Propane, drying corn, and cold winter
RB Energy describes the problems with commercial and residential propane markets:
We’ve been talking a lot over the past year about the need for increasing exports to balance the U.S propane market as growth in production from gas processing plants outruns domestic demand. U.S. propane production from gas processing has increased by over 100 Mb/d since January 2013, and there’s lots more to come. For the first time U.S. propane exports exceeded 400 Mb/d in October 2013 thanks to growing U.S supply and infrastructure developments including dock expansions by Enterprise and Targa. But just after exports ramped up, the propane market was hit by a couple of wild cards – a late and very heavy crop drying season and a series of record cold temperature events. In today’s blog, we continue our series covering the record setting 2014 NGL markets.
but this year Midwest propane suppliers were hit particularly hard by a late and heavy crop drying season followed directly by much colder temperatures. For an in-depth look at these demand anomalies and the impact on domestic markets see A Perfect Storm – Polar Vortex Turns Propane and other NGL Markets Upside Down. For more on propane demand and crop drying see Farmer Dries Corn and I Do Care; Propane Corn Drying, Shortages and the Cochin Reversal – Part 2 . While seasonality in propane demand is normal, this winter has been anything but normal. The 2013 crop drying season and the 2013-14 Polar Vortex weather pattern are both extremes.
As a family reliant on propane here are some common sense solutions to lessen the impacts of these natural market trends.
1) If you lease your tank, BUY IT. Included in your already premium price for fuels is the lease payment for the tank. You are paying the premium prices because you are locked to your supplier.
2) Once you own your tank shop around. Let competition work for you instead of against.
3) Shop for propane in the late Summer when prices and demand are down.
4) Once you have found a reasonable supplier sign annual contracts. If they offer a lengthier contract consider it.
These simple acts have lowered my per gallon cost of propane by 1/2 to 1/3. BTW, the cost of buying my tank was recovered in the 1st year. Each year since has been a bonus.
Finally, NEGOTIATE, NEGOTIATE, NEGOTIATE!
maybe the Dakotas wil take CoRev’s advice next year…
Propane shortage devastates Dakotas reservation – A nationwide propane shortage has hit an American Indian reservation that straddles the Dakotas’ border particularly hard. A more than doubling of the fuel’s cost has crippled efforts to stay warm — and alive….Many residents live in mobile homes, some with ill-fitting doors, others with boards tacked up where the windows should be, or deteriorating roofs that leak much-needed warmth. The propane crisis at the reservation can be summed up in the story of Debbie Dogskin, a healthy 61-year-old woman who died this week while house-sitting for a friend in a rundown mobile home with an empty propane tank. ; “We think she just fell asleep and died,” …Sheriff Frank Landeis said he believes Dogskin froze to death because it was as cold inside the home as out that morning — 1 degree below zero.
RJS, why the snark?