State officials were concerned about a propane shortage back in October.

And in recent weeks, politicians — both Republican and Democrat — have ramped up their shows of concern with state of emergency declarations, sent letters to the president, pumped more money into energy-assistance programs and eased rules to allow more propane to be transported over state roadways.

The effort has done little to lower the price of the fuel that is used largely by rural homeowners and business owners who continue to worry about their heating bills. Some qualify for energy assistance. Most do not.

“I doubt if I’m going to make it through (the winter). I have 280 gallons left on contract,” said Bruce Oradei, 79, a former Sun Prairie resident, who retired to Tomahawk in 2005. “Why are the big boys making all this money?”

A spot check of propane prices in southern Wisconsin this week showed a range of $2.99 in Lancaster, $4.50 in Boscobel and $3.99 in Cottage Grove. In northern Wisconsin, prices at some suppliers have hit $6 a gallon. Prior to the heating season, Oradei locked in 900 gallons of propane at $1.29 a gallon. If he needs to buy more it will cost him $4.99 a gallon from his supplier, who just lowered his price by $1 a gallon, he said.

The national average for a gallon of propane last week was $4.01 per gallon, an all-time high according to the U.S. Energy Information Administration.

An unusually cold winter combined with record propane exports and a wet fall that required Midwest farmers to use more propane than usual to dry their bumper corn crop have all contributed to the rising costs, according to the EIA. In addition, the 1,900-mile Kinder Morgan-owned Cochin pipeline that provides propane from Canada to several Midwest states was down for nearly two months, but it is back on line with a capacity of 50,000 barrels per day, according to the company.

On Jan. 25, Gov. Scott Walker declared a state of emergency due to the propane crisis and two days later ordered the Wisconsin Economic Development Authority and Wisconsin Housing and Economic Development Authority to create a combined $8 million guaranteed-loan program fund to help state propane dealers expand their lines of credit with wholesalers. He also released $8.5 million in energy assistance funds at that time.

On Friday, the entire Wisconsin congressional delegation sent a letter to President Barack Obama asking him to “lay out a plan to end the current crisis, and help ensure that it doesn’t happen again.”

This week, Walker and eight other governors from the Midwestern Governors Association sent a joint letter to the president. It asked that federal agencies “take every possible action to help increase propane supplies through every means of transport.”

Ken Moll, 57, lives near Pardeeville, and more than two weeks ago paid $4.24 a gallon to refill his propane tank. His bill came to more than $1,000 and although he is on disability, he doesn’t qualify for energy assistance. He’ll likely need more propane in another month.

“I’m concerned about what the price will be,” Moll said. “We didn’t budget for that. We’ll pay a little at a time, then we’ll get another bill so we’ll be that much farther behind.”

  • Covers regional and business news for the Wisconsin State Journal.

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(2) comments


The article says...

"State officials were concerned about a propane shortage back in October."

And what were those officials doing between October and February?

Mr Mellow
Mr Mellow

Farmers, pipelines, exports, and cold weather all sound like plausible factors for the steep rise in propane prices. But have you noticed that, except for the pipeline company, there seems to be no mention of the companies that produce (and export) the propane?

If this story was about a sudden spike in gasoline prices, we'd be hearing about (and from) the oil companies. The media and politicians would be asking them 'what's what' on this? But in the propane crisis, the media is reporting on the politicians, who are in turn declaring emergencies and using taxpayer money to aid a few people to help pay these high prices.

I can't help but wonder. Are we being conned?

Back in 2002 multiple corporations were found to be deliberately manipulating the supply and cost of electricity in California and other states in the Southwest US.

El Paso Energy was found to be illegally holding back natural gas supplies destined for electric power plants. Numerous power operators were found to be deliberately taking their generators offline to cause shortages. And energy traders at Enron were found to be illegally manipulating the electricity market to make huge profits off this artificially created crisis.

These actions caused large-scale blackouts, drove electricity prices up by 800%, and cost rate payers over $40B in overcharges. At the time, California's power plants had the ability to generate 45GW of electricity -- and the peak demand for that power was only 28GW.

During the crisis the shortages were blamed on soaring demand for electricity, hot weather, mismanagement of the state's deregulated energy market by California Governor Gray Davis (a Democrat), and according to Ken Lay, Enron's CEO, the "crazy people in California."

Makes you wonder...

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