Rural Minnesota copes with tight propane, natural gas supplies, rising prices

Empty propane tank
Ron Selleck of North Branch, Minn. is heating his home with electric heaters after his propane tank ran empty. Rising propane prices are worrying many rural Minnesota residents who count on the fuel to heat their homes amid a bitterly cold winter.
Jerry Holt/The Star Tribune via AP

Xcel Energy is asking its gas customers in the Fargo-Moorhead and Brainerd Lakes areas, and western Wisconsin, to turn down their thermostats and conserve energy. A pipeline rupture in Canada over the weekend raised concerns about the supply of natural gas to the region. The company says things should be back to normal Monday evening.

The problem of dwindling gas supplies is nothing new for the many rural Minnesotans who heat their homes with propane. The blasts of arctic weather the region's been getting this winter have helped drive up prices for propane -- which is already in short supply for a host of other reasons.

If you live in a city or suburb, chances are the gas that fires your furnace or boiler comes to your home from a pipe under your street. If you live in a rural area -- as Christine McVicker does -- the gas, in her case propane, comes on a tanker truck.

McVicker -- who lives in an 1876 farmhouse near Isanti with her husband and three kids -- has been seeing a lot more of that truck lately. She says it's been by twice this month already, and each time she leaves a really big check for the delivery man.

"We just put 200 gallons in because they're limiting how much we can get, and that was about $530," she said.

Christine McVicker
Christine McVicker at her home in Isanti, Jan. 26, 2014.
Matt Sepic / MPR News

That's about $2.65 a gallon. McVicker says when they bought their home a decade ago, a gallon of propane cost around 75 cents. She says her supplier has warned the price could soon hit 6 dollars. McVicker has a relatively new boiler and some insulation. But she says heating her house and not the windy prairie immediately outside it remains a big challenge.

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"It's kind of funny. You can see the steam from the boiler come up past these windows, and every time I see the steam coming, I always think it should just be green, because it's basically money going into the air," she said.

To pay the propane bill, McVicker says she's been working extra hours at her nursing job. Some long-planned home renovations are on hold. So is another vehicle purchase.

McVicker buys her propane from Lakes Gas Company, a regional distributor. Company Vice President Steve Sargeant says the rising prices can be explained with basic economics: low supply and high demand.

"This is unforeseen, we've been in business for over 54 years and at no time has the depth of the supply been restricted at the level it is now," he said.

The National Propane Gas Association, a trade group, says the problem began back in October with a confluence of events. Farmers harvested large amounts of grain across the upper Midwest, and it was a wet harvest, so they had to use massive amounts of propane to dry it. Then a key pipeline was shut down for repairs, just in time for a big winter storm. And then there was the polar vortex, and now another one.

Minnesota Commerce Commissioner Mike Rothman says state government is responding to the problem. He says Minnesota residents who heat their homes with propane and qualify for the federal Low Income Home Energy Assistance Program -- or LIHEAP -- will receive crisis payments of $1,000 instead of $500.

"The low income heating assistance program serves between 130,000 and and upwards of 160,000 people every year. That's federal dollars that the state administers and gets it out to people who are typically senior citizens, veterans people with children in their family and with disabilities."

Rothman says Governor Mark Dayton has also lifted some trucking restrictions so drivers can bring more propane into the state. In Wisconsin, Governor Scott Walker has issued similar executive orders and also released more money for LIHEAP payments. And with more cold weather hitting the upper Midwest, Walker also declared a state of emergency in Wisconsin, directing all state agencies to assist as needed.

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Reporter Jon Collins contributed to this story.