Cold, imports, natural gas boost propane prices By STEPHANIE COOPER Gillette News-Record

GILLETTE, Wyo. (AP) - George Cierpisz has a 500-gallon propane tank to heat his home. His cook stove and hot water heater also use propane.

While Cierpisz doesn't worry about his propane tank running low, he has noticed an increase in his propane bills.

"The last one was one was a heck of a jump. Last summer it was like $70 to $75 and the last one for the same amount (of propane) was $152."

Cierpisz's bill has gradually increased over the last few months. He wasn't surprised by the increase he has seen over the winter.

"It's been so bitterly cold the last few months, you don't want to be cold so you turn it up," he said. "To me, I just thought it was common sense. This winter, it was the bitter cold. In the summer, it was 99 and 100 degree temperatures and running the air conditioner."

Terri Hamm at V-1 Propane said that propane prices are almost as high as they have ever been.

Last year, prices ranged from 78 cents to 99 cents a gallon and went down in the summer.

"This is the highest I've seen it. It's been as high as $1.50 (a gallon)," she said. "The price the customers are seeing is a reflection of the prices the dealers are paying."

Hamm said that there was also a shortage of propane for about six weeks.

"We had just enough to cover our V-1 customers. We couldn't have any new customers. For six weeks there was a really high demand for it and it wasn't there at the time."

Some of that has leveled off and Hamm said V-1 is able to take on new customers again. Propane prices have also gone down to about $1.30 and $1.36 a gallon.

Robert Pfleiger said while he's happy with the fuel-efficieny propane provides, he doesn't understand the price increase.

"I don't understand why it should be so high. We had a mobile home park in the mid-70s and back then the propane was at 18 cents a gallon it has gone a long way from there."

Last year, Pfleiger paid a local company between 90 cents and $1.10 a gallon for propane. On his last statement, he paid $1.40 a gallon.

"When we started six years ago, it was around 60 cents a gallon."

Gary Germann of Gary's Propane agrees that propane is a safe, efficient fuel source for home heating.

"The last national fire department statistics on incidents per 100,000 homes were about the same for natural gas, propane and electricity," he said.

A number of factors have contributed to the rising propane costs.

-Imports: "We import propane into the United States from Canada, Albania, Saudi Arabia and a few other countries. If we start using more than we are making in the United States, then we have to start importing," Germann said.

In the 1930s and 40s, when propane was cheaper, it wasn't being imported. While the majority of the nation uses propane produced in the United States, when there is a shortage, propane is imported.

-Cold winters: The cold winter has people using more propane, which means more imports.

Hamm said colder winters have had propane users worried.

"We get calls from people wanting us to come out and check for leaks. They don't understand that they are using more of it."

-Natural gas: The urgent need for natural gas also having an effect on prices.

Propane, butane and hexane are by products of natural gas, Germann said. When the natural gas isn't being refined, less propane is produced.

"Instead of taking time to refine it, companies are in a hurry to get it to market," Germann said. "For awhile this winter when natural gas was so high there was a decrease in supply because they weren't taking time to refine it."

He believes that storage of both propane and natural gas was on the low side, which was a problem because of the cold winter.

"Not just for here, but we are competing for propane all over."

Compared to natural gas, which has seen a 125 percent price increase, Germann said his propane prices have only increased 78.3 percent over last year.

But Germann thinks prices may begin going down.

"I don't know that we will ever see it go as far down as where we were, but over the next two years we should normalize," he said.

Germann also believes that something good may come out of the propane demand.

A large amount of natural gas in the Prudhoe Bay in Alaska wasn't accessible to the rest of the United States.

"It wasn't feasible for them to pipe it down here, and I've read that they may consider building a pipeline."

Nancy and Bob Sorenson, ranchers who live about 38 miles north of Gillette, say a reliable heating source is important when you live outside of town.

She has noticed an increase in her propane bill, but said it hasn't been as drastic as the increase in her gasoline and diesel bill.

For the full year of 1999, Sorenson paid $899.99 for propane, in 2000 she paid $1,099.99, a $200 increase. She saw a $400 increase in her electric bill in the same time period and a $3,000 increase in gas and diesel.

"I knew they had gone up, but I hadn't done an analysis between the two years."

http://www.trib.com/HOMENEWS/WYO/8PropanePrices.html

-- Martin Thompson (mthom1927@aol.com), March 09, 2001