Thursday, September 16, 2021
Thursday, September 16, 2021

Propane shortages. Skyrocketing prices. Problems ahead?

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

amazon.com

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

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A.C. Ratone
4 months ago

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.

Lee Ensminger
5 months ago

Do I spot the Campbell Cove 1-stop fuel station on Industrial Blvd. in Lake Havasu City, AZ? 😀 

Downthecreek
5 months ago

Tanks are hard to get in socal

FRED TONNE
6 months ago

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

BILLY Bob Thronton
6 months ago
Reply to  FRED TONNE

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.

Joseph Eafrati
6 months ago

I am in Phoenix AZ and just paid $4.09 per gallon for propane for my motorhome.

Last edited 6 months ago by Joseph Eafrati
Bill N Stacey
6 months ago

Thankyou OBiden!! Grrrrr Ugggg!!

Bob Weinfurt
7 months ago

I’m in northeast NY. Had a delivery this morning (monday) at $1.75/gallon.

Robert
7 months ago
Reply to  Bob Weinfurt

Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!

Darian
7 months ago

Who would ever had thought?

Michael Theis
7 months ago

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.

Dave H.
7 months ago

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.

Robert
7 months ago
Reply to  Dave H.

Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!


Dave
7 months ago

No surprises here. I expected it. I’m sure energy prices will increase for the long term, partly due to energy policy.

BILLY Bob Thronton
6 months ago
Reply to  Dave

Policy! That’s not policy, it’s science, just ask the experts. If he can remember the Q.

GeorgeB
7 months ago

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.

Gerald Terence Wainwright
6 months ago
Reply to  GeorgeB

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.

Bob Weinfurt
7 months ago

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.

Admin
RV Staff (@rvstaff)
7 months ago
Reply to  Bob Weinfurt

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

Last edited 7 months ago by RV Staff
Bob Weinfurt
7 months ago
Reply to  RV Staff

I’m in northeast NY. It’s been colder than normal but I haven’t had much snow YET this month.

Admin
RV Staff (@rvstaff)
7 months ago
Reply to  Bob Weinfurt

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

Bob Weinfurt
7 months ago
Reply to  RV Staff

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.

Admin
RV Staff (@rvstaff)
7 months ago
Reply to  Bob Weinfurt

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

Gordy B
7 months ago
Reply to  Bob Weinfurt

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.

Joseph
7 months ago
Reply to  Gordy B

I’ve been to (this) Hell and back – many years ago.

Stay safe, Joe

Gerald Terence Wainwright
6 months ago
Reply to  Bob Weinfurt

The irony of it all.

Thomas D
7 months ago

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

CHipper146
7 months ago

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…

Gary Arsenault
7 months ago
Reply to  CHipper146

Get used to it. this is only the start.

ken
7 months ago
Reply to  Gary Arsenault

Yes, thanks to biden !!!!!!!!!!!!!!!

Eric
6 months ago
Reply to  ken

Yeah, Biden has completely changed the world energy market in the three weeks he’s been president. Wow he’s good.

Robert
7 months ago
Reply to  CHipper146

Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!

Gene
7 months ago

Holding steady st $2.90/gal in Anchorage for the past 2 years.

Tony Grigg
7 months ago

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.

Eldon
7 months ago

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.

Dick & Sandy from near Buffalo, NY now in Florida
7 months ago
Reply to  Eldon

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.

Bobby
7 months ago
Reply to  Eldon

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.

Mike Sherman
7 months ago
Reply to  Bobby

They should put them under the table!

In the Woods
7 months ago

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.

Bill semion
7 months ago

my N.Michigan house heats on propane. Last fill: $2.35/gallon

Les Rohrig
7 months ago
Reply to  Bill semion

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.

Darian
7 months ago
Reply to  Bill semion

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.

Robert
7 months ago
Reply to  Bill semion

Holy crap!! Our propane guy JUST left, 375 gallons at $2.85 a gallon!!!
Feb 2020: $2.35
Feb 2019: $2.50

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