Propane Price Lock in Rate is a Joke

bogieb Posted By bogieb, Jun 2, 2015 at 6:57 AM

  1. bogieb

    bogieb
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    Around here electric rates are pretty high - when I was looking for a house, I wouldn't consider a house with electric heat. After doing a bit of research, neither will a good proportion of buyers in my area. And, after comparing relative costs per BTU, using 0.20/kwh for electric and 3.44/gal for propane, propane is still way cheaper than electric.

    I would do much better to put in oil for the boiler & DHW and keeping a small tank for stove gas. Oil has much higher BTU's (even at $4.5/gal it beats out propane). At least I could place the oil tank next to the house instead of out in the middle of the yard. And, oil tanks aren't overly expensive to buy outright.

    But then I have to buy a new boiler and run tubing/pipe from the tank to the far side of the basement.

    Argghh, I can go around and around in my head like this for years :confused::p
     
  2. maple1

    maple1
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    Keep in mind also there are varying types of electric heat.

    I put an electric boiler in for back up heat, but only because we usually only need it for maybe 2 days a year (none last winter). I would certainly not use it for anything approaching regular use.

    But heat pumps & mini-splits kind of throw this:

    And, after comparing relative costs per BTU, using 0.20/kwh for electric and 3.44/gal for propane, propane is still way cheaper than electric.

    at least partly out the window. Then adding in possible A/C use, and dehumidification (which a mini-split can also do) - even more to consider. Then there are factors of personal preference - example, I wouldn't keep LPG on site just for my stove. But LPG stoves are important to others (including yourself). LPG could also come in handy for a generator.

    I would not go back to the days of heating DHW with oil though, pretty sure about that one.

    Certainly no one size fits all solution.
     
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  3. jackbean53

    jackbean53
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    before i would buy my own tank , i would line up a supplier . some propane suppliers will not fill a tank unless its theirs .
     
  4. Tumpin' Wood

    Tumpin' Wood
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    Feb 9, 2015
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    I saw this on Business News Network this morning. You may want to move.


    It’s getting more difficult to sell propane and propane accessories in Edmonton. The spot price of Hank Hill’s hydrocarbon of choice has gone negative, forcing producers to open their wallets to get rid of excess inventory.

    The Canadian National Energy Board (NEB) highlighted seasonally high Western Canadian inventories heading into May in their latest monthly report. The NEB later commented that current levels could more than double by the fall to match the region’s 9.4 million barrel storage limit.

    “We’ve got a situation of oversupply in Western Canada. Natural gas producers have been much incented to go after liquids rich reserves in recent years. That’s created an excess of production,” said Raymond James analyst Steve Hansen.

    However, it’s not quite time to grab the tank from under your Barbecue and pursue your dream of getting paid to man the grill. Propane distributors who buy at the wholesale rate and sell at retail are the big winners from the supply glut. Price breaks will slowly leak down to residential heating and barbecue buyers of the gas.

    “If you are a consumer and you’re ready to fire up the BBQ this summer, you would expect to pay lower prices as the year progresses,” said Hansen.

    More robust natural gas production in the U.S. is the main culprit behind the regional over-supply in Western Canada. Kinder Morgan called it quits with Canadian imports when they reversed the 1,900-mile Cochin pipeline that passes through Minnesota in 2014. Weaker industrial demand across Alberta has also played a role.

    “Western Canada is effectively left with a regional pocket of propane that is largely trapped now with not a lot of local demand. That’s creating opportunities. There is a lot of export terminals now being proposed for the west coast of BC as well as the Pacific North West,” said Hansen.

    He says improved domestic rail transport is the best option to relieve the pressure in the short term, as approvals lag for larger international terminals.
     
  5. BrotherBart

    BrotherBart
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    We have the same situation here. Nat gas storage is bursting at the seams. Nowhere for the gas to go or the propane by-product of processing it.
     
  6. bogieb

    bogieb
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    That is a good point. I don't believe it would be a problem since there are lots of "little guys" selling propane in these parts (oil and propane being the way the majority of houses are heated in NH), but worth investigating to make sure.
     
  7. SidecarFlip

    SidecarFlip
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    Interesting and not exactly legal comment. If you own the tank (I own 3-500 gallon tanks), any company can fill them, they may refuse but thats a matter of business, not regulation. Some may request an ingtegrety test which they can do themselves for a minimal fee. Some may go as far as to want to inspect the lines and usage appliances but I've never found that with any of the 3 suppliers I deal with, shopping on price alone because propane is propane, no matter who delivers it.

    Filling an owned tank versuses a leased one, gives the owner freedom to choose and price shop. A leased tank can only be filled by the supplier you lease from, in affect, price gouging.

    No one in their right mind (unless they were really flush) would contract with a pellet supplier exclusively, everyone price shops, same applies to propane, at leat in my view.
     
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  8. SidecarFlip

    SidecarFlip
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    I heard the caverns in Sarnia, Ontario were full as well. I hunt with one of my propane suppliers so I get the latest news on the gas front.
     
  9. bogieb

    bogieb
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    I think the biggest issue with owning your own propane tank is a decent sized propane tank costs $1500-$2000 and then you have to get transportation (it won't fit in the back of my poor little Patriot - LOL, and wouldn't even fit in the bed of a pickup truck). Then you have all the hook ups, pressurizers and what-not. A 275 gallon Oil tank is a less than $500 at BBS, will fit in the bed of a regular sized pickup, and doesn't have much for installing the line (a filter and a petcock maybe?).

    Also, propane tanks must be recertified every 12 years and if it flunks, there goes another couple of grand to buy a new one. Oil tanks don't have to be recertified, and they can routinely last 25 years.

    The question is, can I recoup the ~$2k cost within a 12 year time span with savings realized by going to my own tank. At this point, probably not since I haven't even used 150 gallons since last December. Now, if I didn't have pellet stoves and still went thru 300-400 gallons of propane during the winter months, I'd have a better chance of at least breaking even.
     
  10. maple1

    maple1
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    Oil tanks don't have to be recertified, and they can routinely last 25 years.

    Up here, insurance companies have something to say about that. That was one of the factors in me deciding to get rid of our oil stuff - we were due for a new tank in 2 years, so they said. My parents had to replace theirs again 3 years ago, 6 years after they had replaced it the last time. Not sure exactly why, something about constantly revising standards or something. Oil leaks/spills cost big bucks to clean up.
     
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  11. Peterfield

    Peterfield
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    Friend of mine bought is own 500 pound tank (underground model) and uses it for heat as well as a fuel for a generator if needed. He said on minimal usage he guesstimates he could have power for two weeks on a full tank. If your prone to power outages, just another reason to consider propane.
     
  12. SidecarFlip

    SidecarFlip
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    Why I have multiple tanks. I run the standby 17KW unit on propane too. Sure is nice to have all the conveniences of utility power in the dead of winter or ac in the heat of summer when the utility out and it's out here, quite a bit. My farm cannot function without electrons flowing. Cattle need watered and toilets need flushed. Portable generators don't cut the cheese IMO.
     
  13. SidecarFlip

    SidecarFlip
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    I've always been leery of burying a bottle, in fact, Michigan don't allow it. All bottles (tanks) must be above ground. I just paint mine green. They blend in with the trees well.
     
  14. bogieb

    bogieb
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    Naturally I was only speaking for my neck of the woods. Propane tanks are regulated by state and federal laws, which require the recertifying, and propane companies cannot legally fill a tank that has not been certified more than 12 years after it was manufactured - and every 5 years after that.

    My insurance company never said squat about my tank when I had oil at my last place (lived there 25 years).
     
  15. SidecarFlip

    SidecarFlip
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    Thats typical of any pressurized bottle though propane tanks rarely attain pressures of over 100 psi. I exchange welding bottles often for my business and all are date coded for certification/recertification and if you hit a date code experation, wham, you get accessed the testing fee. With high pressure bottles, ie: acetelyene, oxygen, tri-mix, argon, heilum or whatever, they are static tested by immersing in a tank of water with a known quantity. The bottle is then pressurized to 150% of nominal rated pressure (ASTM) and then the displaced liquid in the tank is measured and if the displaced liquid is over a pre-determined value, the bottle is scrapped.

    Propane tanks aren't tested by immersion, They are physically checked for defects, excessive corrosion, and bad valves and if they fail inspection are not fit for filling. Bad valves and checks can be replaced. Excessive corrosion can't be repaired.

    2 of my owned tanks (bottles) are at least as old as I am (65 years old) and both are in excellent condition. The 3rd tank I bought as a AN refit tank, pulled the running gear and refit the valves. If you purchase an AN nurse tank, all the AN must be evacuated from the tank (and the valving/checks) replaced prior to filling because AN is corrosive..

    Little FYI there....
     
  16. SidecarFlip

    SidecarFlip
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    Bogieb....

    I spent the afternoon with one of the hunting group I hunt with, haqppened to be the guy who owns and operates the propane company I get my gas from (and no, I don't get any deals other than maybe an exrtended payment window if I'm real nice and let him shoot first, which I usually don't..lol)

    Anyway, I'm not using pellets or corn this year, in fact, I have about 30 bags left from last year that I'll probably roast and thats it.

    Propane here is at $1.09 a gallonand he told me on pre-buy it should be well below a buck.

    I can't afford to buy pellets nor can I afford shelled corn at $3.56 a bushel when propane will be that low. I'll be visiting on here and offering words of wisdom but the Bryant Plus 90 will be heating the house this winter.
     
  17. bogieb

    bogieb
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    Since we (NH) have to have all our propane shipped (train) and trucked in, it gets expensive quickly. However, Amerig*s is just plain nuts on the price. Doesn't help that I don't use much, so I'm sure that figures in too for the price they are quoting me. I know that when I called other dealers the winter of 2013/2014 (to get a price point), their first question is "how much do you use a year?".

    I certainly hope you visit regardless of how you heat - you are always good for bringing out points to think about as well as a laugh or two.
     
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  18. ScotL

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    That's a better price than my rack price here (truckload pricing at 12,000 gallons per load).
     
  19. SidecarFlip

    SidecarFlip
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    It's never been that low that I can remember and I've been here over 30 years. My hunting buddy either gets it from Sarnia, Ontario (the caverns) or from the refinery in Toledo. Guess I'd better have the HVAC company come out and 'tune up' the Bryant.

    I figured I'd run corn this year, corn is pretty cheap (old crop) but it can't compare with propane. If thats indicative of midwest pricing, won't be many around here using pellets this year.

    I'm sure my friend has his markup built in. He's not in the charity business after all. Even if it was $1.50 on pre buy, thats cheaper than any alternative fuel (corn or pellets). I'm real curious to see what pellets go for around here this year however.

    More hunting money...lol
     
  20. Arti

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    Eighty to Ninety cents locally will likely burn more propane however we like the pellet stove so much that we will burn that in the evenings,
    It's not all about a few pennies if it makes us more comfy and we enjoy it.
     
  21. SidecarFlip

    SidecarFlip
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    To me, heat is heat, derivived from pellets or propane or cordwood. I'm into whats the least expensive.. Will be interesting to see how the pellet manufacturers respond, at least the ones that sell them domestically. The exporters won't be impacted I suspect. I'm reasonably sure that fuel oil will stay low this winter too.
     
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  22. Wooden Head

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    Just received the first offer for pre-buy in my area (whitehall., Michigan) Excel Propane is offering $1.59.
     
  23. begreen

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    I just went to fill a 100# tank at the local lumber store. They wanted $3.89/gal to fill it. Walked away and drove the truck to the Ace Hardware store nearby where it is $2.99 for the same thing. If I took the tank north of the Seattle area it is $1.59 to fill.
     
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  24. DougA

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  25. bogieb

    bogieb
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    I'm sure it will plunge for other areas, but they have to truck every bit of it to NH - then if you live in the boonies, they truck it some more, so I'm guessing the price won't go down much. Especially since I'm not going to be picking up my 500 gal tank and getting it filled at the hardware store. ;):)
     

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