Propane Prices Are Surging Nationwide Hard Times Ahead For Many Customers

Art Schaefer shut the heat off to the upstairs of his Nebraska home and might have to cut it off to two rooms on the main level.

Propane prices for some 14.3 million households are up about 50 percent across the country.

While heating oil and natural gas prices also are well above last year’s level, propane has been in particularly tight supply as a result of an early cold spell, supply disruptions and demand from farmers and grain processors who use the gas to dry corn after a wet harvest.

Schaefer paid $1.17 a gallon to keep his 500-gallon tank full and heat his two-story home in Garland, a town of 250 people about 20 miles northwest of Lincoln. That compares with about 76 cents a gallon last winter.

That’s a big expense for the 77-year-old, who lives on about $1,800 a month in railroad retirement funds.

“When they hand you that bill it’s enough to make you swear,” he said in an interview this week.

The Schaefers could wind up spending $2,000 this winter on heating costs, twice what they spent last year.

Schaefer and his wife, Margaret, 74, said the increased propane cost will affect the holiday for their 33 grandchildren and great-grandchildren.

“It’s going to make a difference come Christmas, that’s for sure,” Schaefer said. “We’re going to cut back on Christmas gifts, absolutely.”

And the Schaefers are not alone.

Some 60 million people use the byproduct of natural gas and crude oil in one form or another.

In Nebraska, some 65,000 homeowners use propane for heat.

Propane prices have spiked higher than at any time since 1989.

In North Dakota propane recently hit $1.11 a gallon, up from 63 cents a year earlier; in Kansas it was $1.05 per gallon, up 45 cents; in Iowa it was $1.18 a gallon, more than 40 cents over last year.

Democratic Sens. Bob Kerrey of Nebraska and Tom Harkin of neighboring Iowa asked Energy Secretary Hazel O’Leary and Agriculture Secretary Dan Glickman to look into pricing practices.

Kerrey’s agriculture representative in Lincoln, Eugene Glock, received two dozen calls from constituents in a two-day span.

“It’s a short-term crisis,” Glock said. “It isn’t anything that’s going to challenge our national security. But for people and even whole communities that rely on propane, it is a crisis.”

A number of factors converged to create the high prices, including a late winter last year that depleted inventories and an early cold spell this year that bit further into the propane stock.

An unusually wet fall in the Midwest ate up propane used to dry the harvest.

In the meantime, supplies are being kept tight by high worldwide demand for propane, while supplies have been reduced by a July explosion at a gas plant that supplies 30 percent of Mexico’s propane production. Instead of exporting propane, Mexico is importing it.