January 1, 2014

 

Dear Customer,

    A record corn crop harvest in November increased demand for propane to a record high in the U.S. reports The Energy Information Administration (EIA).  The record-setting corn harvest is forecast by the U.S. Dept. of Agriculture to reach 14.9 million bushels in 2013-2014.  Corn must be dried to 15% moisture content before it can be stored to avoid mold and other quality problem.  Because propane is widely used for crop drying, a wet growing season in the Mid-West, combined with the largest corn yield in U.S. history, greatly increased the demand in propane.

 

   According to EIA demand for propane was at the highest level ever recorded for November – for the week ending November 1.  the U.S. consumed  nearly 1.8mmbbld, a figure not typically seen until January or February when the winter heating season reaches a peak.  Along with spiking domestic demand, competitively priced U.S. propane exports have also surged.  Add to the above problems, was the record cold temperature in the Pacific NW and Western Canada which occurred in November and December.  It got so cold in Canada that the refineries (-50 temperature) had to shut down and there was no supply coming into Pacific NW from those suppliers.  This part of Canada is a major supplier of propane to the Pacific NW.  This boost in propane demand and tight supply problems has created a spike in propane prices across the country and in our region.  So propane demand for the 2013-2014 season could continue at a record pace into the spring.

 

   While hydraulic fracturing has transformed the way oil and natural gas is produced in the U.S., Its dramatic success attracted the attention of environmental groups.  They in turn are raising concerns about ground water contamination, water consumption, wastewater disposal, earth quakes, and greenhouse gas emissions.  The Heartland study asserts that environmental groups are taking advantage of the public’s limited understanding of the smart-drilling process, limited knowledge of geology, and lack of knowledge of current federal and state regulations and oil and gas production.  Research Fellow Isaac Orr asserts Hydraulic Fracturing is a game-changer for Energy and Economics and points out that while vast reserves of oil and natural gas have been known to exist in shale formations throughout the U.S. for decades extracting those resources was not economically viable until the advent of smart-drilling technology – the combination of horizontal drilling, hydraulic fracturing technologies, and computer-assisted underground monitoring.

 

   All of our customers used twice as much propane during the last two months because of the extremely cold weather.  Our company has been running 5 delivery trucks daily in attempt to properly supply the increased demand.  If you could check the tank visible gauge (all tanks have 0-90 visible gauge under the lid on top of the tanks) and call the office and report the remaining percentage to the office staff if it is 30% or below.  Call early in the day so the drivers have time to respond to your needs.  Your household furnaces and unit heaters used in greenhouses will heat all night long when temperatures are in the teens.  Plan ahead and let us know the propane levels.  Companies should assign a propagator (nurseries) and or office manager at service stations to read percentage of gas supply maintaining in tank daily.  We are still in the catch-up mold and are attempting to make the delayed December fills.

 

Thank you for your business in 2013.

 

Cordially,

John J Buller and Sons