As states scramble for propane, exports remain high
NEW YORK, Jan 30 (Reuters) - U.S Northern and Midwestern states called on Thursday for new ways to ease a supply crunch of the heating fuel propane during the second week of a bitter freeze, in a sign the shortages are expected to continue into next month.
While millions suffer from the supply squeeze and sky-high prices, government data showed the fuel was being exported at historically high levels going into the winter, and analysts say the pace of sales abroad continued in November and January.
On Thursday, states called for cash to be released to hard-hit consumers, waivers on road restrictions to be extended and warned propane suppliers from taking advantage of the situation by price gouging.
Trucks have rushed to the propane storage facility in Mont Belvieu, Texas, only to find a two-day wait to stock up, suppliers and traders said. Nevertheless, Texas stock has been plugging the gaps in supply as far north as Minnesota.
Six governors from Upper Midwestern states spoke on the telephone to their Texan counterpart, Rick Perry, and asked him to extend a waiver on trucking restrictions, which runs out next Wednesday.
"I told Governor Perry how important his previous wavier had been to Minnesotans, who are suffering severely from this propane crisis. He very graciously agreed to extend the waiver when it expires next week," Minnesota Governor Mark Dayton said in a statement issued after the telephone call.
Governors from Wisconsin, Iowa, North Dakota, Indiana and Ohio took part in the call, the governor's office said.
Benchmark propane prices for fuel heading towards the Midwest more than doubled since the start of the year to just shy of $5 a gallon last week. On Thursday, they swapped hands for as much as $3.50, but then slipped to $2.45, traders said.
Residents of states such as Wisconsin, Minnesota and Iowa paid more than $4.50 a gallon on Monday compared with $1.90-$2.30, according to Energy Information Administration data.
Such price spikes caused Democrats in Oklahoma on Thursday to call for state funding for consumers.
"Rural Oklahomans rely on propane to warm their homes and support their livelihoods," Oklahoma Democrat James Lockhart, said. "This is about survival for them. We have been diligent in putting away state funds for emergencies, and I can assure you that our low-income citizens and the elderly believe this propane shortage is an emergency."
Wisconsin Governor Scott Walker released $8.5 million for households and ordered another $8 million in loan guarantees for propane suppliers having difficulties sourcing the fuel.
Michigan said it wants an extension of a waiver allowing truckers to drive longer until Feb. 11, another sign that the shortage there at least, could last for another week or so.