Vermont propane prices spike

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.”

Vermont Fuel Dealers Association Executive Director Matt Cota. VTD/Josh Larkin

Vermont Fuel Dealers Association Executive Director Matt Cota. VTDigger photo


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.

John Herrick

Comments

  1. Jim Barrett :

    All of this trouble and yourt legislature just made it illegal to frack for gas in this state. Prices will always be high for everythin g because the leaders in this state treat everything as harmful to something. They lovbe to outlaw something in the name of saving us from ourselves. Enjoy your prices and enjoy your support of the left wing running this state. Oh yes, where is the illustrous leader Mr Shumlin? Oh, he is in Las Vegas enjoying himself and having a good time on your buck!!

    • Matt Fisken :

      Jim, you’re joking, right? Hopefully you know Vermont has no fossil fuel reserves it can possibly frack. All we can do is reduce our dependence on these imported fuels by using less (and no, I don’t think wind turbines and solar panels can/should replace imported fossil fuels).

      • John Greenberg :

        “and no, I don’t think wind turbines and solar panels can/should replace imported fossil fuels”

        So what should replace them, Matt?

        • Matt Fisken :

          I think it’s a fool’s errand to try *replacing* these fuels we’ve been using so wastefully with anything.

          We should be replacing our lifestyles and expectations based on the understanding that (conventional) peak oil has already happened, fracking will not save us, and we may soon be stuck with what Vermont has always had: solar gain most of the year, wood year round, and consistent, small-scale hydro in proportion to the health of our forests.

          It’s important for me to say, I still think solar panels and wind turbines have their place, but at a scale which provides *necessary* utility and is not connected to the grid, which, as it’s designed and used, will always be a nuclear and fossil fuel vacuum.

          • John Greenberg :

            Matt:

            I don’t understand your comments.

            If we are truly “stuck with what Vermont has always had: solar gain most of the year, wood year round, and consistent, small-scale hydro in proportion to the health of our forests,” then it would appear that you’re suggesting that we are also “stuck” with 19th Century Vermont lifestyles. But your last paragraph appears to suggest otherwise. Which is it?
            In your last paragraph, you argue against connecting to “the grid, which, as it’s designed and used, will always be a nuclear and fossil fuel vacuum.”
            I don’t understand the word “vacuum” here at all, but the real question is this: in a rapidly changing world driven by breakneck technological changes, why would you assume that tomorrow’s grid will be identical to today’s?
            US grids are undergoing significant change, some of which you have opposed in these columns repeatedly: e.g. smart metering, which is a step towards a smart grid. Today’s ISO-New England grid is certainly centered on existing New England electricity generating sources, which clearly does mean natural gas and nuclear. But there are only 5 nukes left in New England, one of which (VY) is slated to close at the end of the year, and the other 4 of which have limited lifetimes before them (if history is any precedent). So, one way or the other, the ISO grid WILL be changing in the coming decades. The question isn’t “if” it’s how.
            Finally, if “solar panels and wind turbines have their place” off of the grid, then why not ON it? Properly integrated with other resources, the grid can overcome many of the obstacles of intermittency which otherwise require storage at individual sites and at great cost. Please explain why you’re taking an important solution off the table from the outset.

          • Matt Fisken :

            John,

            What % of the electricity on the grid do you think is used to heat thing up or cool things down?

            Now, what % of electricity generated by people off the grid is used to heat and cool things?

            re: “vacuum” think vacuum cleaner. Maybe “black hole” would have been a better term to use.

          • John Greenberg :

            Matt:

            “What % of the electricity on the grid do you think is used to heat thing up or cool things down?”

            I can’t give you a New England specific answer, but nationally, EIA estimates that 19% is used for space cooling (and I assume heating) and that an addition 9% is used for water heating. http://www.eia.gov/tools/faqs/faq.cfm?id=96&t=3

            I have no idea what percentage off-grid folks use for these purposes.

            And I still have no idea what you’re trying to say here.

            In particular, I don’t understand how you think we should be living (19th century resources = 19th century lifestyle??), why you think the grid will be the same a decade or 2 from now as it is now, or why you believe that solar off-grid is fine, but on-grid isn’t. (I’m guessing that your allowance of off-grid wind relates to size: namely, that you think that small turbines are ok, but large ones aren’t).

            Behind the trees of all these arguments lies a forest, and that’s what I’m trying to get at.

            To be worthy of consideration, an energy policy needs to match available resources to desired lifestyle. If you want to confine yourself to 19th century energy sources AND to contemporaneous lifestyles, that’s an honest, coherent position. But it’s also a position that few are willing to adopt, so it’s a political non-starter.

            What I’m sensing here is that you are trying to shoehorn 21st century lifestyles into 19th century resources, but aren’t willing to admit it. That’s neither honest, nor coherent.

        • Glenn Thompson :

          John, I think every Vermonter who has seen their heating costs go through the roof during this winter’s cold weather would love to hear how they can replace heating their homes currently heated by Propane, Fuel Oil, Kerosene, with ‘Wind and Solar?

          Keep in mind, the capacity factor of wind is only 25-30% and solar in Vermont is much less than that. FYI, I was in Vermont for the holidays and the total amount of sunshine only added up to a few hours over a 3 week period. If one thinks they can heat their homes in Vt with Solar power must be enjoying life in fantasy land….or they have so much money to burn they can afford to supplement their existing heating systems with solar and wind. A high % of Vermonters don’t have that luxury!

          Perhaps someday it could happen, but not with current technology nor will it happen anytime soon!

          • John Greenberg :

            Glenn Thompson:

            I never suggested that Vermonters “can replace heating their homes currently heated by Propane, Fuel Oil, Kerosene, with ‘Wind and Solar.” Nor to my knowledge has anyone else. I asked Matt Fisken a simple question, directly quoting his own statement right above mine.

            Since you’re asking, however, there ARE good answers to your question about weaning Vermonters from using fossil fuels for heat.

            The first one is weatherization and proper insulation. A properly insulated building with sealed drafts takes far less energy to heat than most of the buildings in Vermont (and elsewhere). If all Vermont buildings were properly weatherized, our fossil fuel burden would decline precipitously.

            Second, using the sun correctly (mostly applicable to new construction) can greatly reduce the need for added heat: e.g. passive solar, trombe walls, etc. Proper plantings around buildings can help with any building (e.g. shade trees to reduce air-conditioning needs)

            Third, there are a variety of technologies available — many of which consume electricity which could be supplied from renewable sources — to further reduce energy input needs: heat pumps, geothermal systems, etc.

            Fourth, there’s fuel switching: wood pellets/wood stoves, furnaces are existing examples.

            The problem is hardly as intractable as you suggest. Most of the alternatives just suggested either save money over time, or at least add little or nothing to existing costs (over time). There are obstacles to making the required transitions, but most are political and economic, not technological in nature.

          • Matt Fisken :

            John,

            Like Glenn, I read your “simple question” to be support of the proliferation of grid-tied “renewables” which the “Electrify Vermont” crowd believes will eliminate nearly all fossil fuel use in Vermont by 2050. It is a fact that you, more than anyone in this forum, has espoused the ability of industrial wind turbines to replace GHG emitting fossil fuel power generation at a “nearly 1:1 ratio.”

            Because a great deal of the electricity transmitted by VELCO is turned into either heat or is used for cooling, I don’t think it’s worth differentiating between “thermal efficiency” and “electrical efficiency” the way many do.

            I’m glad to see we are now in agreement that we should be focusing on “using less” rather than building new generation infrastructure in a fruitless attempt to replace non-renewable energy resources.

          • John Greenberg :

            Matt,

            You make 4 different assertions here. I’ll respond to each in turn:

            1) “Like Glenn, I read your “simple question” to be support of the proliferation of grid-tied “renewables” which the “Electrify Vermont” crowd believes will eliminate nearly all fossil fuel use in Vermont by 2050.”

            In other words, you supplied your own meaning, rather than reading what I actually wrote. I can’t control what you choose to bring to my words or how you opt to interpret them. I can control exactly what I write, and I try to do so with considerable care.

            2) “It is a fact that you, more than anyone in this forum, has [sic] espoused the ability of industrial wind turbines to replace GHG emitting fossil fuel power generation at a “nearly 1:1 ratio.”” I have cited the actual facts, and documented them. So far, no one has presented any studies or any other sound reason to disbelieve what the rest of the world takes for granted. Feel free to present studies which suggest otherwise.

            Since my discussion of this issue with Willem Post occurred almost a year ago, I should also note, before he does, that the figures we’re talking about are based on relatively low levels of penetration of wind technology into modern grids, and that, beyond levels of penetration unlikely to be seen in New England for at least a decade or so, there may be reasons to lower the ratio (or modify grid technologies, etc.). The literature I’ve seen suggests that below between 5% and 20% penetration (depending on who is writing), however, the nearly 1 to 1 ratio holds, and we’re currently WAY below that level in New England.

            *****

            So that there can be no ambiguity, however, what we’ve been discussing in this comment stream is not “fossil fuel power generation,” bur fossil fuel USE, an entirely different proposition. I have NEVER suggested that wind turbines can replace the latter on a 1 to 1 basis, and I know of no evidence which suggests they can.

            3) “Because a great deal of the electricity transmitted by VELCO is turned into either heat or is used for cooling, I don’t think it’s worth differentiating between “thermal efficiency” and “electrical efficiency” the way many do.”

            This comment makes no sense at all. The distinction between thermal efficiency and electrical efficiency concerns the GENERATION of electricity. To cite the example I know, a nuclear plant turns roughly 1/3 of the heat it produces into electricity, and dumps the rest into cooling water. Since no one is using the cooling water to heat or cool their buildings, that thermal inefficiency is real.

            Similarly, since power lines also involve some loss of power, the amount of electricity reaching consumers is LESS than the electricity produced, and since that loss also makes no contribution to building heating or cooling, it too is dead loss. Finally, since air conditioners are not 100% efficient, some of the electricity actually consumed to cool a building will be lost as well, yet another form of inefficiency.

            4) “I’m glad to see we are now in agreement that we should be focusing on “using less” rather than building new generation infrastructure in a fruitless attempt to replace non-renewable energy resources.”

            I have been advocating for energy efficiency for as long as I’ve worked on these issues, which is decades now. The first public comments I remember writing to promote efficiency were addressed to the Public Service Board in the mid-1980s, though there may be some before those.

            If the word “now” above is meant to suggest that I have come to this position recently, then you are sorely mistaken.

            I have never accepted the “rather than” in your sentence, and I still reject it. “Building new generation infrastructure” is necessary even if demand is significantly curtailed. Production plants don’t last forever and it would be foolhardy to simply assume that they will fail at the exact same time and pace as any hoped for declines in demand. Fossil fuel and nuclear plants should be replaced by renewables for a host of environmental reasons anyway. And there is at least some probability that transportation fuel shifting will cause electrical demand to rise while liquid fuel use declines, EVEN if, overall, energy use declines as a result. For all these same reasons, I don’t see building new renewable generation infrastructure as “fruitless.”

    • Bob Sterling :

      The state goverment doesn’t like any industry unless they have their fingers in the pie. If they don’t control it and can’t tax it, they outlaw it.

    • timothy price :

      Winterization, bundling up, being more physically active, are all way better ideas than busting up the rock and messing with the ground water. We will never allow fracking so get over it.

  2. You could be burning wood pellets and cut the price of your heating by 60% from propane. The dollars stay here in New England. The up front cost is higher but the payback is real. You chose. It couldn’t be easier.

  3. Janice Prindle :

    This reads almost word for word like the WCAX “report” with no comments beyond an industry spokesman. Yesterday Digger ran a commentary, actually a well-researched piece, that attributed the problem only partly to the farmers, and the rest to the lack of a cap on exports, a problem that is likely to affect the price of other fuels as well. The lack of a cap gives the fuel industry an opportunity to direct this vital commodity to foreign markets if the prices are higher there, driving up the price back home. This is our energy policy being written by the likes of Halliburton.

    Telling people they can cope by “buying ahead” is almost an insult to those of us in the real world who can’t afford to divert so much of our limited income to fuel.

  4. Lee Stirling :

    It seems like the author of this piece, those who published it, and those commenting on it here today failed to read or remember the commentary in VTDigger on 2/5/14 by Mike Ryan entitled: Propane is now for export and profit, not for Vermonters. Please read it, then re-read John Herrick’s article above.

    http://vtdigger.org/2014/02/05/mike-ryan-propane-now-export-profit-vermonters/

  5. Daniel Emery :

    I strongly suggest that Matt Cota, Peter Bourne, other propane dealers and the public read (or reread and address) the facts article on Vt Digger Feb.5th. As it was well written and researched Mike Ryan.

    Today’s article by John Herrick (and the quotes by Cota and Bourne) seems to ignore, among other causes, the large fact that US propane exports exploded 76 per cent in November 2013 from November 2012, just prior to our propane price explosion.

    Thank you Mike Ryan for your indepth fact finding. Hopefully the VT fuel dealers and Mr. Cota will get an nopportunity to be asked by John Herrick or some other VT reporter about the profit seeking/exporting by the propane industry, that in my opinnion, seems to be more responsible for this ridicilous price increase since the extreme increase of exported propane for a larger profit.

    Just a few days ago the national news reported quadruple prices for whatever groceries were available during the recent storms.

    These horrible pricing/profit gouging surges during hard times need much more press and less of the “same old same old” and lets just move on attitude.

    The propane pricing/industry transparancy that Mike Ryan addressed should be addressed by more in the press, IE: local tv and all VT press.

  6. walter moses :

    Mike Ryan’s excellent post should be addressed by Matt Cota. I read Mr. Ryans excellent post and got out my file and chainsaw.

    • Mike Ryan :

      I don’t understand why my posting of yesterday is still not approved with no word from any moderators

      • Mike Ryan :

        I will try it again.
        I don’t know why our TV Channels are not letting you have the facts. Maybe they have done it and I missed it.

        Anyway, I am happy to say that like the VT Digger, the Burlington Free Press is keen to know the facts and get them out there.

        This first link is to an interview that I gave to the Free Press on Tuesday this week at their request. I think it answers a lot of your questions about the causes of the problem and it includes the action that the VT Washington delegation is taking.

        http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=2014302190008

        This Burlington Free Press link below is very important. It declares that the Federal Energy Regulatory Commission has, for the first time in history ordered a pipeline company at least temporarily to restore the flow of propane from Texas to the North East and Midwest.

        http://www.burlingtonfreepress.com/article/20140220/BUSINESS/302200038/Federal-agency-orders-more-propane-for-the-Northeast-to-ease-supply-problems

        Bottom line. The powers that be are beginning to recognize that the pipeline and other infrastructure in the U.S. is not adequate to support the needs of the recent massive surge in propane exports as well as the needs of U.S. consumers.

        We must continue to raise the pressure. It probably won’t help much this winter but it could help avoid a total disaster next winter if these things are allowed to proceed unchecked.

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