I’m confused… Happy, but confused.

Ever since I moved out here to rural South Dakota I have used propane as a heating fuel.  For the first few years it was not only my primary source but my only source for home heat.
As the price of the stuff (which tends to follow oil) continued to increase, I looked for and found an alternate source of heat in the form of a wood burning stove.
I have seen the price of propane go from 83 cents a gallon in 2003 to 2.25 a gallon in 2008.
I have reduced my consumption by over half with the a bit of sweat equity and the wood burner, and I’m fine with that.  It keeps me young to swing a 9 pound mall and split a 12” log.

Here’s why I’m confused (and believe me, I m not complaining). I called my local supplier to check the price of propane for the “winter fill program” and found out the price was on dollar and ten cents a gallon!  Last year it was 1.79.  The year before it was 1.89.
I told them to fill the tank, something I have not had the wherewithal to do in several years.

My question is why.  Why has the price of propane broken away from its link to crude oil?  The driver of the delivery truck told me there is a glut because of the mild winter.  The dry summer also has an affect here.  In the fall, farmers will use propane to dry down grain for long term storage.  Well it has been so dry that there will be little drying needed for the small harvests this year.

Anybody know it that is happening in the home heating oil business or in the natural gas industry?  Anybody have a better understanding of the energy industry than I do?

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Published in: on September 15, 2012 at 8:29 am  Leave a Comment  
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