The Free Press, Mankato, MN

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February 13, 2014

Congress should investigate propane shortage

No doubt you are informed about the propane shortage currently affecting heating needs in our area. I received some data that has received little attention. The data is from a fellow National Organization for Raw Materials member in Michigan who obtained it from the Energy Information Administration.

For the week of Jan. 27, EIA indicated the residential propane price as $4.01 per gallon, with wholesale prices around $3.54 per gallon. The rise in prices has been very steep since the middle of January, although there has been a significant steady increase in prices that began in mid-October.

Failing to receive any attention are U.S. exports of propane and other liquefied petroleum gases. Beginning in March 2013, the quantities exported each month have increased by a minimum factor of 1.5 times the average monthly exports of 2012.

In October and November, exports were over two times the average monthly exports of 2012.

When the export quantities in October increased to 13.2 million barrels, prices to domestic residential consumers began to rise immediately. What can be clearer regarding market forces?

The congressional investigation that must be conducted on this subject needs to provide honest, documented responses to the following questions:

n Are foreign consumers paying more or less than Americans for our exported propane?

n Why does the American energy policy favor private interest over domestic needs?

n Why do we have no provision for a sensible domestic reserve?

n What will be done to identify and remedy price gouging?

n What is the manner and extent of marketing manipulation for private gain affecting this avoidable physical and economic impact on people and businesses?

n Will prices return to previous levels or will this be like gasoline, where supplies bear no relationship to retail prices?

Gary Ballard


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