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SE Minnesota | Excerpts from an article received here:
Propane supplies are tight through the Corn Belt and really tight in
some states. The culprit is a wet corn crop that has stoked demand for
the heating fuel used in mechanical crop dryers. And some pipelines got
overwhelmed by the surge in demand and started clamping down on terminal
liftings. Meanwhile, truckers seeing long lines at the pipelines have
been
roaming far afield to pick up loads. They have sometimes crossed as many
as two state borders to pick up propane.
The demand for propane hit fast and hard. So far, the supply pinch has
been particularly acute in Iowa, Minnesota and Illinois, said one
propane distributor. Pipeline terminals saw local stocks quickly drained
yet the trucks kept lining up. Once a terminal's local supply has been
exhausted, the truck loading rate slows dramatically. The trucks can be
filled only at the rate that propane moves along the line. That's a
slower rate than just filling trucks from local tanks.
Local propane prices have spiked in some cases. The rise in local
propane prices seems to be more a reaction to the tight supply situation
and added transportation costs rather than manipulation, say propane
distributors. Because lines have been so long at terminals, propane
distributors have been sending transport trucks a state or two away to
pick up loads. It can be quicker and cheaper to send an empty truck an
extra hour or two from Iowa to Missouri, for instance, rather than wait
hours in line at a terminal.
But the government is also keeping a heightened watch on things.
Acknowledging the market is facing some extreme conditions, Senator
Chuck Grassley (R-Iowa) has asked the Federal Trade Commission to watch
for signs of anti-competitive behavior among propane suppliers.
Propane marketers say that the supply tightness and price strength are
reflective of extreme market conditions.
When the pipelines have a chance to catch up and there are more reports
that truck lines are shrinking, the local
prices will retreat.
That said, given the delay to the harvest and the wetness of the crop,
propane dealers are expecting that crop-drying demand will continue well
into December.
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price of propane
