Mid-County Coop/Propane Shortage/Supply 30 Jan 14

For Minnesotans who heat their homes and businesses with propane, this winter has been especially tough.

In a press release, Mid-County Coop General Manager Bill Reimers says “The prices have been very volatile.”  “Increases have been as high as 75 cents in one day.”

Mid-County Coop’s retail propane price peaked Jan. 27. Although it dropped the next day, prices are still more than double what they were a year ago. In order to give customers the option of a less costly load,Mid-County Coop has temporarily lowered its minimum purchase.

“Some companies have had to limit the amount they sell to customers,” Reimers said. “We’ve been very fortunate and haven’t had to do that. We’ve had adequate inventory through all of this.”

One factor accounting for the recent propane shortage is weather. Last fall, a large amount of propane was used for drying grain after the late harvest. More recently, the winter heating season has been taking its toll, with several days of sub-zero temperatures.

Propane exports are another contributor in the shortage. Previously, U.S. propane prices were lower than in other countries, and many suppliers found it advantageous to ship overseas. Long term, the export issue will be resolved by global markets, as the domestic price becomes less imbalanced, according to a Jan. 27 article in Propane Price Insider.

 A change in U.S. propane delivery infrastructure is a third factor in the shortage, as some propane pipelines have been switched to other uses.

“Everybody’s asking how long the high prices will last, and of course, no one knows for sure,” Reimers said. “I think they will go down after the heating season.”

In the meantime, Minnesota legislators have requested that President Barack Obama temporarily restrict propane exports, and encourage more fuel shipments from Texas.