chicago last week and when they left Washington there was propane available,” said Myers. “By the time they got there and sat in line, it ran out and they came back empty. The closest available propane may be in Mississippi or Kansas. We might even have to go to Texas for it. At that distance freight costs just eat you up.”
Since the shortage hit the price for propane has skyrocketed. In one day the price jumped $2.25 per gallon raising the price to $6 a gallon, an increase of 500 percent since the fall.
“We’re honoring our contracts and eating a lot of that increased cost,” said Myers. “Those without contracts we’re just passing the increased cost on to them. This is just a tough time for the propane business.”
In the short term dealers are telling their customers to conserve and try not to buy more propane than they need. Another possible solution would be to suspend exports, but the biggest help would be for the weather to turn warm.
“Time is running out,” said Myers. “Once this weather comes out of this cold snap this problem will be over.”
Governor Pence has taken a small but symbolic step toward easing the propane crunch.
He has ordered all of the Indiana Department of Transportation vehicles that run on propane to switch over to diesel fuel for the next six weeks.
“My administration has been in close communication with the propane industry and will continue to monitor developments and take all actions available to help Hoosiers make it through this crisis,” said Pence.