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Bob Haase's Another Can of Worms

30-Jan-2014

More Than a Propane Shortage

You may have seen or heard information on the news about the current propane shortage but if you don't burn propane you may not be concerned.  You should be concerned because the same thing could happen with natural gas.  The propane shortage is similar to the games they play with gas prices for our vehicles, but maybe a little worse.  I say worse because in the kind of temperatures we have had lately it could mean life and death if you don't have heat in your homes.

We burn propane here in Eldorado and at our cottage near Presque Isle.  We have a pre-paid contract for both at $1.39 per gallon.  This is a legal contract that we sign.  I tried to call and get some propane that I have already paid for and I could not get a fill because the phone message from my supplier said that they are not answering calls. They also said that they would not be honoring any prepaid price agreement and I would have pay the current rate which would probably be around $5.99 per gallon.  Our neighbors to either side of us contract with Merwin Oil and they were honest enough to honor their prepaid price agreement which was close to what mine was.  

My supplier at our cottage  said that they could not honor any pre-paid contract and if I wanted propane it would cost me $6.99 per gallon plus an additional delivery charge.  I checked with a friend that has a cottage close to me and their supplier Ferrellgas was honoring their prepaid contract which was close to what I had.  If I were to get 100 gallons to help me make it through the winter at my cottage, it would cost me over $700 compared to our contract price of $139.  I mentioned the names of the suppliers that were honoring the contracts because I think they should be recognized for their actions which is probably costing them a lot of money.  I am not mentioning the names of my current suppliers, but I plan on changing this summer. 

The wholesale price of propane on January 6, was $1.71 and the wholesale price on January 27 is now $4.42, but the retail suppliers had a contract price with their suppliers and ordered propane under that price.  My situation is not nearly as critical as the people that have to now pay cash, no credit allowed, for any propane at the time of delivery.  Many senior and people on fixed incomes may not be able to afford this.  There are others that may be able to afford it but propane retailers are not accepting new customers and are taking care of their own customers which I can understand.  

 

One of the problems that caused the shortage was the huge amount of propane used to dry the corn crop for ethanol this year.  I saw one article that stated they normally use 50 million gallons but this year they used 400 million gallons.  Did the farmers drying their corn use the propane I was suppose to get at my contract price and now I have to pay more?  Once there was a shortage, a major wholesale supplier shut down one of their main supply lines for scheduled maintenance.  If there was damage and a repair was needed I could understand, but I cannot understand shutting down for normal maintenance under these circumstances.  They also decided to export to other countries around two to three times more this year than they normally do.  This is a nationwide problem and even friends in Kansas are paying $5.99 per gallon now. Do you see a pattern here?  Just like the gas for our vehicles... the gas will probably drop to around $4.00 a gallon next summer and they will expect us to think we are now getting a deal.  I don't think it is our local suppliers, but rather the big gas companies.  I think we should be pushing to end the current government regulations that require 10 percent ethanol in our gas.  Two legislators from Oklahoma and California have already sponsored a bi-partisan bill to do just that.

Using corn for ethanol is just too costly, raising the price of propane, our food, and sacrificing our environment rather than protecting it.

Bob Haase is the host of “Outdoors Thursday” heard Thursday mornings at 9:10 a.m. on News-Talk 1450 KFIZ.

 

  

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