Several factors lead to skyrocketing propane prices
The recent shortage of propane in Minnesota and across the country means the danger of extremely cold temperatures isn’t just outdoors.
Gov. Mark Dayton declared a peacetime state of emergency because of high propane prices.
Steve Sargeant, general manager at Lakes Gas, said many factors led to the propane shortage. Many of those factors weren’t local, but nationwide.
For one, more propane was used this year than normal for crop drying. Sargeant said Lakes Gas will sell more propane for crop drying than it will sell for heating in a given month.
“Couple that with the fact that northern Minnesota, literally at Thanksgiving going forward, has never warmed up,” he said.
It’s not just Minnesota, either — the entire nation has experienced cold temperatures. More people are using propane than in a normal year.
Another factor is the transport of the propane. A lot of the gas comes by rail from Canada, and areas there have seen such cold temperatures that trains have been unable to run.
Additionally, the demand for oil has meant that train cars have been used more and more for oil instead propane. It’s one car of propane to 300 of oil, Sargeant said.
“So everything’s kind of stacking up on each other. It all seemed to pile up in a 60-day period. We saw an incredible drop in usable volumes in the U.S.,” Sargeant said.
Prices have in some cases more than doubled. Before the shortage the propane had cost around $2 a gallon, but that price has risen to more than $5 a gallon at times.
“The price is changing quite a bit. It went well over $5 a gallon a week ago, dropped back down and shot back up,” Sargeant said.
The only good news is that the price is pulling fuels into the U.S. Many companies are willing to pay whatever it takes to get gas.
Sargeant said that in 50 years, Lakes Gas has never seen a propane issue this extreme.
Dave DeLawyer, general manager of Northstar Gas Coop, had similar remarks. He’s been in the business 38 years and has never seen a year like this. He heard of companies selling propane for $6-7 a gallon, though Northstar’s prices have not gotten that high.
DeLawyer said the weather is the biggest challenge right now.
“We’re hoping for some reprieve in that regard,” he said. “When it stays cold it’s hard to rebuild inventories.”
Northstar is a Cenex company. It’s supply comes from a terminal in Conway, Kansas.
“There was fear that could run out… that supplies most of the Midwest.”
Additionally, a pipeline from Canada that was supplying Cenex with propane went down for several weeks.
“Lots of things came together at once,” DeLawyer said.
Both Sargeant and Delawyer hope that prices will even out and fall by the end of February, when the weather should improve—if not in Minnesota, then in in other parts of the country.
In the meantime, the U.S. Department of Health and Human Services announced it’s made available an additional $15.8 million for the Low Income Home Energy Assistance Program (LIHEAP). The state has opened a hotline for Minnesotans with propane problems or questions. The hotline is open 9 a.m. to 4:30 p.m., Monday through Friday, at 651-297-1304 or 1-800-657-3504.
Doug Neville, spokesperson for the department of public safety, said that residents are calling the hotline to find out where to locate propane and concerns over how to afford it. The hotline can provide information on what resources are available.
Lutheran Social Services (LSS) provides energy assistance to Crow Wing County residents who qualify. In a phone recording, LSS said it is currently processing applications that were received in November, and due to the high volume of applications, it will not respond to phone calls asking about the status of an application.
LSS can be reached at 218-829-5000 or 1-800-829-5902.
Crow Wing County can also provide emergency energy assistance. According to the county’s website, emergency assistance is for families with children under the age of 18 who are in danger of having a utility shut off. It can be used once in a 12-month period.
Cass County residents, according to Cass County Health, Human and Veteran Services, are instructed to call the state hotline for energy assistance information.
The Crow Wing County Sheriff recommends that residents check on their neighbors and friends, conserve energy as much as possible, be vigilant and check the household propane tank. When using alternative heat sources, do so safely, and beware of carbon monoxide dangers.