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Supply and demand: Cold snaps hammer propane industry, create long hours

Cold snap worsened issue

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As the Tri-State faces another round of bitter cold and snow, the propane industry is preparing for long hours and high demand.

“We've been busy working five, sometimes six days a week,” said Tony Wade, who delivers propane to residential customers. “It's slowed down since we got caught up from the last little cold blast that we had.  I'm sure this time next week, it will be pretty busy again.”

That last blast occurred in late December, when temperatures dipped below zero, with wind chills reaching 20 below zero.

Current weather models predict a longer cold blast, and more snow, throughout the week.

FORECAST: Winter Storm Warning & Advisory, several inches of snow expected

In preparation for that Ohio Governor John Kasich declared a state of emergency on Jan. 18, extending the amount of time drivers can be on the road delivering heating propane to homes and suppliers.

Typically, drivers can only spend 10-hours per day behind the wheel.

“This will help get propane companies resupplied so Ohioans who use propane to heat their homes can stay warm, while also doing it safely," Kasich said.

Federal regulators followed suit on Monday for a 10 state region, bringing more heating gas into the state.

The current problem, according to Ohio Propane Gas Association Executive Vice President David Fields, has more to do with delivery system than demand.

During a five-year period from 2008 through 2013, U.S. propane production increased by 2.6 billion gallons, according to Fields. Pipelines, vehicle delivery, and regulation have yet to catch up to the increased output.

“OPGA applauds Governor John Kasich’s proclamation declaring a state of energy emergency waiving regulations relating to motor carriers and drivers transporting propane and heating oil,” Field said.

Besides, getting critical home heating supplies to customers, some hope for another positive side effect to the deregulation – a decrease in price.

Doug Auxier, owner of Auxier Gas, says he’s seen a $.65 increase per gallon for the price of propane over the past month.

“It’s gone up from $2 per gallon to about $2.65 per gallon,” Auxier said.

That meant a $1,100 bill for 400 gallons of propane for Rick Winchester on Monday.

"It's going to fluctuate,” he said. “What can we do about it? If we deregulate a little bit, maybe the prices will come down."

Copyright 2014 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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