By Russ and Tiña De Maris
Across the U.S., propane prices have skyrocketed up 70% since last November. In some places, folks depending on the pressurized gas for home heating are hurting. In Wisconsin, the situation has become so intense that rules limiting how much time truck drivers can work have been lifted for LP truckers. What’s happening? A propane shortage is creating world-wide issues.
Perfect propane storm
Winter is a good time for a storm and, now, converging circumstances have created the perfect winter storm for LP gas users. While the public didn’t see it coming, propane pundits were taking notice as far back as last summer. The July 20, 2020, issue of Successful Farming warned its farmer readers that propane shortages could be expected by fall.
The publication urged farmers to store up as much LP as they could, while prices (at the time) were about 20% lower than a year earlier. The reason? COVID-19 had knocked down a significant amount of the call for gasoline. With less car-fuel being refined, refiners also were cutting back on LP production. Up to a quarter of the nation’s LP comes from refineries, with the balance derived from natural gas. The first element of this perfect storm of a propane shortage then: reduced production of LP.
Adding to the growing propane shortage crisis: Saudi Arabia. The Number Two world oil producing country, second only to the U.S., has cut back production in hopes of pushing up the price of oil. The country’s decision has had a huge impact on the U.S., not so much in terms of what America imports, but how much it exports. We’ll come back to this in a minute.
Restaurants to blame?
A second contributing element – and it’s a “who would have thought” one – was a tremendous increase in the amount of LP used by the restaurant industry. Again, the finger points to COVID-19.
Local and state governments responded to the COVID-19 pandemic by shutting down indoor dining. Restaurateurs – where they could – started putting their customers outside on patios and sidewalks. All well and good – until cool weather started snaking in. To keep those customers coming in, they had to be kept warm. The demand for LP to fire those patio heaters is something to be reckoned with: The typical commercial heater will chew up a five-gallon cylinder of propane in less than ten hours.
Weather woes
Where COVID-19 couldn’t deal a dirty hand, the weather stepped in. The La Niña weather cycle suddenly chilled off Asia. As a result, the demand from Asian countries for U.S.-supplied LP suddenly jacked up. More than half of America’s propane suddenly got a passport to places like Japan, China, and South Korea. But the weather issues didn’t stop in East Asia. It’s visited the Midwest – specifically the U.S. Plains states. Cold weather has created a crisis for families who heat with propane, with Wisconsin’s chills just an example.
Poly-what?
The final blast in the perfect storm of a propane shortage may surprise you. It’s called plastic. LP gas is a necessary ingredient in the production of propylene, the building block of the plastic polypropylene. That particular plastic is used in the making of automotive interiors and packaging. And raising the LP ante? Polypropylene is a critical component in many items of personal protective gear. Whoa! Here comes COVID-19 again!
Much of the world’s supply of propylene is manufactured in East Asia. China’s plastics exports jumped 15% in 2020. But a tell-tale came in the country’s exports in November. Year-over-year plastics exports jumped an alarming 44%. The demand for U.S. propane took yet another hit.
Pain on payment
The results are visible across the country. Since the second week of November 2020, prices for propane have gone up each and every week, according to the U.S. Energy Department. While the pain of paying more for propane is notable, not being able to buy it really hurts. Chuck Woodbury, publisher of this newsletter, reports he’s finding it hard to purchase propane cylinders for his Mr. Heater. Bigger cylinders, as you might find on the front of your travel trailer, are also in high demand, and industry reports it’s having a hard time keeping up with production.
Interestingly, Quartzsite, Arizona, where this writing team is based, isn’t reflecting the rest of the country. The price at most of the local LP retailers is presently at $2.30 a gallon. That’s where it’s been for months on end. Higher than the national average, but certainly not following the curves. For you, the situation may be different. For RVers trapped in the Midwest, you’re in our thoughts.
When will the propane shortage end? Energy pundits are suggesting perhaps when March or April rolls around. The demand from U.S. residents for heat will presumably fall off and so may the shortages and, hopefully, the increasing prices.
Propane fuel station photo: AFresh1 on flickr.com
Related:
Why you should NOT refill disposable propane cylinders, with an exception
##RVT987b
It all depends on where you are located in the US!
More Propane is generally used in the Northern States than in the South!
Also, another reason that Diesel Prices climb in the winter is due to the fact Heating Oil (similar to Diesel) is heavily used in the Northern States, thus driving up prices.
Within a month #2 heating oil jumped from 2.39 to 2.59 on the far northeast coast. So .20 doesn’t seem much , but when you re buying 100s of gallons it is a significant jump. Hang in there Chuck it’s going to warm up.
I pre-purchased from my propane company last July and had my first fill the end of January. I still have over $400 worth available. I also filled my Motor Home tank and all my small 20# cylinders last fall from my 500 gallon propane tank and put them away for the winter. So I am not hurting for propane.
I own my own 500 gallon LP tank because I run a high efficiency heat pump with a 95% efficient gas back up heating system. The system switches from Heat Pump to Hi Eff LP gas around 30 D F. I can go two years on one fill up and last Summer I purchased LP gas for .99 cents a gallon, I bet next year it won’t be .99 cents. Guess what changed ?
I have a 500 Gal tank for my home. What does it take to fill my Motor home tank?
It is almost certain that the newly enacted changes in Federal drilling policy will cause all hydrocarbon fuel prices to rise dramatically over the next year, especially if the Dakota Access pipeline is shut. This will both raise crude oil prices and consume vast amounts of diesel fuel as that crude is transported by trains and trucks instead through the pipeline. Other oil producing countries are responding to the news by reducing their own production, so as to cause a world-wide spike in crude oil prices. 5-6 dollar per gallon gas prices are likely the norm within the next year. As propane users switch back to oil heat, diesel prices will rise even more. Many in the full-time RV community who do not have substantial financial resources may need to find a spot in a warm locale and stay put. Campgrounds will either have to raise their fees to compensate for the rise in electricity costs or we may see meters installed with a separate charge for electrical usage.
You are correct.
That’s the new president for you. One of his besties owns the railroad and trucking companies that will be hauling the crude oil.
I was under the impression this was for RV discussion not politics.
Well ya can’t go RV’ing without fuel and propane now can ya? This subject is a DIRECT connection.
Who is that, and what does he own?
Warren Buffett
You guys should quit getting all your alternative facts from Fox News and similar
“news” outlets.
Filled up gas in vehicle here in Michigan three weeks ago at $1.94 per gal. Yesterday gas was $2.57. Pipeline building is halted, Warren Buffet owns the RR’s transporting crude from Canada.
Thanks Joe, ah come on man!
Oh goodie. Another”crisis”. Nothing like starting the week with yet another doom report. Says I, while the heater roars in the background. No one told me being a retiree was going to be so rough.
Ain’t that the truth! Darn these crisis, time to fire up the grill and have brew or two or three, haha. Stay safe everyone.
Better buy blankets before the run on them when propane runs out. LOL
Here in Tennessee we are paying 3.39 $ a gal.at Tractor Supply.
One thing that did not help was the recent stopping of oil and gas exploration on Federal land, that makes us more dependent upon OPEC which is counter productive for America . America went from energy independent to energy dependent.
Might want to do more research on that….
Thanks Bill for your insight. Do people really believe that the Billion dollar oil companies will be unable to find more than enough oil and gas to line their pockets without using Federal Land? I can think of a lot more things that are much more counter productive for America but this is not the proper forum for those subjects. Stay safe, Stay well and Safe travels.
But you got your opinion in before saying this was not the place for it.
Here, in Yuma AZ it’s been $2.25 most all winter, until a few weeks ago it briefly went to $2.35, but a week later it dropped to $2.20, the lowest it’s been all winter.
So glad we got our home tank filled in the last couple weeks. Just before a serious cold snap – down to minus 12, with a few lesser sub zero nights on either side of it.
Can sell for double to other countries.
Our sticks-and-bricks is partly heated with propane and to that end we have a smallish 120-gallon residential tank. It is replenished semi-annually by our supplier based on temperature information. We had a delivery about 2 weeks ago.
Our RV is all-electric, but we do travel with a propane grill much of the time. We leave it at home in the winter because it takes a lot of gas to reach and sustain a good cooking temperature.
my N.Michigan house heats on propane. Last fill: $2.35/gallon
I wonder what will happen if Michigan shuts down Endbridge Line 5, Line 5 carries light crude oil and natural gas liquids, including propane, which power manufacturing, heat homes, and fuel our cars.
Hi, Bill.
Thank you for your post.
Just out of curiosity, how much propane do you use to last you the whole winter?
How many gallons approximately ?
Thank you.
Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!
Feb 2020: $2.35
Feb 2019: $2.50
We paid $4 last month, about 50 percent higher than our last top-off last year (30 lb tanks). This was at an Alabama Camping World (I know, I know) before another cold snap, and CW’s competitors were all out. CW’s price is usually high, but this was obvious gouging. Lesson learned.
I never understood the use of those patio heaters. The heat is above the tables and people sitting there, and everyone knows that heat rises so all they were doing is heating an area that no one can use.
Excuse me Eldon. Have you ever sat near or under one of those patio heaters when used properly?. We have and they work fine for their intended purpose. Yes heat rises but before it rises their are reflectors that heat the area below and around those patio heaters. That is called radiant heat. If all heat rises so no one can use it, how do people sitting around a camp fire feel warmth without being directly above it. Patio heaters, camp fires, fire places all provide radiant heat and provide warmth to those using them. Stay well, Stay safe and Safe travels.
Using these patio heaters is a stupid waste of fuel. Most of the heat rises and adds more hydrocarbons to the air. Propane is a valuable resource and should be treated as such. Remember all the outside gas lighting years ago that was shut down? Some places had 60 or more gas lights running 24 hours. Huge waste of gas, even if it was natural gas. Propane is wisely used for heating homes and drying crops. Get a life people. Dress for the cold. Lets not waste fuel in a 20 lbs tank of propane for running patio heaters.
They should put them under the table!
We arrived in Rockport TX yesterday with one of our two 30lb tanks empty. Temps will go sub-freezing for the next 2 days here so we ran out for a refill. Took us 3 stops to find some and a line waiting. The guy in front of me tried 6 places before landing at the Tractor Supply with us. Mostly drivin by the sudden cold weather in a heavy RV town.
Holding steady st $2.90/gal in Anchorage for the past 2 years.
Just paid $3.15 gal. bulk to fill the twin 100 gallon tanks. Ouch. I thought that was high until I see what others are paying. It never ends…
Get used to it. this is only the start.
Yes, thanks to biden !!!!!!!!!!!!!!!
Yeah, Biden has completely changed the world energy market in the three weeks he’s been president. Wow he’s good.
https://www.usatoday.com/story/news/factcheck/2021/01/30/fact-check-biden-orders-dont-completely-ban-fracking/4315441001/
Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!
Out in casa grande az a couple weeks ago propane was not to be found anywhere. Back to normal now. Where i get mine, same price as it was in December
SOMETHING TO TAKE THE EDGE OFF OF THIS NEWS
If this arctic cold lasts much longer, we’ll all have to go to hell to stay warm.
Well, that’s certainly a warming thought, Bob (as I’m looking out at more than a foot of snow and still snowing heavily here in the Seattle area). 😉 Stay warm, and stay healthy. 🙂 —Diane at RVtravel.com
I’m in northeast NY. It’s been colder than normal but I haven’t had much snow YET this month.
Hi, Bob in NE NY! I just heard on the news (on my 50-yeard-old portable radio that’s tuned to our local 24/7 news station) that there is severe winter weather in 47 states. Wow! This is supposedly turning to our usual rain tonight, so hopefully it won’t take too long to clear the roads. My ’97 T-bird, which is very front-heavy but is rear-wheel drive, has a mind of its own on slippery roads, so I won’t even go out. Good luck! Have a good evening/night. 😀 —Diane in the temporarily snowy Pacific Northwest
Yes Diane, it’s safer to just hunker down at home. I have a 4 wheel drive truck but it’s the other drivers I fear.
Thanks, Bob! That used to be my only concern, also, when I had a front-wheel drive vehicle that would do what I told it to do on the snow/ice. I didn’t have any problem driving it and was very comfortable doing so, except for my concern about the other drivers. But this ’97 T-bird definitely has a mind of its own! Have a warm and cozy night. 🙂 —Diane at RVtravel.com
Hell has frozen over here in Michigan (Hell, Michigan). When the water going over the falls at the dam freezes over, we consider Hell frozen over even though the water is still free flowing under the ice where you cannot see it.
I’ve been to (this) Hell and back – many years ago.
Stay safe, Joe
The irony of it all.
When politicians favor eliminating American energy independence, it in turn makes America dependent of foreign energy and the results are high prices. American vehicle manufacturers over the past decade have tossed passengers cars in favor of large pickups and SUV’s mostly due to cheap fuel. People have forgotten or are young enough to not remember $5 a gallon gasoline and diesel. It’s coming again and the market for large vehicles will tank like the 2008 housing market. Not to mention inflation as a result of shipping costs.
I can’t wait until they figure out that the plastic, that they make these electric cars out of, is a byproduct of oil refining.
No surprises here. I expected it. I’m sure energy prices will increase for the long term, partly due to energy policy.
Policy! That’s not policy, it’s science, just ask the experts. If he can remember the Q.
I am in Iowa and purchased a “summer fill” of propane in Aug. 2020 for $.90 per gallon.
On 2/9/2021 I purchased a fill the tank for $1.35 per gallon.
the driver tried to talk me out of filling the tank, but I said ” fill it”.
Glad I did, -20 F last nite and tonite also.
Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!
Thank you, Russ and Tina, for providing such an informative and well researched article. In a time when so little makes sense, you made sense of this one.
Who would ever had thought?
I’m in northeast NY. Had a delivery this morning (monday) at $1.75/gallon.
Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!
Thankyou OBiden!! Grrrrr Ugggg!!
https://www.usatoday.com/story/news/factcheck/2021/01/30/fact-check-biden-orders-dont-completely-ban-fracking/4315441001/
I am in Phoenix AZ and just paid $4.09 per gallon for propane for my motorhome.
My local distributor says that with the upcoming state and Federal Biden policies the price will continue to soar even into summer. Of course this is in “ILL”inois a grossly mis manged state of blue
Check the spot gasoline price. It’s on an upward trajectory since Nov. 3rd. Coincidence you say. Well, supply side economics, with shutting down the pipeline might be a factor as well.
Beware of what the nation didn’t vote for, because it’s coming to a theater (when their open) near you.
Tanks are hard to get in socal
Do I spot the Campbell Cove 1-stop fuel station on Industrial Blvd. in Lake Havasu City, AZ? 😀
Pres. Bidens ban on fracking will lead to dwindling supplies of propane, ethane, butane. Things will not be looking bright, thanks to that policy change by the federal government.
https://www.usatoday.com/story/news/factcheck/2021/01/30/fact-check-biden-orders-dont-completely-ban-fracking/4315441001/
When I was four years old, I asked my grandmother, “Where is Hell”? She said,
“We’re living in it”!!
That was 1951. My grandmother was born 1892!! Just stop and think what
she had seen of this world from 1800’s to 1951.
The other question that has been on my mind since 1951, why or how would
a boy of four years old ask such a question?