Lawmakers Request Hearing on Propane Shortage Issues

Midwestern House members ask Energy & Commerce Committee to review propane shortage; Purdue unveils propane website

Published on: Feb 11, 2014

House legislators are asking leadership of the House Energy and Commerce Committee to review the cause of recent propane supply issues, the outlook of Midwestern supplies and potential solutions to the problem.

Nearly 40 Congressmen and women signed on to the letter Friday, addressed to Reps. Fred Upton and Ed Whitfield.

"As you may know, households and businesses across the Midwest have seen significant spikes in the price of propane fuels during the severe winter cold. Any further reduction in supply threatens to leave our constituents without the fuel necessary to heat their homes and to keep livestock and poultry barns warm," the legislators noted in the letter.

Midwestern House members ask Energy & Commerce Committee to review propane shortage; Purdue unveils propane website (Purdue photo)
Midwestern House members ask Energy & Commerce Committee to review propane shortage; Purdue unveils propane website (Purdue photo)

The request comes shortly after other groups of lawmakers have raised concerns about propane shortages; Sen. Chuck Grassley, R-Iowa, requested that the Federal Trade Commission review propane issues, suggesting that the FTC "remain vigilant in overseeing the propane market prevent possible anti-competitive behavior or illegal manipulation."

Sen. Claire McCaskill, D-Mo., had a similar request for the Commodity Futures Trading Commission: "Given the CFTC's prior findings of manipulation in the propane market, it is critical that the government continue to ensure rural Americans that they not being harmed by opportunistic trading and price manipulation," McCaskill said late last month.

The Energy Information administration reports that average U.S. residential propane prices have risen to $3.89 per gallon for the week of Feb. 3, up from $2.80 in the last week of December but down from $4.01 during the week of Jan. 27.

Prices are higher in some Midwestern states, as noted in the EIA graphic below.
Lawmakers Request Hearing on Propane Issues

EIA said that the propane shortage may have several drivers, one being the wet fall that caused higher propane demand for grain drying. Following the fall, EIA says, propane supplies were not fully replenished.

In addition, the Cochin Pipeline, which supplies propane to the Midwest from Canada, was out of service for maintenance from late November to Dec. 20, and unavailable to deliver supplies. EIA says rail transportation disruptions, both due to weather and other factors, also affected inventories in late January.

Though supplies have rebounded, EIA said Monday, they are still below the 5-year average in the Midwest.

Web resources
In effort to help producers combat high propane prices, Purdue University Extension on Monday unveiled a new web page dedicated to propane conservation and resources.

"We want people to know that this crisis isn't just about them; it's also about their neighbors," said Abby Hostetler, a Purdue Extension Disaster Education Network communications specialist who provided the information on the website. "We're encouraging users that if their tank is at least 30% of capacity to let others who might need propane more get it. So conserve what you have rather than rush to get more."

Steven Cain of Brookston, Ind., EDEN homeland security project director, uses propane gas to heat his home. He noted that the price of propane, also known as LP gas, has risen from a fall contract rate of about $1.50 a gallon for 1,000 gallons in his area to a pay-as-you-go rate of more than $4 a gallon. Customers can get only partial refills because of the rationing, he said.

"At the end of January, we received a letter from our supplier telling us to be prepared to seek alternative heating," he said. "We are watching the LP tank gauge very closely, conserving as much as we can and hoping to make it through February."

Farmers, too, are keeping an eye on supplies. Purdue offers propane conservation tips for producers with heated barns:

• Lower the temperature, but keep an eye on animal comfort
• Monitor ventilation systems; make sure they don't compete with heaters
• Consider an energy audit

Read more on Purdue's new website and check out How To Keep Farm Propane Use Under Control.