January 24, 2014 at 2:19 p.m.
Sticker shock: Propane shortage raising prices, concerns
Local businesses and residents reeling
Sticker shock: Propane shortage raising prices, concerns
However, that's precisely what is occurring over a large part of the United States, with the wide-ranging effects taking a large toll on residents and businesses across the nation and here in the Northwoods.
As of Friday, propane prices in the Lakeland area ranged anywhere from $4.70 to $6.29 per gallon.
At Amerigas in Rhinelander, the price being charged this morning ranged from $5.25 to $5.75 per gallon.
"We just got a shipment in," a spokesperson there said. "That price will change by the end of the day."
Several factors cause shortage
The shortage is being blamed on several factors:
• A high demand brought on by the wet agricultural season in the fall as a much larger amount of propane than usual was used to dry crops in 2013;
• The early onset of a long, bitterly cold winter; and
• Issues with a new pipeline running from Canada's northwest territory to the Midwest.
Politicians and propane gas associations at the national and state levels are working to try and bring relief to those who are being hit hard by the uptick in propane prices in just the last several days.
The latest statement from the Wisconsin Propane Gas Association doesn't offer much hope for a short-term solution.
"We are in a crisis and there is no short-term solution," the WPGA statement reads. "While domestic production of propane is at some of the highest levels ever, over half of our states are affected by this shortage. Storage supply is significantly down and tankers are accessing propane by loading from the pipeline."
The WPGA statement goes on to point out two other factors affecting the distribution issue.
"Many point to unlimited export of propane and a railroad system unable to deliver tanker cars when promised as two of the root causes of the problem," the statement reads.
State response
According to an Associated Press report, Gov. Scott Walker said he will be gathering stakeholders on Monday to discuss a shortage of propane heating fuel in Wisconsin.
Walker said Thursday there is no quick fix to the shortage hitting many regions nationwide and sending prices for propane and natural gas to record highs.
Republican state Sen. Dale Schultz on Wednesday asked Walker to use some of the state's surplus revenue to address the issue, but Walker says more money will not have an impact.
According to the Energy Department 5.5 million U.S. households heat with propane, mostly in the Midwest and South.
Feeling the pinch
As efforts are being made to try and alleviate the causes, the high price of propane - which just several weeks ago was less than $3 per-gallon in many places in the Lakeland area and is now more than $6 per gallon - is hitting people's pocketbooks.
On Jan. 18, one area resident paid $2.86 per gallon for propane.
That price compares to propane gas prices that could go higher than the $6.29 per gallon at Krist Oil as of Friday morning.
Another area resident, John Tegtmier, is retired and lives in Lac du Flambeau.
Tegtmier said he has a 500-gallon propane tank now and is considering the purchase of a 1,000 gallon tank.
"I wanted to get a 1,000 gallon tank so I wouldn't have any issues," he said. "At least you would know [in normal conditions] what it would cost you to get through the winter."
Tegtmier said he called his propane supplier, Ritchie Oil of Minocqua, Friday morning and was told propane was at $6 per gallon.
"So, we are trying to keep the temperature down in the house as far as we can," he said. "I have a wood stove cranked up as high as I can get it. Hopefully, we can make it through."
At Sister's Saloon near St. Germain, owner Cherie Anderson said the effect on her business "is horrible."
"I'm on keep-fill and in the last two weeks, my bill has been $1,800," she said. "That's for like the last month of propane. It should be less than half that."
Hilgy's LP Gas, based in Tomahawk, is Anderson's supplier. They referred all media inquiries to the WPGA, as did Amerigas in Rhinelander.
"It's crazy," Anderson said. "I mean, what are people going to do?"
And that 1,000-gallon tank John Tegtmier was thinking about buying? He's still considering it.
"It's going to change my behavior relative to propane," he said. "If this is a harbinger of things to come."
Brian Jopek may be reached at [email protected].
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