Propane shortage is worst ever seen by local business and state officials

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Nick Crow
Friday, January 24, 2014

JANESVILLE — A combination of cold weather and a wet fall harvest have created a propane shortage and rising propane prices throughout the Midwest, including Wisconsin.

Local propane vendors say the problem isn't going to let up anytime soon.

“The average customer in this area used to pay about $400 to fill 275 gallons of a 500 gallon tank,” said John Arndt, president of Milton Propane. “Now they are paying about $1,375 to fill it. You can see how that impacts people's lives.”

Arndt said his company is not filling residential tanks to more than 40 percent and is not accepting any new customers. Those decisions will help the company keep propane in stock, but it will require more frequent trips to customer homes, Arndt said.

“We've only gotten 17 loads (of propane) out of Janesville as opposed to the 30 we normally get,” Arndt said, referring to his company's latest trip to the city's propane terminal. “Product is limited. You really feel for customers who have been with us as many as 50 years.”

Arndt said the situation is the most serious he has seen in his 30 years on the job.

“This is getting too expensive for people who didn't plan to have this dropped on them in the middle of winter,” Arndt said.

The U.S. Energy Information Administration indicates demand has outpaced supply and calls propane supplies “extremely tight.”

They attribute this to the onset of cold weather in past weeks coupled with high demand for drying wet crops in November.

Brandon Scholz, managing director for the Wisconsin Propane Gas Association, said that he has talked with association members statewide and has yet to find anyone who remembers a worse propane situation.

“It's a crisis from all aspects,” Scholz said. “It's a situation where demand is at an all-time high, and there is no end in sight.”

In November, propane inventories in the Midwest dropped by more than 2 million barrels, the largest stock draw in any November since 1993, according to the Energy Information Administration.

“This is not a Wisconsin-centric problem,” Scholz said. “It affects multiple states and the entire Midwest region.”

Scholz said propane usage is 12 percent above what's average for this time of year.

Gov. Scott Walker has issued an executive order exempting propane truck drivers from hours-of-service rules to help them keep pace with demand.

In a radio address Thursday, Walker said roughly 250,000 people in Wisconsin use propane to heat their homes and businesses.

“I've issued executive orders that allow for truckers that deliver propane to Wisconsin to drive longer hours—while doing so safely—so you have fuel you need to heat your home,” Walker said. “Our state Department of Transportation has authorized a weight limit relief in order for vehicles transporting energy in the state to increase the amount of propane carried in a single trip.”

Inventories dropped by 1.5 million barrels during the week of Dec. 6 and an addition 1.2 million barrels the week of Jan. 3, according to the Energy Information Administration. The Midwest has dropped a total of 12.8 million barrels in since Oct. 11, compared with a five-year average of 7.3 million barrels.

“There are just things that you can't control,” Scholz said. “Unless we get a week of 45 degree weather, I can't see a drop in demand. Even if that happened, supply would have to catch up. This is a deeper industry issue that has to be resolved.”

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