What’s going on with the price of natural gas and propane?
The U.S. is producing record amounts of it, but the prices of the fuels are sky-rocketing. The conventional and intuitive answer is, “the weather.” The frigid weather most of the country has experienced during January has put fuel for heating homes and businesses in higher demand, according to USA Today. But wait! Blame the lack of infrastructure necessary to transport fuel–and poor planning by suppliers–say analysts like Bloomberg’s Matthew C. Klein.
No matter what the reason (take your pick), the spike in pricing is a reality. Parts of the Midwest and Northeast have experienced sky-rocketing natural gas and propane prices this January, according to the U.S. Energy Information Administration.
(Photo via wikimedia commons)
In places such as Fargo, North Dakota and Sioux City, Iowa, propane prices have more than doubled now reaching $6 per gallon in some areas. This price increase has hit small businesses hard even causing some to make cutbacks. In the small town of Osage, Minn., residents are getting steams at the how much it’s costing to heat their homes and run their businesses. “I can’t believe it. It’s ridiculous,” Richard Branstrom, manager of Osage Bait & Tackle, told WDAY TV. Business owners in the regions hit by high gas prices report they’ve had to cut back on staff, cancel orders, and close during certain times of the day to adjust to their financial difficulties. Tim Ulvin, another resident of Osage, is not optimistic. He believes high fuel prices will hurt the economy and, “affect everything on a large scale. Less money to spend means less money for everybody.”
(Photo: Washington State DOT via Flickr)
While there are no short term solutions for the situation, it is easy to predict that when the weather warms up, there will be a parade of state and federal agencies digging into the factors that have caused the current market fluctuations. One specific thing regulators will be looking into will be whether or not the current natural gas marketplace dynamics have any similarities to the manipulative forces that caused the California Electricity Crisis 12 years ago.
(Photo: Washington State DOT via Flickr)