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OPINION - How serious is this shortage?

by Chris Conley

NEWS BLOG (WSAU)  It's a more serious emergency than we realize. 

There are some reports that the propane crisis is going beyond mere supply and demand and may enter a new phase where just getting supplied is impossible. Already propane distributors are seeing their reserves go low. (They also have to pay the much higher spot price.) There are already reports of rationing -- where the dealer won't fill up a tank even if the customer can afford it, in the name of being able to bring something to everyone who depends on it as a source of heat. We'll know if there are full blown supply shortages in a few days. Governor Walker may give us some clues on Monday.

Imagine the crisis if some people can't get their tanks re-filled. There's no way they could stay in their homes... the temperatures would drop below freezing in a few hours. They'd need to seek shelter with family or friends, or community warming centers would be needed. After 12 hours or so, their pipes would freeze. That would cause catastrophic damage to a home. And consider that many of the 250,000 people who heat with propane live in trailers, mobile homes, or prefabricated housing. Many of these dwellings aren't insured to the same standards as other houses; and there's no one who can cover a burst pipe out-of-pocket.

Already some rural schools in Tennessee and Kentucky has closed because they can't get enough propane to heat their buildings. Some suppliers say they can't afford to honor guarantee contracts; the higher wholesale cost of propane would put them out of business if their customers paid the price they supposedly locked in at the beginning of the heating season. And we don't have a strategic reserve of propane like we do for crude oil, and the suggestions so far -- like lifting some of the trucking restrictions to get more supplies into the state -- are probably inadequate. This will be a white-knuckle cold snap for people who've never seen this kind of supply problem in their lifetimes.


Chris Conley
1.26.14


Image: Propane tanks are connected and inspected as preparations are made for final approval at this FEMA temporary housing site at Harrell Stadium in New Orleans. Victims of Hurricane Katrina displaced from their homes by the storm will be moving into these 102 trailers. Robert Kaufmann/FEMA  via Wikicommons.com