Valley Feels Propane Shortage

But Suppliers Say They Can Meet Demand

Posted: January 29, 2014

Rockingham Petroleum Cooperative employee Adam Shank unhooks a hose from a truck at the cooperative’s supply station in Harrisonburg on Tuesday. (Photo by Michael Reilly / DN-R)

HARRISONBURG — Local energy companies are feeling the pinch of a nationwide propane shortage but officials say tanks won’t run dry as long as people don’t panic.

A perfect storm of sorts came together in recent months to cause what Chris Earhart of Dixie Oil and Gas says is the biggest shortage he’s seen since 1989.

A late, wet corn harvest in the Midwest sucked up more supplies than usual as farmers used liquefied petroleum, or propane, to dry their crops.

That was followed shortly after by several severe cold snaps that sent large swaths of the country into a deep freeze, including in the Harrisonburg area, where a wind chill advisory remains in effect until noon today.

The wind chill factor was expected to send overnight lows below zero in the Valley, and much of the Midwest and Northeast has seen even harsher temperatures throughout the winter.

Increased demand coupled with a tight supply caused by the corn harvest is driving up prices and stretching supplies thin.

As of Jan. 20, the average cost per gallon of residential propane in the U.S. reached $2.96 per gallon, up 10 cents from the previous week and 68 cents higher than the same period last year, according to the U.S. Energy Information Administration.

Wholesale prices increased nearly 41 cents per gallon in the same period to settle at $2.11.

Government leaders throughout the Midwest are calling for relief, with states of emergency being declared in Wisconsin, Ohio, Maine, Michigan and Minnesota.

In Arkansas, the price reached nearly $4 a gallon and is rumored to potentially hit $5, according to published reports and threatening to hit the poultry industry with cuts in bird production.

But propane consumers in the Shenandoah Valley should keep their cool throughout the shortage, according to Earhart, president and chief executive officer of Verona-based Dixie Oil and Gas, and Irvin Armentrout, general manager of Rockingham Petroleum Cooperative, a Southern States affiliate in Harrisonburg.

Earhart and Armentrout say they should continue to be able to meet customers’ needs.

But problems could arise, they said, if people panic and buy more propane than they actually need, causing a run on the fuel.

“Right now our supplies are adequate, our inventories are good, and we’re on schedule, but we’ve seen a record demand. And it’s continuing for a while,” Earhart said. “We’re just continuing to try to look prudently to the future to make sure we take care of everybody, which is what we’re planning to do.”

Armentrout raised concerns that the way the shortage is portrayed in the media could exacerbate the situation.

“I think all of the suppliers in this area are in the same boat, and we’ll all keep our heads above water as long as we meet true demand and not exaggerated demand,” he said.

Jim Bowman, energy assistance specialist with the Harrisonburg-Rockingham County Department of Social Services, said the shortage has not affected the suppliers for its fuel assistance program.

For this winter season, 2,190 households were approved for heating assistance, a slight decrease from the season before, Bowman said.

The unusually cold winter has caused a spike in requests for aid through Social Services crisis program, Bowman said, though figures aren’t yet available to compare to last winter.

Earhart said the energy industry is making a concerted effort to keep homes and businesses warm.

“Everyone in the industry is working as hard as they can to take care of people,” he said. “I don’t care if it’s me or my competitor or my neighbor, and that’s our goal.”

Contact Jeremy Hunt at 574-6273 or jhunt@dnronline.com



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