Allied Cooperative Addresses Propane Shortage

A propane shortage and extreme cold weather is raising concerns from local residents who rely on propane to heat their homes. Our 10 day weather forecast calls for temperatures that are well below average, and the Midwest propane inventories are down 39.4% over last year at this time.  With very high demand and short supply, prices continue to set all-time highs.

“Our cost per gallon has risen in direct correlation with our cost per gallon at the terminals,” said Dianne Schubert, Allied Cooperative’s LP Operations Manager. “All terminals are on allocation, which means propane suppliers are only allowed to pull a set number of loads per day.”

The tight supply is due to several factors.  Farmers used more propane than usual to dry the late harvest of grain that came out of the fields too wet.  Home heating customers dipped into propane supplies early due to colder than normal temperatures. And the Cochin pipeline that carries propane to the Midwest from Canada closed for several weeks, stalling supply to the region.

“We are taking proactive measures to ensure that we meet our customer’s needs this winter,” said Schubert.  “Unfortunately, the price is an issue that hurts all of our pocketbooks, and one that retailers like ourselves have very little control over.”

Allied Cooperative urges propane users to take steps to conserve fuel, keep track of their tank levels and allow for delivery time. Some suggested steps for fuel conservation include:

  • Make reasonable thermostat adjustments and consider purchasing a programmable thermostat to adjust heat levels downward when no one’s home.
  • Wrap propane water heaters with an insulating jacket, being careful not to cover the thermostat, the water heater’s top, bottom, or burner compartment. Insulate the first six feet of the heater’s hot and cold water pipes.
  • Increase the efficiency of a hot water heater by draining about a quart of water from the bottom drain valve every three months to remove accumulated sediments.
  • Replace dirty furnace filters.
  • Consider using weather stripping around leaky windows and doors. Use inexpensive plastic window sheeting to seal drafty windows.
  • Make sure heat vents, registers, and radiators are free of dust or other obstructions.
  • Close window coverings in the evening and open south-facing window coverings during the day.
  • Use less hot water or lower the water heater thermostat to reduce propane usage.  According to the U.S. Department of Energy, turning a water heater down from 120° F to 115° F can reduce hot water-related propane consumption by as much as 10 percent.

Energy assistance is an important tool for people that need it.  For more information on Wisconsin’s energy assistance programs go to http://homeenergyplus.wi.gov.  For tips on conservation methods that can help your reduce your propane usage, visit Allied Cooperative’s website at www.allied.coop.

Allied Cooperative is a $225 million cooperative with services ranging from agronomy, feed and grain to LP and refined fuels to auto parts, hardware, tires and convenience stores.  Allied Cooperative has locations in Adams, Blair, Galesville, Mauston, Melrose, Mindoro, Plainfield, Plover, Tomah, West Salem, Wisconsin Dells and Wisconsin Rapids.

Propane Market Update

Allied Cooperative recently installed a new 30,000 gallon propane tank at our Plover fertilizer plant.  This tank was installed in order to provide the best service possible to our northern customers.  If you would like more information on our propane programs or would like to discuss your contracting needs for the upcoming season please contact us.

Right now, propane inventories in the Midwest and Canada are near the bottom of their 5 year averages and have been since April. Looking ahead, inventories appear to be the driver for price direction. Summer fills will continue, average dryer gas usage is probable, and many companies that buy contracts are currently light on them, which means that that will pressure the market upwards once they start buying. My recommendation is to consider your needs for the next 12 months, as there appears to be more potential upside than downside. Please call with any questions and to discuss.                          — Rob Hutchens, Certified Energy Specialist

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