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Lakes Gas Blog

Propane Shortage May End Soon

Falling propane prices may signal an end to the propane shortage that began in fall 2013 and left suppliers scrambling to provide the fuel to their customers.

Lakes Gas Forest Lake, Wisconsin General Manager Steve Sargeant was recently interviewed for a news segment about the shortage for WLUK TV 11. 

During the interview he said prices, which had been $4.49 a gallon in late January, seem to be going down. He said they’ve dropped about 20 cents a week during the past month, and are now about $2.50 a gallon in the area near his store.

During the shortage, Lakes Gas halted sales to new customers and focused on serving existing customers. To prepare for situations like this in the future, Lakes Gas is increasing propane storage capacity underground and in the field.

“I guess you come out of it saying, ‘What can we do to minimize anything like that in the future,” Sargeant said.

Lakes Gas recommends that customers fill their tanks this summer to ensure they are prepared for the winter should another shortage occur.

“The customer with a full tank is in a far better position than the customer who is who is waiting until the winter to take a delivery,” he said.

 

The Propane Shortage: Contributing Factors

Minnesota and Wisconsin residents are again struggling with propane shortages due to the unusually harsh winter weather. It’s the second shortage in six months, and it has forced suppliers like Lakes Gas to limit refill amounts to current customers and halt sales to new customers to keep up with demand.

The shortages, which began in the fall of 2013, caused Purdue University Extension to develop a website with conservation tips for struggling consumers in the Minnesota and Wisconsin regions. Propane suppliers and users alike were scrambling to adapt and many were understandably upset.

So, how did the shortage occur?

A combination of factors – many unforeseen- contributed to the shortages. Here’s a rundown as explained by a recent news article.

Wet weather

More than 660,000 farmers depend on propane in their farming operations.  An unusually wet harvest season in 2013 led to a surge in propane use by farmers who had to dry their crops to in order to prevent spoilage. The crops were also larger than normal and the harvest season earlier, which contributed to more propane use for drying.

Early winter

Temperatures were incredibly cold this year,-50 degrees in some areas of Minnesota and Wisconsin. Added to that, colder weather hit sooner than normal. That caused homeowners to use more propane to heat their homes than during normal winter seasons. Record snowfalls also slowed down ground transportation of propane gas.

Pipeline shutdown

A prominent propane pipeline running from Canada to Minnesota and supplying 40 percent of Minnesota’s propane was shut down for three weeks of maintenance in November and December 2013. The Cochin Pipeline shutdown exacerbated the propane shortage, slowing down shipment of the gas to areas that needed it.

The pipeline will shut down for propane use permanently in April, and propane suppliers throughout the Minnesota and Wisconsin region have been preparing for that change for the last year.  

Increased exporting

U.S. exports of propane gas increased significantly during the shortage, to 408,000 barrels per day in October, from 168,000 in January, according to the U.S. Energy Information Administration.

Propane suppliers and the National Propane Gas Association are working to address the issue and increase supplies. Keep checking back with Lakes Gas for more updates.

 

How to Save on Energy with Propane this Winter

Propane can be a great cost-effective way to heat your home in the winter. Heating with propane tends to be cheaper than heating with electricity, and propane heat systems tend to last about 30 percent longer than electric heat pumps, and could pay for themselves in a few years, according to the Propane Education and Resource Council. And following a few simple steps can help you save even more money with propane during cold weather.

Propane can be a great cost-effective way to heat your home in the winter. Heating with propane tends to be cheaper than heating with electricity, and propane heat systems tend to last about 30 percent longer than electric heat pumps, and could pay for themselves in a few years, according to the Propane Education and Resource Council. And following a few simple steps can help you save even more money with propane during cold weather. 
 
Here are a few tips:
  1. Change your furnace filter regularly. It is recommended filters be changed every month. Clean filters increase efficiency and airflow, and can help reduce dust and other allergens in your home, so you don’t need to plug in your air purifier.
  2. If you have a tank-style water heater, drain it every six months to remove mineral deposits and increase its efficiency. 
  3. Use kitchen, bath and other ventilating fans carefully. In as little as an hour, they can pull out all the air you’ve just spent money to warm. Turn them off as soon as you’re done using them.  
  4. Make sure your vents are not blocked. Arrange furniture and draperies so they do not block vents or baseboard units. Unobstructed vents create good airflow, which will heat rooms using less energy.
  5. Have your heating system inspected and serviced every year by a qualified technician. A well maintained heating system is more efficient and will save you money.
  6. Invest in a furnace thermostat timer. You can set it to lower your homes temperature while you’re at work. Even a drop of 7 degrees can save you 10 percent on your heating bill every year. There’s no need to spend money to make an empty house toasty warm.
  7. Keep your warm air inside. Use caulk and weather strips on windows, doors and ducts to protect against drafts. You’ll keep the cold outside and the heat you paid for inside.  
  8. Consider switching to a propane water heater. They can save you up to one-third on your energy bills over time, and they recover hot water twice as fast as electric water heaters.
Taking a little time to make your surroundings more energy efficient can pay off in huge energy savings down the road. Contact Lakes Gas for more tips on saving energy with propane. 
 
 
 

Propane Industry Addresses Pipeline Issue

Have questions about how propane shipments will be effected when a major pipeline closes in April? Read this article from the Star tribune for more.

According to the article, the loss of the Cochin pipeline, which carries 40 percent of Minnesota’s propane, is leaving the propane industry scrambling to find a way to get the fuel to more than 230,000 homes, farms and businesses that depend on it as their main source of fuel.

Pipeline operator Kinder Morgan plans to stop propane shipments from Canada in April on the 1,900-mile pipeline. The pipeline passes through Minnesota and has delivered propane to terminals in Benson and the Mankato area for 35 years. Because Canada has produced less propane to ship down the pipeline in recent years, owners are reversing its direction and using it to ship petroleum condensate for use in Canada’s booming oil industry.

To combat the issue, propane suppliers are building or converting fuel terminals to accept deliveries by train instead of by pipeline, expanding propane storage, leasing more tankers and adapting other ways to manage a more-complicated supply chain. In November, 40 propane executives met with Minnesota Gov Mark Dayton to discuss how the private sector plans to respond to the problem.

Minnesota Commerce Commissioner Mike Rothman, who attended the meeting, called the problem a “high-priority issue.”

With the pipeline change, many propane haulers are looking to trucks and trains to pick up more of the hauling duties. Trains, however, come with delays the pipeline did not.

“It won’t be a cakewalk to get through the winter, but I think the industry will be geared up and ready for it,” Roger Leider, executive director of the Minnesota Propane Association said.

 

Wisconsin Governor Scott Walker Declares a State of Emergency

Yesterday we posted the Minnesota Propane Association's official statement regarding the propane gas industry crisis, and today we're sharing the Wisconsin Propane Gas Association's press release regarding Wisconsin's Governor Scott Walker and his declaration of a State of Emergency.

Governor Scott Walker has declared a State of Emergency in response to the propane shortage that is impacting Wisconsin in advance of the extremely dangerous temperatures expected to move across the state in the week ahead. The declaration directs all state agencies to be on alert and to assist as needed.

Emergency Hotline: The Wisconsin Department of Administration, Division of Energy Services has established a hotline for citizens affected by the propane shortage, which is 1-866-432-8947.

Additional LIHEAP Funds: Governor Walker has directed the Division of Energy Services to release $1.5 million in additional Low Income Home Assistance Program (LIHEAP) Crisis Benefit dollars to the 49 counties and tribes with a high percentage of propane households.

Keep Wisconsin Warm Fund: has increased their income limits and will allow households to receive two benefit payments in a year.

WI National Guard: Authorizes the National Guard to assist civil authorities and
authorizes the Adjutant General to utilize personnel called to state active duty pursuant to this order.

Click here to read Executive Order #130.

Click here to read News Release