Putting the pain in propane

[Mntn Man]

Today we doubled our propane price from $1.89 to $3.93. Tomorrow we probably will add another 60-80 cents. Most of our customers could barely afford 200 gallons before, now they'll really be in for a hurtin'. We would be over $4 already but we got lucky and got a load in today before the price change. I know most states are paying more than we have been here, I wonder how high they have gotten.

Thank God for dry oak in the stove, the ultimate in price protection!

 

[Coldfront]

With arctic vortex blast II on us a lot of people around here are going to really be hurting with the prices of propane. Home owners can charge, renters are COD. Some people will probably start burning there furniture for heat.

 

[hamish]

Arctic Vortex.............wow we used to just call it winter.
Stop reading, listening, to the news and social media. When you go outside and your ears are getting wet, say to yourself its raining. You go outside and your ears are cold, say to yourself its cold. It winter time, live with it. You will always stay warm cutting wood.

 

[Speed]

Not hard to believe, two weeks ago I was talking to a friend that runs a transport for a big fuel outfit in this area. Apparently they are barely staying ahead of the little delivery trucks. He said they have been running under emergency since beginning of December (read no log books) and state had just extended it again. Two weeks ago they had already moved more propane for the season than total gallons for last year.

Made me want to go home and hug my owb and my wood pile!!

 

[kyle1!]

It will be sticker shock that is for sure. I am down to 250 gallons.

 

[Johnny Yooper]

coworker mentioned today his brother in the area called for propane delivery for his large shop/business, and was quoted $4/gal. Geez Loueeze. He's now looking for an alternative heat source to get him thru the winter. First four years in this house were propane, put the OWB in back in '04 and 100% wood heat since, can't imagine going back. I gave my OWB and my Heritage stove in the living room pats today when I got home from work.

 

[Dogsout]

I am on my 3rd year with my OWB so LP cost not a factor with me now. Honestly though I don't feel very bad for anyone caught with their pants down when it could have been booked late last summer for $1.30 to $1.40 a gallon.

 

[SWI Don]

They are apparently only filling when really needed around here. No courtesy top offs to get another bill out.

 

[Mntn Man]

They are apparently only filling when really needed around here. No courtesy top offs to get another bill out.

Yes, we are limiting to 200 gallons, also.

 

[Fireaxman]

Keeping alternatives for heat seems to be more and more important. Putting some money down on alternative appliances in order to be able to make decisions based on BTU per gallon and availability can be worthwhile in the long run, if you have the luxury of the available capital. Right now 135,000 BTU per gallon on Kerosene for $5 a gallon vs 91,500 BTU per gallon Propane for $3.95 a gallon has me burning Kerosene (but mostly wood of course). Have recently seen Kerosene at $8 a gallon and Propane at $3.50, burned Propane. Really feel for those folks just making it day to day. Then I see these folks with these monster, ostentatious houses in the fancy subdivisions throwing energy away heating 10,000 square feet of mostly empty rooms. Seems like an awful waste, and inflates the value of fuel for those of us with more modest homes.

Guess some poor soul in China living in a 50 square foot "Apartment" could say the same thing about me though. Nobody guarantees life to be "Fair".

 

[DavidBrown1212]

I can't possibly comprehend this, I have literally pulled so much of this stuff out the ground in the past year, we don't know how to handle it. Crazy.

 

[flyboy553]

$5.26 per gallon here in MN as of an hour ago. And this is at the cheapest place around these parts. And, a 200 gallon Minimum.

Ted

 

[Dalmatian90]

I smell market / financial manipulation -- I'm not blaming the local companies. But this smacks of the stuff Enron and later J.P. Morgan pulled in the California electric market

I don't have a problem with using prices to control demand.

Rationing is another way to deal with limited supplies.

But when you're doing both -- jacking up prices AND rationing, that ain't capitalism and that ain't a market economy folks...that's a criminal enterprise.

 

[DavidBrown1212]

So true, millions of cubic feet are flowing from wells all over north America. I don't get it....

 

[Fireaxman]

So true, millions of cubic feet are flowing from wells all over north America. I don't get it....

Complicated situation. I don't say price manipulation does not occur, but there are other reasons. Demand is way up. The Federal requirement to put ethanol in gasoline has increased demand for corn. A lot of corn is dried with propane. The Japanese have shut down their nuclear reactors. Now they are using a lot of LNG to generate electricity. Asian exports are up, and expected to increase further. The first "Polar Vortex" used up a loarge percentge of existing supplies, leading to a supply shortage for the second "Polar Vortex". Shale Gas Production has greatly increased the volume of Natural Gas available, and Natural Gas prices have fallen accordingly, but Propane is not "Natural" gas. Natural Gas is mostly methane, and methane is not as easily liquefied and exported as Propane. Since Propane is more easily transported than Natural Gas it is in higher demand, particularly in locations that are not close to any Natural Gas pipelines (like Japan)

Propane is a component of Natural Gas and crude oil, but it must be processed out of the raw material by a refinery or cryogenics plant. Refinery capacities and proximity to refineries therefor add another variable.

Stock piling during periods of low demand seems to have a good risk/benefit ratio to me. Next summer I plan to set a little extra aside.

 

[jimmycrackcorn]

So true, millions of cubic feet are flowing from wells all over north America. I don't get it....

It's called greed... These corporate CEO's & tycoons only care about profit. The harder it is on the GP just means they are making more $$. When these PPL rake in big profits for the company they get bonuses, raises, ect.. These PPL don't have any incentive to help lower the costs, it's not in there benifet to do so. It's become the norm so to say.
For example, the regular Joe Schmo working for Fuel Company is most likely affected by big fuel costs. As he climbs the Corporate ladder in his career he starts buying into the corporate culture, why? Because he is getting raises, bonuses, etc for making the company $$. The more he can manipulate the fuel costs the more his well being advances & once there is a standard benchmark in place for the usual company profits it never encouraged to go backwards, that is unless joe schmo wants to lose what he has gained in life. Joe Schmo is now not feeling the costs of fuel because he is a millionare & could care less about the GP he was once apart of. It's the whole corporate mentality behind astronomical prices. They do try to find ways of cutting costs, but it is only to better profit, never to lower the set standard the GP is now used to. The only way they will be significantly lowered is if the gov steps in & we all know what happens when they put they're hands into stuff.

I can remember fuel being 99 cents back in 1998-99'. Diesel was even less. My parents remember it down around 25cents or lower when they were young. From the 1940's to 2000' it goes up about 75 cents over 50 years.. That's reasonable with inflation. But from 2000 till when it skyrocketed a few years back to over 4 bucks a gallon?!?! In the course of 5-8 years? That's not inflation that is pure greed!! Something needs to give...

That's just my take on it..

Sent from my Nexus 4 using Tapatalk

 

[Dalmatian90]

For example, the regular Joe Schmo working for Fuel Company is most likely affected by big fuel costs. As he climbs the Corporate ladder in his career he starts buying into the corporate culture, why? Because he is getting raises, bonuses, etc for making the company $$. The more he can manipulate the fuel costs

Oh, I bet you'll find little of this is being done at the driller / refiner / distributor level.

You can break down the commodities markets into three groups --

Legitimate hedgers: Folks who produce or consume. The producers are willing to take a little bit less money than they might make in exchange for a certain sale, the consumers are willing to pay a bit more (or sooner) than they possibly could get away with in exchange for a certain supply.

Traditional speculators: Folks who don't make it, couldn't take delivery...but would contribute a *modest* amount of money to keep the market rails greased. They traded personally on the exchange floors, often with a lot of skin in the game...screw up to many times and you're personally bankrupt and out of the game. Banks could be in the markets, but had strict limits on just how much they could have in any given area.

Scumbag speculatos: These folks started moving into all the commodity markets big time over the last 15 years or so as computers were developed that could handle large volumes of trades and limits on speculation were removed by the market boards. They trade by computer, with other peoples money. Enron. J.P. Morgan and the rest of the big banks. They bring big money, they tend to only buy long...and have enough cash to create a self-fulfilling prophecy where prices always rise -- i.e. they're cornering the market by buying enough of the producer's supplies on paper they can force the consumers to pay more. Made even easier when the Fed has "Quantitative Easing" and prints money to hand to banks that are playing in the markets.

 

[DavidBrown1212]

I think Dalmation hit it on the head. LNG is a byproduct of normal Natural gas refining, nothing special has to be done to reclaim it. I remember last year when we hit peak production, and bottom fell out of raw gas, the price fell 55% in a few months, and our new wells got shut off. They are still off, and gas prices on the wholesale are still crap. Screw the Keystone, we need pipelines from the fields to metro America.

 

[Locust Cutter]

I may plant another tank for now just to make stocking up easier. In the long run, I will either buy and install another wood stove, or I will buy and install a large OWB than can heat my house and the garage that I will be building in the next few years and keep my current stove for augmentation and fire enjoyment as desired.

 

[hangfirew8]

So true, millions of cubic feet are flowing from wells all over north America. I don't get it....

That's Natural Gas, which is cheap right noe. Propane is a byproduct of gasoline production.

HF