I hope you have not been hit by the recent spike in propane gas prices, If so, I wanted to share some information so that you may protect yourself as much as possible. The leading cause of the price spike is lack of supply; however, it seems to be easing a bit.
The supply pinch began in the fall. A short growing season coupled with an unusual harvest when crops did not dry down in the fields placed a heavy demand on propane at the beginning of the season. As we all know, this winter has been one of drastic changes and days of very cold temperatures. The high winds and these low temperatures have also placed a strain on supply, but there is more to the story.
For every action there is an equal and opposite reaction, this holds true in physics and economics. The U.S. has been making great strides in producing energy during the last few years, and our exports in this industry are increasing. Exports in propane nearly quadrupled from last year, and although this helps our national balance sheet, it also helped to contribute to this year's shortage. Obviously, the U.S. selling to other countries is a good thing (it creates jobs and is a positive trade flow), but apparently the propane industry was not prepared for the volume of exports this year. Hopefully, this will be addressed in the future. In the meantime, there are a few options to help ease the supply situation immediately.
Texas has temporarily waived some of its inspection requirements to provide for more transport trucks into and out of the state. The Missouri Propane Gas Association is trying to get the federal government to allow a temporary increase in weight for trucks on interstate trips. Finally, the industry has asked the federal government to make modifications to the Jones Act so that sufficient volume of propane will be held for domestic use before exporting begins. Needless to say, there is no perfect solution for making markets work to our liking, but businesses plan, and hopefully this year has been a lesson.
What can you do? Keep an eye on your tank and be certain to keep a sufficient amount available for your heating needs. However, if you need to buy, buy in smaller quantities for the immediate future. Prices have already modified to some degree, so keep watch on the market and buy when the price is favorable to you (or as favorable as it will get for the short term).
Finally, I understand the industry is devoting more pipeline capacity to propane, so this should also help in getting us to spring. Pipelines share capacity between gasoline, propane, and other products, so the increase will help ease the immediate situation, but obviously at the expense of not moving other products. Again, every action has an equal and opposite reaction.
I wish I had better news, but hopefully this report provides a better understanding of the situation. Please use your best judgment and try to buy at your advantage. Senator Mike Parson is leading an investigation into this problem, so we should have some better answers, and understanding, in the future.
It is an honor to serve the 51st District in the Missouri House of Representatives. Each week I will issue a capitol report to keep you informed of activities in Jefferson City and Missouri. Any concerns or issues you might have are of great interest to me. I look forward to your input and thoughts, so please feel free to contact me at any time if you have questions, concerns, or ideas to improve our state government and the quality of life for all Missourians. My telephone number is 573-751-2204 or you may contact me by email at firstname.lastname@example.org. Thank you for working with me to make Missouri a great place to live.