"Midwest stockpiles are at their lowest for this time of year since 1996, curbing supply in a region that uses more of the fuel to heat homes than anywhere else in the U.S. Adding to the supply crunch, farmers in this region, which produces 32 percent of the world's corn, use propane heaters to dry their crops.
The country is shipping record levels of propane and propylene abroad, helping improve margins for producers but raising costs for farmers to dry their crops. Prices have jumped 51 percent in the past year, illustrating a side effect of exports even as shale drilling has boosted production of natural gas liquids, or NGLs, to all-time highs.
Farmers aren't the only ones facing higher costs. The Energy Information Administration, the Energy Department's statistical arm, is forecasting that Midwest families who heat homes with propane will spend an average of $136 more this winter. USA Today reported heating bills will be up almost 25% this winter, and we don't even know how long this is going to go on! The good news is only 6% of Ohio homes heat primarily with propane and mainly in Morrow County.
What if this is a sign of winters to come? Arthritis sufferers have been suffering bad in this weather. Maybe more will move out of the already diminished Rust Belt?
Will propane prices discourage more corn acres this summer, too?
Ed
Bad news for sure at this time of year when you can literally freeze to death without heat. Only a matter of time before this affects natural gas prices and of course fertilizer prices. Lower grain prices plus higher fertilizer and drying costs. A "perfect storm".
ReplyDeleteGlad we have four sources, Brad, wood, pellets or grain, electric and LP backup. We are using some of all four sources.
ReplyDeleteThat's 6 sources I count, although I don't know how much energy can be extracted from the first one, and there is still a feed cost to turn that hamster wheel generator... ;)
DeleteAnd what's that big white pot in your picture?
That's corn kernels, Chimel.
DeleteI was counting heat sources, not just fuels.
You pick up on everything!
I goofed up and caused some smoke so some of my precious heat went out the door with the smoke, cough, cough.
"What if this is a sign of winters to come?"
ReplyDeleteYou wish, Ed. What winters? There are no more winters with global warming!
Irony apart, this is probably to be expected in the future indeed, between scarcity and higher prices, but it does not seem to be what happened this year. I don't have the data to check, but it looks like production of propane in the U.S. actually increased as a result of the additional fracking.
This year was more about financial managers of oil companies deciding to sell more of it for a sure price rather than not knowing how cold the winter would be or how wet the corn would be and risking having high unsold stockpiles left. I guess it's one of the consequences of free unregulated market. On the other hand, it is not the job of oil companies to plan for every contingency of the country, that's what the government is for. They should set some minimum quota of energy reserves under which the oil companies can't sell, like a 30 or 60 days of usage or something. And no, that wouldn't be "Big Gov", or conservative, or liberal, that would be normal government doing what we elect them for. It's an economical problem, not a partisan one.
I think farmers should be glad that there were some sales to China, or the media would have accused corn farming! ;)
But really, farmers should get it into their heads that the time of cheap petrol-based fuel is GONE FOREVER. They should have alternative fuels and systems in place for drying grain or even powering tractors and combines, or be studying and deploying them. Maybe digest some corn stalks for biomethane or dedicate some of the soybean to make biodiesel. Farms also have all the real estate necessary for solar and wind, maybe even try heat pump or air to air transfer. Even in the most freezing weather, there is always a place colder than another, the differential can be concentrated to provide heating.
Maybe we need to re-consider the wisdom of using fossil fuels to dry corn. But then I don't grow corn. I can only ever remember one year when wheat had to be dried using propane on this farm. Other than that we just wait for the sun and wind to do it's work. Plus a little in bin aeration when necessary.
DeleteYep, sadly gone forever. Going to have to become more of a scrimper in my old age and I though we scrimped enough!
DeleteGround ground source Hvac plus spray foam.....a wonderful combo. Propane fire place in the living room Incase we lose power.
ReplyDeleteRan the fire place when it was really cold while we were home and used maybe 2-3% on a 500gallon tank all of last year...haven't checked it this year but doupt its moved much.
Propane is the gas that you use for barbeques, right? Do they use it for anything else? I was trying to think of other things they could use it for, but I couldn't think of any. I see you have a picture of a fireplace, does propane fuel that? http://www.stonypropane.com
ReplyDelete