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Area propane supplies said stable for now

Posted on Tuesday, February 11, 2014 at 11:17 am

02-11-14 Propane TanksIn response to concerns about limited access to propane in the face of relentless winter weather, Gov. Bill Haslam last week issued an executive order to ease problems delivering the gas.

Several families in Moore County, especially in the more rural areas, depend on propane to heat their homes.

In early January the much-ballyhooed “polar vortex” sent temperatures plummeting in the Midwest, Northeast and even parts of the South. With frigid temperatures just starting to ease up, suppliers have been rationing propane and officials are urging consumers to conserve fuel. About 6 million households nationwide, including many in rural areas, use propane to heat their homes.

During the recent band of cold weather — which has seemed to develop a pattern of stringing together multiple sub-freezing days with a few warm days stowed here and there — Clark Gas Co., the only propane company with an office here in Lynchburg, began limiting its customers to 100 gallons of propane per delivery.

That’s not an uncommon practice, especially when winter cold stretches come at a rapid-fire pace.

Tommy Bible, general manager of the Jefferson-Cocke County Utility District (JCCUD) in East Tennessee, said his company has done the same.

“On a residential side, we’re limiting deliveries to our customers to 125 gallons per customer. Just to make sure we can take care of everybody in our service area,” said Bible, who has approximately 5,000 customers in this service area.

A spokesperson for Clark Gas said the current turnaround is approximately 24 to 48 hours for their customers. That also depends on how much propane their customers have remaining in their tanks.

Often, transporting the propane can be the biggest challenge. Haslam declared a state of emergency to temporarily lift federal restrictions on propane delivery drivers, allowing those drivers to work additional hours to ensure supplies reach areas with limited amounts of fuel.

Federal regulations limit drivers who transport hazardous materials to an 11-hour workday with at least 10 hours between shifts, but as arctic air continued to blast across the nation, getting propane to Tennessee residents who need it to heat their homes was a priority.

Brett Henley at Henley Propane in Manchester said that challenge is only compounded by the same harsh weather that’s causing a peak in demand.

“Supplies east of the Mississippi are running low because it’s been so cold in the northeast they started trucking gas up. Now the manufacturing facility in Mont Belvieu, Texas, is beyond its capability. It can’t keep up.”

“It’s a bad, bad situation.”

Bible added that he is concerned about the sharply rising price of propane.

“We have never seen them raise … go up 50 percent within a week on the propane side,” he said. “Certainly we’ve seen high prices before, as far as spiking and they’ve been a little bit higher than where they are right now, but this came so quickly.”

To further help connect consumers with suppliers, the Department of Commerce and Insurance has waived the requirement that propane dealers fill only their own tanks. For the duration of the state emergency, dealers of propane will be allowed to fill or refill a container belonging to another dealer.

While no area dealers are reporting a critical shortage, few are willing to run the risk of depleting the supply that serves their customers in order to fill the containers of their competitors.

Henley says, “We do have enough to supply our customers. In the long term, I don’t know.”

Propane stocks are down 42 percent from a year ago and the average residential price, $2.96 per gallon, is 68 cents higher than a year ago — the highest since the U.S. Energy Information Administration began tracking prices in 1990.
Still, the Propane Education and Research Council insists there is no shortage.

“The supply of propane is not a problem. In fact, the United States is producing more propane now than at any time in decades,” the Council said in a prepared statement.

That increased production, however, has been offset by a confluence of events: a Midwest pipeline being shut down for maintenance, a high demand for propane last fall to dry a rain-soaked harvest of corn — farmers use propane to dry crops and tapped more supplies than usual thanks to the huge harvest and above-average rainfall — competition for pipelines and rail cars caused by increased oil and natural gas production — and the extreme cold.

As a result, strong demand has lowered already-low inventories in many parts of the country.

The problem then, according to Jeff Petrash, general counsel for the National Propane Gas Association, is getting the propane supply we do have on hand to the places where it needs to be. Texas, which produces two-thirds of the nation’s propane, has received calls from as far away as Maine for fuel, according to the Texas Propane Gas Association.

“I prefer not to call it a shortage,” said Simon Bowman, a spokesman for Pennsylvania-based AmeriGas, the nation’s largest propane retailer. “I prefer to call it tight supply. There is propane to be had, but it’s just having problems getting to some of the areas of the Midwest and Northeast.”

Unless more arctic blasts swing this far south again, for now, this part of Middle Tennessee appears stable as far as supply and demand are concerned, according to officials.

—By KELLY LAPCZYNSKI, Tullahoma News Staff Writer (WBIR-Newport and Moore County News Publisher Robert Holman contributed to this story)

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