(January 24, 2014 - Financial Times) Arctic blast fuels US propane squeeze (By: Gregory Meyer)
http://www.ft.com/cms/s/0/e9f2ee1e-844d-11e3-b72e-00144feab7de.html
The US is suffering a massive squeeze on propane supplies amid freezing temperatures and soaring exports of the fuel to users as diverse as furnaces and petrochemical plants.
Prices have more than doubled in a week at a central trading hub in Kansas. Terminals are rationing supplies and governors from Missouri to New Jersey have invoked emergency powers to speed distribution.
The shortage underscores how some US supplies remain vulnerable even as fossil fuel output surges with the shale drilling boom. Production of propane at oil refineries and natural gas processing plants has grown by a third in three years.
An exceptionally cold winter, record corn harvest and rising propane exports to Latin America and Europe have precipitated the squeeze.
“Those three things have converged to create the perfect storm for the propane market in 2014,” said Rusty Braziel, president of the RBN Energy consultancy.
A second wave of arctic air to hit the US this month has driven up demand for the fuel, which is widely used in rural areas beyond the reach of natural gas utilities.
Shane Fortner, manager of a propane retailer in Kentucky state, said: “We’re getting in a situation where our suppliers are trying to back out of contracts we made back in the spring and summer to fulfil this winter’s gas.”
The squeeze would subside when “it warms up”, said Mr Braziel. “In the meantime, the propane market is going to be scrambling to keep up with demand.”
