Propane concerns are heating up in many parts of the country as bitter cold temperatures are boosting demand with a tight supply.
“Propane supplies are much lower than they have been in years past — 30 to 40% of normal. Propane dealers are prioritizing the need for propane,” said Dale Arnold, Ohio Farm Bureau’s director of energy policy. “Work with your supplier well in advance before you are down to 30% below what you need in your tank.”
The per gallon price for propane jumped up to nearly $5 in late January from less than $2 earlier in the month. This is a major source of concern for homeowners facing staggering heating bills, but it can be the difference between life and death on some livestock operations that depend on propane to heat facilities.
“Many hog farms need propane now to keep little pigs from freezing,” said Dick Isler, executive vice president of the Ohio Pork Council.
The situation has resulted in an emergency declaration in Ohio by Governor John Kasich, making it easier for motor carriers and drivers to transport propane and heating oil. State and federal officials issued the emergency declaration to prevent shortages and interruptions in the availability and/or delivery of propane and other home heating fuels. Besides Ohio, the declaration is for Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska and Wisconsin. It is in effect for the duration of the emergency or until Feb. 11.
In Ohio, motor carriers and drivers transporting propane and heating oil to address transportation issues arising from severe weather, heavy snowfall and difficult driving conditions are exempt from compliance with Rule 4901:2-5-02 of the Ohio Administrative Code and 49 CFR Part 395. Any such provision of a state statute, order or rule pertaining to the hours-of-service is suspended. The order applies only to propane and heating oil; no other petroleum products are covered by the exemption and suspension.
The National Propane Gas Association indicated that Minnesota, Missouri and Wisconsin have been particularly hard hit, but spot shortages have occurred throughout the Midwest and in the Northeast and Southeast. Because most customers receive their propane by truck, the U.S. Department of Transportation issued emergency orders for 10 Midwestern and 12 Northeastern states, suspending the limits on the amount of time truck drivers can spend on the road.
While U.S. propane production has increased in recent years, the higher supplies pushed prices down and made exports more lucrative. The rise in propane exports, which decreased domestic supplies, coupled with weather-related supply disruptions, long periods of unusually low temperatures in numerous parts of the country and even lower supplies in the upper Midwest that resulted from drying a large, relatively late 2013 corn harvest helped lead to the current situation, according to analysts. Even if the livestock producers can get the propane they, it seems that they will be paying a steep premium for it.