published Friday, January 24th, 2014

Haslam declares propane state of emergency to give suppliers more road time

Propane prices are up and some rationing of the home-heating fuel is occurring amid the second bitter cold snap this month.

Even in the Chattanooga region, located far enough south to miss most of winter's hassles, a slowdown of propane distribution and rising demand is boosting gas prices.

It's a "transportation bottleneck," said Simon Bowman, a spokesman for AmeriGas, which operates offices throughout the area.

To help ease delivery problems, the govenors of both Tennessee and Alabama have declared state of emergencies to temporarily lift some driver restrictions to speed propane deliveries.

The Propane Education and Research Council said in a statement that "the supply of propane is not a problem. In fact, the United States is producing more propane now than at any time in decades."

The problem is getting all that gas to where it needs to be, when it needs to be there, especially in the Midwest and some Eastern states where providers rely on supply lines out of places like Kansas, Missouri and Texas to fill their customers' needs.

Supplies of propane and propylene in the Midwest fell by 1.34 million barrels to 10.2 million last week -- the lowest level for mid-January since records were kept 20 years ago, the Energy Information Administration said Thursday.

January may end up as the coldest month for the contiguous 48 U.S. states in the 21st century so far, according to the Commodity Weather Group LLC in Bethesda, Maryland.

The cold weather combined with "an unexpectedly high demand for propane for grain drying last fall" has put a strain on propane suppliers, according to the Propane Education and Research Council.

Danny Stewart, co-owner of Advanced Propane Inc. in Lebanon, Tenn., and former president of the Tennessee Propane Gas Association, said when the lines and roads cleared earlier this month, there was "too much demand," and propane companies couldn't catch up. And before suppliers could get the situation back under their thumbs, another wave of arctic weather hit, leading their customers to turn up the thermostat and burn even more fuel, depleting what little bit of propane a lot of them were already running on.

Suppliers are doing what they can now. But with trucks and gas lines sitting still in many places, propane providers are having to travel farther to fill up their tank trucks.

And that creates another problem for propane suppliers: Federal regulations limit drivers transporting hazardous materials to drive no more than 70 hours a week, in stretches of no more than 11 hours at a time. Drivers must also have 10 hours off between their driving shifts.

To get around that law and expedite delivery of propane within Tennessee, Gov. Bill Haslam on Tuesday issued an executive order to declare a state of emergency in Tennessee and temporarily exempt propane drivers from the federal stipulations that would ground them.

"This executive order will help families, farmers and businesses get the necessary energy resources to stay warm, stay open and keep operating," Haslam said.

The exemption allows "dealers of propane to fill or refill a container belonging to another dealer for the duration of the State of Emergency," according to a news release.

Alabama Gov. Robert Bentley issued a similar emergency order late Thursday after some chicken farmers and other large gas users were having trouble getting deliveries to refill their propane tanks. The Associated Press said the situation in Alabama was even more complicated because a major gas supplier quit making deliveries, citing shortages.

The emergency order helped Charles and Rob Simpson, brothers who own and operate a chicken broiler farm near Sweetwater, Tenn. Because of low propane reserves, the Simpsons' supplier could not give them the 2,000 gallons needed to heat their facility and allow for a new batch of birds to be placed.

But Rob Simpson got a call from another propane supplier in Athens, Tenn., which offered to come out and sell the brothers some gas.

"We're back in business," Simpson said. "Right now, everyone's back in line to be able to handle chickens."

But he also knew it would probably cost him.

Wholesale propane prices have gone up 60 percent in the last year, according to AmeriGas' Bowman.

Stewart said in his 20 years in the propane business, he has "never seen this type of price spike."

Where his company was selling propane last year at $2.49 per gallon, the current price is $2.99 per gallon. Stewart said for Advanced Propane Inc., the cost of propane right now is 90 cents more than it was back in the summer.

Although prices are up for propane, the Tennessee Department of Environment and Conservation reported on Thursday that its office "has received limited reports of residences and businesses running low on propane" within the state.

TDEC calls the current shortage "very uncommon," and said in a statement that the U.S. as a whole is experiencing the largest propane withdrawal in at least two decades.

Propane suppliers say that if things warm up in the next week or so, the propane market should even back out, with ample provisions and falling prices.

But if not, "We'll work with what we're given," said Bowman, which could mean ongoing rationing and rising prices.

Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.

about Alex Green...

Alex Green joined the Times Free Press staff full-time in January 2014 after completing the paper's six-month, general assignment reporter internship. Alex grew up in Dayton, Tenn., which is also where he studied journalism at Bryan College. He graduated from Rhea County High School in 2008. During college, Alex covered the city of Graysville and the town of Spring City for The Herald-News. As editor-in-chief of Bryan College's student news group, Triangle, Alex reported on ...

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