Midwest farmers used four times as much propane to dry their crops last fall than the year before, and Vermont fuel dealers and customers are feeling the heat.
A wet fall has led to a shortage in supply that has driven residential prices to record highs across the country this year. Dealers have to travel further to find enough propane to serve their customers, Vermont dealers say.
The average price for residential propane in Vermont has increased from $3.75 per gallon in December to $4.22 per gallon on Feb. 3, according to the U.S. Energy Information Administration.
“It hasn’t been a whole lot fun out there,” said Peter Bourne, owner of the heating fuel dealer Bourne’s Energy, which serves the northern half of the state.
He said his company will not leave customers cold, but traveling long distances in search of fuel has driven up propane prices this winter.
“Generally speaking, we’ve been able to find it,” he said. But this year his company has been driving to the southern tip of New England to find propane. “You’ve got to have the product, so you have to pay the price.”
While this year’s cold winter has depleted supplies, Matt Cota, executive of the Vermont Fuel Dealers Association, said dealers have been on alert since the early signs of a shortage this summer.
During the past harvesting season, corn and other grain farmers used large amounts of propane to dry their crops. In 2012, farmers used about 65 million gallons of propane, but a wet fall in 2013 caused farmers to use about 300 million gallons, according to the National Propane Gas Association.
No Vermont dealers have turned down customers’ requests for heating fuel, said Cota, who represents more than 100 dealers statewide.
Cota said the good news is that the coldest days of winter are behind us. “There is a light at the end of the tunnel in terms of we are getting there,” he said.
He said there are several other compounding issues that create a supply shortage. The Cochin Pipeline System, which spans the Upper Midwest, was closed during December for maintenance. Also, he said, rail cars that previously carried propane are being refitted to carry crude oil, reducing transportation capacity.
Cota said the good news is that the situation could have become worse. Canadian National Railway Co. and the union representing some of those workers, the Teamsters Canada Rail Conference, reached a deal with the government to avert a strike that could have come as soon as this weekend.
“That would have had a tremendous impact on our transportation infrastructure,” Cota said.
Bourne advised customers to buy ahead, a process in which customers settle on a fixed price in advance of the heating season. While customers might not always save money, he said at least there is certainty in the price for fuel.
Correction: Rail cars that carry propane, are being repurposed for crude oil.
