LP Gas, March 2010

W I N T E R R E P O R T Continued from page 32 the tab for lost time and vehicle wear and tear when a transport has to drive several hundred miles to procure propane from a distant terminal according to Hanger When wet barrels arrive at the wharf they are quickly available for distribution Im about the only game in town for spot product he says As Valentines Day approached Hanger was contemplating if another shipment was in order based on spiking demand when the regions roadways were fi nally cleared or another looming wave of cold temperatures Such arrangements are made only if his customers commit to the cargo ahead of time People get more and more reluctant to get more product as we go farther into March They want to go hand to mouth they dont want to get stuck with high priced product Theyre being prudent in their business but it makes for a diffi cult supply situation as we go forward he says Hanger tells of a North Carolina fi rm that bought 60 railcars of propane several years ago after a particularly nasty January By the time it got there the sun was out and it was warm They suffered a huge loss on any gallons they sold it took all summer and bankrupted the company Several variables are involved for a ship to shove off including a 10 to 14 day time frame just for the voyage itself notwithstanding further delays if rough seas erupt in the North Atlantic Its like a dance There are all these pieces moving around The companies want the product today not three weeks from now Hanger explains There are not an unlimited number of ships available and theres not an unlimited amount of propane waiting to be loaded Dixie gets dumped on In the Sunshine State iguanas were falling from the trees agricultural pro TAKING STOCK OF 2010 BY JAMES E GUYETTE A high level of American exports may have left some propane marketers feeling squeezed for supply Petrochemical usage is above average and domestic heating demand has been on the upswing as well Inventories at Mt Belvieu are below what they were a year ago says consultant Marty Lerum at Propane Resources and its due to a record level of exports that started in April of last year and are continuing through March of this year The top October November recipients motivated by attractive pricing included Mexico Ecuador the Netherlands the Dominican Republic Egypt Chile Belgium Morocco and Canada There are still ships set up to go out in February and March even though we have low inventories here Lerum reports If this were mid January instead of mid February it would really impede the ability to get enough propane to take care of the customers in the U S he notes Stocks are a little on the lower side but theres no cause for alarm says economist Neil Gamson at the Energy Information Administration EIA If a huge storm hits here or there you could see some regional or local shortages as you would with any of the other fuels The EIAs annual household heating expense estimates for 2009 10 declined when compared to 2008 09 refl ecting lower average per gallon pricing THIS Y EAR L AST Y EAR Nationwide 1753 213 per gallon 1950 minus 101 percent Northeast 2341 259 per gallon 2568 minus 89 percent Midwest 1675 179 per gallon 2096 minus 201 percent West 1685 221 per gallon 1701 minus 09 percent South 1630 234 per gallon 1681 minus 30 percent Consumption in 2009 10 was slightly elevated in some regions according to the EIA when compared to last years fi gures Nationwide average plus 03 percent Northeast minus 40 percent Midwest minus 33 percent West plus 42 percent South plus 47 percent Some 20 percent of your 2011 purchases should have been accomplished by the time this hits print because well be coming out of this winter in short supply Lerum suggests Dont look for propane prices to get at 50 percent of crude this spring like they did last spring he adds Buying before summer is the best strategy Lerum continues The likelihood of propane imports is very slim because other countries are cutting back their production he advises The access wont be here If we dont get imports the price will continue to escalate compared to crude Continued on page 36 34 LPGas March 2010 www LPGasmagazine com