Farm Talk

January 28, 2014

Missouri senators want to investigate high propane prices


Associated Press

Parsons, Kansas — JEFFERSON CITY, Mo. (AP) — Rising propane prices led some Missouri senators to call for an investigation into why the typically abundant gas was running out and putting a strain on people's budgets.

Prices for propane, which is used to heat homes and dry crops, nearly tripled last week at the Midwest supply and distribution hub of Conway, Kan., and the potential for a shortage led Alabama Gov. Robert Bentley to declare a state of emergency on the same day.

The Energy Department said supplies of propane had fallen to the lowest level on record for the second week of January.

Sen. Mike Parson, R-Bolivar, said companies are sending more propane overseas, leading to a shortage throughout the Midwest.

He said the shortage causes prices to rise and gives big profits to corporations. He wants Koster to see if companies are price gouging.

``I think we need to step in and do something about it,'' said Parson, R-Bolivar. ``To do nothing is not an option.''

A spokesman for Koster said in an emailed statement that the office has received complaints about the increased price of propane and is coordinating with other agencies to determine the cause. Parson said the attorney general's office informed him that its staff would meet to consider his request. Senate President Pro Tem Tom Dempsey, R-St. Charles, released a statement Friday supporting Parson's call for a state investigation.

The Missouri Propane Gas Association said it is working to increase propane shipments and raise supply, steps that would lower the cost and boost inventory. Executive Director Steve Ahrens said low propane inventories this year are caused by an increase in exports along with high demand due to cold weather and abundant crop yields.

``We are getting near the bottom of the bucket and continue to use it faster than it comes in,'' he said.

Propane can be used to heat homes, but is also used to dry corn before it can be stored after a harvest. Ahrens said a boom in fracking technology and shale gas has led to more propane production than ever before, which has prompted companies to seek more propane buyers overseas.

He said existing contracts with international buyers prevent companies from diverting propane shipments domestically.

Parson, however, said corporations are trying to price gouge and make big profits by lowering supply.

``I hope they prove me to be wrong,'' he said. ``I just don't think there is any doubt about it. There is not any question they are going to make millions of dollars.''

The U.S. Department of Transportation has issued emergency declarations, allowing propane tank operators to cross state lines and drive for longer hours through the South, Midwest, New England and the central Atlantic states.

According to the Energy Department, 5.5 million U.S. households heat with propane, mostly in the Midwest and South.