With extreme Arctic cold in large parts of the U.S., particularly the Midwest, I saw this article and thought it worth passing along. Here's the key excerpt (bolding added by me for emphasis):
However, our problem with surging demand is compounded by the fact that we also have relatively low inventories for this time of year. Why are inventories low? You guessed it, the weather – but perhaps not the weather you’re thinking about. Corn growing conditions in the Midwest last year (lots of rain at the end of the season) led to a bumper crop of “wet” corn. That corn had to be dried out before it could be stored, and it is propane that is the primary fuel used for corn drying (SeeFarmer Dries Corn and I Do Care). According to the Propane Education and Research Council (PERC), this year we used five times more propane than we do in a normal year . To get a sense of just how substantial a volume we’re talking about, look at Figure #4 below which shows the current inventory in the Midwest (PADD II) plotted against the previous five years’ high-low range of stocks.
Source: EIA |*Range represents 5 years prior to current| (Click to Enlarge)
What this tells us is that the Midwest propane stocks, which usually rise to about 30 MMB during the fall shoulder months, only got up to about 24 MMB last year. More importantly, propane inventories are as low now as they usually get at the end of the withdrawal season, and there are still two months of winter left. In the first four weeks of 2014, propane stocks in PADD II were drawn down by an average of 1.36 MMB/week. There are only 10 million barrels left in PADD II. So if draws were to continue at that rate, and nothing else changed, the Midwest would be out of propane by early March. Let that sink in.
I checked with the U.S. Energy Department, and they are definitely concerned. For instance, the Energy Information Administration's 1/23/14 "Today in Energy" briefing noted that "[t]he most recent cold weather increased space-heating demand at a time when markets were already tight" and added that "[s]trong demand surges, low inventories, and supply challenges have led several Midwest states to implement emergency measures to provide propane to heating customers, including suspensions of limitations on hours of service for propane-delivery truck drivers." The question is, could we actually be talking about a big piece of the country running out of a major heating fuel before the winter is over? Hopefully not, but stay tuned...