DAN GEARINO The Columbus Dispatch
January 22, 2014
COLUMBUS — Rural Ohio has an extra reason to worry about this week’s frigid weather because some propane retailers are running low on the home-heating fuel.
A variety of factors have led to a tight supply and rising prices, both of which are more extreme than has been typical in recent years.
Dealers are taking steps to conserve their inventory, including delaying deliveries and allocating much of the remaining fuel to consumers who are closest to running dry.
“It’s possible it may become a critical situation with the cold temperatures that are predicted for our area,” said Roger Stewart, vice president of Consolidated Gas Cooperative in Mount Gilead, writing on the co-op’s Facebook page. “We are asking our customers to be patient … during this very difficult situation.”
The co-op’s supply is down to about half of what it would usually be in mid-January, said spokeswoman Pam Hawk. This is largely because of reduced deliveries from wholesale suppliers, she said.
On Saturday, Gov. John Kasich issued an emergency declaration that temporarily suspends restrictions on deliveries by tanker trucks that supply propane dealers, a move designed to speed up shipments. Drivers can now be on the roads on weekends and have no limits on consecutive days of work.
Propane is the main heating fuel for 6 percent of Ohio households, according to the Census Bureau. Almost all of those houses are in rural areas, including a dozen counties in which propane’s share is at least 20 percent.
Most households in Ohio — 68 percent — heat with natural gas, followed by 21 percent that depend on electricity.
Morrow County, which includes Mount Gilead, is the most dependent on propane, with 34 percent using the fuel. Franklin County, by contrast, has only 1 percent of households heating with propane.
The average retail price of propane was $2.86 per gallon last week, up 32 cents from the previous week and up 59 cents from last year, according to the Energy Information Administration. Ohio consumers are reporting prices that range from about $2.60 to more than $4.
The federal office lists several reasons for the tight supply and high prices:
• Farmers used an unusually large amount of propane this past fall to dry crops, which helped drain inventories before cold weather arrived.
• The heating season began early and has had stretches of extreme cold, leading to further depletion of the fuel.
• Global propane prices are higher than in the United States, which has led producers to sell an increasing share of their product for export.
While not every propane dealer is running short, they are all aware of the supply constraints. The differences often come down to the inventory levels of specific wholesalers and to the amount of storage each dealer has on site.
“I’m actually in really good shape,” said Jordy Anderson, owner of Mount Perry Propane, located west of Zanesville. “I know of friends I have in the business that are having a lot tougher time than I am.”
Consumers are accustomed to prices jumping with cold weather. Also, many households have large-enough storage tanks that they are not in danger of running out in the next few weeks.
“They always jack (prices) up in the wintertime,” said Rodney McFarland, 66, who lives outside Lancaster. “They get you any way they can.”
He has about 170 gallons remaining in his 500-gallon tank.
As with many propane customers, he uses the fuel because of a lack of other options. His house is not connected to a natural-gas line, and his electric heat pump is equipped to provide only part of his needs.
Some propane customers prepay for the fuel or have signed up for fixed-price contracts. Each supplier will have its own approach to allocating fuel to those people, as opposed to customers who are paying the current price.
At Consolidated Gas, deliveries are going in order of need, Hawk said.
“If someone says, ‘We are completely out,’ we will go out and fill them,” she said. “If someone says they are at 10 percent, they’re next.”