Effingham Daily News, Effingham, IL

January 24, 2014

Propane shortage delays deliveries

Tony Huffman Daily News
Effingham Daily News

---- — Editor’s Note: This is the fifth in a series of stories looking at the local impact of the recent storm and frigid temperatures.

A propane shortage has led to sharply rising prices and left residents and businesses conserving what they have left.

Brenda Byers, owner of The Hangar Restaurant at Percival Springs Airport just south of Effingham, was informed Thursday that she will receive one last propane delivery this week until further notice.

“They just don’t have it,” said Byers, who buys her propane from Red Hawk Propane in St. Elmo.

Byers had only nice things to say about the propane distributor, which is honoring her contracted price per gallon despite prices more than doubling this week. But the uncertainty of getting more propane has left her business in a lurch.

“We are cutting back our hours at the restaurant,” she said.

Starting immediately the restaurant will be closing six hours earlier at 2 p.m. on Tuesday, Wednesday and Saturday as a result of the shortage. However, she is keeping her regular hours on Thursday, Friday and Sunday.

The propane shortage can be blamed on the extremely cold weather, according to Illinois Propane Association Spokesperson John Tibbs, but several other factors are contributing to the growing problem.

“This started back in late fall with wet crops,” said Tibbs. “We used 300 million gallons of propane to dry the crops. We normally use 60 to 65 million gallons (to dry crops).”

Tibbs added that the United States doesn’t have a stock pile of propane like it does for crude oil. These issues, in addition to the fact that Illinois has seen a 30 to 70 percent increase in demand in various areas, has left an unprecedented shortage.

“This is history as far as the length of time for propane shortage,” said Tibbs, noting the industry has been struggling with demand since November.

Although several propane distributors in the area wouldn’t comment on the shortage, Kevin Bernson, spokesman for Shelby County Electric Cooperative, believes the public should know about the limited supply.

“At Shelby Energy, we just want to inform people that if they use propane for their primary heat source, they may want to look into something else in case the shortage becomes more critical,” he said.

According to Bernson, Shelby Electric got a letter from their distributor Amerigas, saying the co-op will not get propane deliveries after this week. This week it got one of six deliveries, he added.

“It was odd for us to get a letter like that,” said Bernson, adding that some of the customers who do receive propane this week will get a limited amount. “People need to know they might have a hard time getting propane.”

Prices at local propane distributors had risen to more than $4 a gallon by Thursday afternoon, up from an average summer price of $1.60 to $1.80.

Tibbs said the tumultuous weather isn’t helping with delivery of propane, which is now being trucked from as far away as Mississippi, Texas and Alabama. He is optimistic that deliveries will continue, as the Illinois Department of Transportation changed the rules for propane drivers in December, giving them the ability to drive longer hours.

Tibbs said consumers shouldn’t be surprised by the price spike, saying it is a normal occurrence.

“The price is related to supply and demand,” said Tibbs. “We don’t call our legislature when gas goes up. We are just talking about hundreds of gallons purchased at a time, instead of like 20 gallons of gas for a vehicle.”

Tibbs added another contributing factor to the cost increase may be due to United States’ export of propane to Europe, which has also been hit with abnormally cold temperatures this winter, he said.

“You are always going to have exports,” said Tibbs. “One thing I have seen that has been put out there is the fact that when we look at the situation, there is no strategic stockpile of propane like we do with crude oil. We need to ask ourselves ‘How do we replenish in a shortage?’”

Tibbs suggests propane customers take advantage of incentives offered by propane distributors through the warm months to fill their tanks before winter. For now, he is unsure when the shortage will end.

“I’d like to think not,” said Tibbs of the possibility of running out of propane. “Truthfully, I can’t answer that question.”

According to the Associated Press and Energy Department, 5.5 million households, mostly in the Midwest and the South, heat with propane.

Tony Huffman can be reached at 217-347-75151 ext. 138 or tony.huffman@effinghamdailynews.com.

Pull-out quote

“This is history as far as the length of time for propane shortage.”

Illinois Propane Association Spokesperson John Tibbs