By LOU WILIN
Arctic cold, distribution problems, and a booming export market have left thousands of northwestern Ohio residents short on propane to warm their homes.
Prism Propane, in North Baltimore, is rationing the fuel to its 3,600 customers in Hancock, Wood and neighboring counties. Prism is a subsidiary of Hancock-Wood Electric Cooperative.
Prism is filling customers’ tanks to only 30 percent of capacity, Prism Chief Operating Officer George Walton said Wednesday. The company has urged customers to set thermostats no higher than 64 degrees, and to find other heating sources, like electric heaters.
The propane shortage is described as regional, not national. But it is affecting hundreds of thousands of households in 24 states, and has caused propane prices to spike in affected areas.
The U.S. Energy Information Administration reports that residential propane prices in Ohio averaged $2.95 a gallon last week, up 65 cents a gallon from a year ago.
Some fuel suppliers in the Upper Midwest and East are taking the desperate step of trucking propane from other states. Retailers like Prism are having trouble finding available truckers.
But it is the only option these days. So Prism and other area propane retailers are scrambling to find truckers to haul propane from South and North Carolina, Virginia and Kansas. Walton plans to call Texas today.
Walton is worried, with more dangerously cold weather in the forecast.
“If we get some severe temperatures, sustained over a long period of time … I don’t know how long we can continue this and keep adequate gas supply out there to our customers, to keep them with heat,” Walton said. “There is a chance that we could run out of supply.”
The crisis will extend through February, and could go through the entire heating season, Walton said.
Ohio Gov. John Kasich has declared an energy emergency for Ohio. That waives state limits on working hours for propane and heating oil truckers. It also would enable Kasich to employ the Ohio National Guard to help transport fuel or to “take whatever actions are necessary” to keep people safe.
Normally, Prism buys propane from multiple Ohio suppliers, Walton said.
Several factors are to blame for the fuel shortage, he said.
More than the usual amount of propane was used to dry an abundant and unusually wet grain harvest.
Also, flow in a major pipeline, which runs south and east from Canada into Chicago and northwestern Ohio, was reversed “to accommodate other products going in the opposite direction,” Walton said.
The North American oil boom appears to have crowded out propane from other pipeline and rail routes.
“Some of the pipelines that historically have brought more gas into this part of the country, some of the pipeline capacity was reallocated to other products … one example, shale gas,” Walton said.
In addition, oil refiners wanting access to cheap mid-continent crude are using railroads to overcome pipeline bottlenecks. Propane has been pushed aside, Walton said.
But he was quick to say other factors are involved, too.
Propane wholesalers are smashing their export record. Seven times as much propane is being exported this year as in past years, he said.
“That bothers me. If we are struggling to try to provide propane to our heating customers, then why are we shipping propane to China?” Walton said. “Our money’s good here. It’s just as good as China’s money.”
Walton is calling for President Barack Obama and Congress to intervene.
“It’s a crisis and a major crisis,” Walton said.
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