Midwest Propane Shortage Worsens

Arctic temperatures have caused a severe propane shortage across the Midwest.

January 28, 2014

NEW YORK – Cold weather has created a propane shortage across the Midwest, which has forced prices near $5 a gallon in some markets, NBC News reports.

Wisconsin is the latest of 24 states that have declared an energy emergency, as more arctic air rushed into the Badger state yesterday.

Roughly 14 million Americans, including 250,000 Wisconsinites, rely on propane fuel and they have faced increasingly higher costs to heat their homes, as demand has outpaced the already low inventories.

“It’s not a permanent shortage and we won’t run out, but there are no avenues to deal with this shortage today other than a break in the weather,” said Brandon Scholz, managing director of the Wisconsin Propane Gas Association. “We could be sitting in this situation to spring.”

Wisconsin Governor Scott Walker said record-breaking temperatures as well as a production loss caused by the temporary closure of a major pipeline that supplies the fuel to parts of the Midwest caused the short supply of propane.

The propane industry relies on truck fleets that are now running at full capacity to get supplies to states across the Midwest, Northeast, and Southeast.

A spokesperson for AmericGas, the largest U.S. propane retailer, said last week it was rationing deliveries in Alabama, Georgia and Tennessee, reducing supplies to 100 gallons per customer, down from the standard 250 gallons.

“Supply is very tight. There is propane to be had out there, but there are supply and transport issues across the country,” said Simon Bowman.

Last Friday, propane heading for the Midwest was selling at $4.30 a gallon, more than double its price from a week earlier, though down from its previous high of $5 a gallon on Thursday.

To make matters worse, natural gas users in the Midwest are also feeling the pinch after a natural gas pipeline near Winnipeg exploded over the weekend. As a result, utility companies have asked more than 100,000 customers to turn down their thermostats or use alternate heating fuels.