Propane

[KBoater]

Now that we have had our first heat wave, is it too early to ask about gas heating prices? I just got a delivery of propane and the price since last fall has gone up 0.70 per gallon. Does anyone buy on a fixed yearly price?

[Airwaves]

The last bill I got was 2/21/08 from Rymes. $2.93.9 a gallon. How does that match up with you?

[Formula260SS]

Originally Posted by Airwaves

The last bill I got was 2/21/08 from Rymes. $2.93.9 a gallon. How does that match up with you?

I was just quoted 4.39 for Oil.............

[HUH]

It amazes me there is such a difference in fuel costs.
They all come off the same refining process. Starting at the bottom with crude, heating oil is a little higher up then gasoline and propane is at the top and should be the most expensive.

[Lakepilot]

Our last delivery from Rymes was 4/23 and was $3.29/gallon. We're trying to switch to Our Town Energy Alliance (603)776-5322, which was mentioned on this site.

[meteotrade]

Oil has about 50% more BTU per gallon than Propane, and is more efficiently burned. And since propane is simply a petroleum derivative, it doesn't make a lot of sense to chose it over oil.

[Lakegeezer]

The Our Town buy price doesn't start until September, but if you join now, you can get a small discount until the buy price kicks in.

Our Town is looking for more members. They claim that if they double their membership, they can get additional discounts.

This is my first year with them, but it seems like a no-brainer. I was able to stay with my current propane vendor (Eastern) - just get the gas cheaper.

[Lakegeezer]

Originally Posted by meteotrade

Oil has about 50% more BTU per gallon than Propane, and is more efficiently burned. And since propane is simply a petroleum derivative, it doesn't make a lot of sense to chose it over oil.

In our case, we use propane for a gas dryer, cook-top stove and small "fireplace" upstairs, so it makes sense to heat with it too. Also, our basement is close to the lake and we were concerned that an oil tank leak would find its way into the water. While propane is more expensive, you have to take into account the cost of cleaning your oil burner when looking at the total cost. Granted, the $100 or so to clean the furnace is a smaller percentage of the total cost now that the price of oil has sky-rocketed.

[woodswalk]

#2 oil- 137,000 btu/gal
propane- 91,500 btu/gal
wood- 21,000,000 btu/cord-

bear in mind the difference in efficiency between them

[WINNOCTURN]

Originally Posted by Lakepilot

Our last delivery from Rymes was 4/23 and was $3.29/gallon. We're trying to switch to Our Town Energy Alliance (603)776-5322, which was mentioned on this site.

geezer,

I have been with them for 4 years and it has paid off each year. The discounts vary from the amount of fuel you use per year. I use just over 700 gal per year and paid under $2.00 per gal by paying with in 10 days. One of my neighbors who is with Eastern but not a member of Our Town was paying over $3.00 per gal.

Here a "strange" thing with Eastern, they use Degree Days to time their deliveries. My neighbors, one to the left and one to the right one me get their fill on the same day. I do not get my till about 2 to 3 weeks later. My tank is less than 30' form the tank of my neighbore to my left. I asked the Drive one day about this and just shrugged his shoulders and said that's the way "THEY" do it.

There is a "Waiting List" for oil.

Here is their Website

www.otchoice.com

WINNOCTURN

[fpartri497]

one week ago I purchased 100 gals. of # 2 fuel Oil for the house from fred fuller whom I have been useing for the last 18 yrs. , at $ 4.399 per gal. I also buy propane from energy north for the fireplace insert . last delivery in April was $ 3.399, I dont know what it is today.

Im trying to join OTEA now.

[kjbathe]

Thank goodness for this site. I just signed up with OTEA for Propane. Based on last year's prices, my break even point on the membership cost is only 62 gallons. The decision to join was not a hard one.

[WINNOCTURN]

Originally Posted by kjbathe

Thank goodness for this site. I just signed up with OTEA for Propane. Based on last year's prices, my break even point on the membership cost is only 62 gallons. The decision to join was not a hard one.

kj,

Did you sign up for the automatic "Annual Subscription"? That way you do not have to woory if there is a cuttoff date to to get in on the Season Buy and you forgot to rejoin.

WINNOCTURN

[Weekend Pundit]

Our last delivery of propane was a month ago. We paid $1107 for 345 gallons, meaning we paid $3.20 per gallon from Irving. We have not yet heard from OTEA about the pre-buy price for propane. We go through about 500 to 600 gallons a year, so we're hoping we'll get a decent price.

[kjbathe]

Originally Posted by WINNOCTURN

kj,

Did you sign up for the automatic "Annual Subscription"? That way you do not have to woory if there is a cuttoff date to to get in on the Season Buy and you forgot to rejoin.

WINNOCTURN

I did the one year to try it out, but also read some conflicting info that propane subscribers would be automatically renewed. Either way, once I know the pre-buy price, I'll know if I want to renew and can easily change to an annual membership online. We have a shared tank, but I'm sure we can work through that with the neighbors (especially if the price is lower )

I've also started to mention it to others -- as I noted before, if it's as advertised and reported here, it's really a no brainer.

[fpartri497]

Originally Posted by HUH

It amazes me there is such a difference in fuel costs.
They all come off the same refining process. Starting at the bottom with crude, heating oil is a little higher up then gasoline and propane is at the top and should be the most expensive.

It Is my understanding that propane Is manufactured Only In north America, so how do they justify the ridiclus price per gal? it Is not imported like crude oil. Big oil Is milking us dry.

[Whimsey]

When I contacted Our Town about membership, they said because I have an underground propane tank (which I own according to the developer/builder of the house) I would have to get Irving (the only propane dealer willing to buy tanks) to "buy the tank" from my current supplier (Energy North) before I could participate. Does this make any sense? Anyone understand how this works and whether getting Irving involved would improve/complicate matters?

Since I moved to West Alton in September, I don't have an annual contract. I paid $2.74 this week, up from $2.30 ish most of the season, less than the numbers I see above. But since I heat with it, I use more than 2,000 gals per year.

All advice would be appreciated.

[Weekend Pundit]

Originally Posted by Whimsey

When I contacted Our Town about membership, they said because I have an underground propane tank (which I own according to the developer/builder of the house) I would have to get Irving (the only propane dealer willing to buy tanks) to "buy the tank" from my current supplier (Energy North) before I could participate. Does this make any sense? Anyone understand how this works and whether getting Irving involved would improve/complicate matters?

The reason for 'buying the tank' has to do with liabilities. If Irving is going to deliver, they want to know the tank and connected systems are up to snuff. We went through the same thing when we switched from Eastern to Irving, with Irving swapping a tank with Eastern in order to take possession of 'our' tank. They also did a thorough inspection of the fittings, lines, and regulators before making their first delivery. They don't want to be held responsible for problems with a privately owned tank over which they have no control.

Our first buy through Irving early last month cost us $3.20 per gallon, but we weren't on the OTEA pre-buy program yet. I know from friends that other suppliers are charging up to $6 per gallon for propane! Unlike heating oil, propane prices are all over the place, running from less that $3 to over $6.

[Weekend Pundit]

Originally Posted by fpartri497

It Is my understanding that propane Is manufactured Only In north America, so how do they justify the ridiclus price per gal? it Is not imported like crude oil. Big oil Is milking us dry.

Sorry to disagree with you, but the same imported crude they refine for heating oil, diesel, and gasoline is also used for propane. Propane is used worldwide, though North America uses far more than other areas in the world. It is but one fraction of crude oil that comes out of what are called fractionating columns in refineries.

When most refineries crack crude, they make a number of different fuels at the same time. It's not like all they make at one time is diesel, and another time gasoline, and another kerosene or heating oil or jet fuel. The refineries can jigger the fractionating columns to get a little more of one fuel and a little less of another, but that variation is only a few percent (single number percentages!).

There are a few refineries that can do what is called catalytic fractioning, meaning they can take lighter fractions of crude and make them heavier, or vice versa. These refineries are usually the ones designed to crack what is called heavy/sour crude. They require the catalytic process in order to refine that type of crude from the beginning. Most refineries are designed to crack light sweet crude, a crude oil that is easy to refine.

[Seeker]

I've been with Our Town for a number of years now. Last seasons price for me was $1.895/gal and I use approx 1000gals/yr. That does require paying within 10 days after you receive your invoice.
Not looking forward to what this years pricing will be.

[DickR]

Any crude oil straight out of the ground has a "light ends" component to it. This stuff contains, in varying amounts (the lighter ones quite small), hydrogen, nitrogen, methane, hydrogen sulfide, and various components containing up to five carbon atoms. Propane is but one of these. Sometimes the analysis includes identifiable six-carbon molecules, but more typically these and heavier hydrocarbons are included in the lower end of the distillation curve for the crude.

Some propane is recovered as LPG from the processing of the crude. As mentioned, many refineries have catalytic cracking reactors, in which heavy hydrocarbon molecules are "cracked" into smaller ones, more useful for gasoline blends. The cracking process results in some light byproduct molecules, including propane. This propane typically is recovered as LPG. There also is catalytic reforming, in which hydrocarbon molecules in a certain boiling range are reshaped to enhance their usefulness in gasoline. Reforming also results in light byproducts.

Whereas crude oil contains a bit of very light compounds dissolved in the heavier liquid, natural gas straight out of the ground contains primarily methane, with various amounts of hydrogen and nitrogen, and a heavier tail of water vapor, hydrogen sulfide, ethylene, ethane, propylene, propane, and rapidly diminishing amounts of heavier hydrocarbons that appear in the light end of a liquid crude. After all, most crude reservoirs have gas pockets on top of them, under considerable pressure.

To prepare natural gas for transmission through the pipelines for distribution to homes, the gas must be desulfurized and dried. Also, for economic reasons, the 3+ carbon chain molecules have higher heating value and make it worth the effort to recover them separately as LPG. In the case of liquified natural gas (LNG), where the natural gas from a foreign country is liquified for shipping to the US and elsewhere, removal of the propane and heavier stuff is typically is done as part of that process. The LNG product arriving at US ports has no useful amount of propane in it; it is simply pumped, revaporized, and put directly into the pipeline.

Thus the propane used as LPG comes partly from crude oil, the price of which has gone wild, and partly from natural gas produced domestically, the price of which will be pushed upward as power plants switch to burning more natural gas in place of oil and thus bid up the price of available supplies.

Now for the soap box editorial:

We have long had the means to use far less fuel for cars and home heating. Imagine the huge drop in gasoline use if all those large cars and light trucks used to cart one person to work (and for little else) were 5-speed subcompacts. In the case of home construction, we have had a combination of building codes based on really cheap fuel, home builders who don't know and don't care about how to build really energy efficient (and very comfortable) homes, and folks having homes built who pay far more attention to having granite countertops and basement theaters than they do to learning about and insisting on a very energy-efficient outer shell.

The high cost for gasoline for carting ourselves about and keeping us warm in winter isn't someone else's fault. It's our own. We had our first warnings 35 years ago, and again in the early 80s. We didn't pay enough attention then. Are we listening now?

[Sculpin]

Many of you here on this site care about the little things, such as family, quality of life, being treated as you would treat another, even the environment. If you fall into this catagory, your Propane Supply choice is easy, Eastern Propane! Check out their web site at www.eastern.com, speak with one of the "outside sales reps" This company is the only one in the area that "gives back to the community" ! In todays world, this has to mean something!

[KBoater]

I got a quote from Wolfeboro Oil for my propane and the calculated amount I used last year. I have since insulated my cellar so I'm not sure the amounts are correct. I think I will shut down the house for the winter. It is a new home. Does anyone has reasons for not doing this?

[WINNOCTURN]

Originally Posted by Sculpin

Many of you here on this site care about the little things, such as family, quality of life, being treated as you would treat another, even the environment. If you fall into this catagory, your Propane Supply choice is easy, Eastern Propane! Check out their web site at www.eastern.com, speak with one of the "outside sales reps" This company is the only one in the area that "gives back to the community" ! In todays world, this has to mean something!

Sculpin,

I posted this several weeks ago. Our Town Energy Choice contracts with Eastern for their Propane source. I not sure if you can get i on this years discount at this time. If you go to the Our Town website you will see the 2008-2009 pricing. It has been the best $25 investment I have ever made.
Check it out!
www.otchoice.com


I have been with them for 4 years and it has paid off each year. The discounts vary from the amount of fuel you use per year. I use just over 700 gal per year and paid under $2.00 per gal by paying with in 10 days. One of my neighbors who is with Eastern but not a member of Our Town was paying over $3.00 per gal.

Here a "strange" thing with Eastern, they use Degree Days to time their deliveries. My neighbors, one to the left and one to the right one me get their fill on the same day. I do not get my till about 2 to 3 weeks later. My tank is less than 30' form the tank of my neighbore to my left. I asked the Drive one day about this and just shrugged his shoulders and said that's the way "THEY" do it.

There is a "Waiting List" for oil.

Here is their Website

www.otchoice.com

WINNOCTURN

[SAMIAM]

We contract for 100,000 gal of propane each year for a commercial group.Last year Irvings price was $1.59.....this year it is $2.35. Guess I shouldn't squawk,but it's still a 74K increase

[fatlazyless]

At Amerigas, Laconia, my prebuy propane was 2.89/gal for 300 gallons....or about $900.... enough for the winter....not too shabby. I have a q-tank, 100gal tank. Hey, it pays to be poor and not live in a huge waterfront mcmansion! Last year, it was 2.49, and the year before it was 4.89, but as an automatic fill and not a prebuy.

The mcmansion next door uses oil.........too bad! It's this large, fancy house, and except for the oil delivery guy is totally unoccupied from Labor Day to Memorial Day.....hmmmm.

Apparently, propane has not had the same big price run-up like heating oil. Have no idea why?

[Lakegeezer]

The Our Town web site has a notice saying Sorry, we are now closed for the season and in the process of sending out price information. Stop back in a couple of months and join for next season, 2009-2010. It will be interesting to see what their prices are this year.

[bigpatsfan]

The answer to where propane come from is shown below... The quick answer is North America.

why does propane cost so much? the short answer is because the market will accept it.

One of propane's unique features is that it is not produced for its own sake, but is a by-product of two other processes: natural gas processing and petroleum refining.

Natural gas plant production of propane primarily involves extracting materials, such as propane and butane, from natural gas to prevent these liquids from condensing and causing operational problems in natural gas pipelines. Similarly, when oil refineries make major products such as motor gasoline and heating oil, some propane is produced as a by-product of those processes. It is important to understand that the by-product nature of propane production means that the volume made available from natural gas processing and oil refining cannot be adjusted when prices and/or demand for propane fluctuate.

In addition to these two processes, propane demand is met by imports and by using stored inventories. Although imports provide the smallest (about 10%) component of U.S. propane supply, they are vital when consumption exceeds available domestic supplies. Propane is imported by land (via pipeline and rail car from Canada) and by sea (in tankers from such countries as Algeria, Saudi Arabia, Nigeria, Venezuela, and Norway).

[Pineedles]

Thanks BigPatsFan I didn't know that. Last year we installed a propane fireplace to offset the high electric heat cost. Fantastic savings last year. Now this morning I read that oil heating is getting close to electric heat cost. Glad I didn't go that way, but I didn't know why the price of the propane fluctuated. Are you in the propane business?

[bigpatsfan]

I am not in the propane business, just a long time customer who has seen his costs rise from less than a $1.00 a gallon to over $3.00 a gallon and was wondering why?

[meteotrade]

Interesting website: http://www.nhclimateaudit.org/calculators.php

Propane and Kerosene take the prize as the most expensive heating method in NH. Wood is the big winner.

[bigpatsfan]

Metrotrade, thanks for the link... it is very informative...

[kjbathe]

Originally Posted by Sculpin

Many of you here on this site care about the little things... your Propane Supply choice is easy, Eastern Propane!

I joined OTEA based on the reviews and my assessment that it was a no-brainer. The quoted rates came in and again I was pleased. But I have had no success switching to and becoming a customer of Eastern.

Over the past three weeks I have made four phone calls with very long hold times (and one disconnect 10 minutes in...) before I finally got to someone in propane sales. That person couldn't help me and forwarded me to another rep for service, but that rep was on vacation for a week (voice mail). Another call back to Eastern (main number from the web site) and I got a rep who took my info and OTEA member number, but said I needed to talk to the outside sales rep in Loudon regarding the free site survey and he'd forward my info and have him call me. Now I have three calls into the outside sales rep in Loudon and haven't heard back.

I had the same impression of Eastern as Sculpin -- lots of local advertising, supporter of Meadowbrook, seemed to be a good company... But if I have to work this hard to become a new customer of Eastern in July, what's going to happen when I am a customer and really need timely support in January?

My current gas supplier, Dead River, costs a little more but the level of service has been great. OTEA and Eastern were worth a shot, though.

[wifi]

Perhaps they are getting flooded with people switching over due to the OT deal, along with vacation time for their employees?

I have had Eastern for decade(s), most of it when I was a member of OT and never had a problem. (Even when they were delivering Moultonboro out of Rochester) Well, once I did, but that time I was a little short on cash and they used a mighty big padlock

[hazmatmedic]

Originally Posted by kjbathe

My current gas supplier, Dead River, costs a little more but the level of service has been great. OTEA and Eastern were worth a shot, though.

My suggestion to anyone who wants to keep their current fuel dealer is to talk to a manager of your supplier and ask to meet the price. Dead River should be able to do that.

I have been a member for 4 years and there is no doubt, OTEA, has saved their members a lot of money over the years, but that is coming to an end and it begins this coming heating season.

The reason, is this year's pricing for both Eastern and Irving and the marketing scheme of which this alliance is based upon. The fuel companies offered these low prices (just barely above the cost of the product) in order to gain marketshare. These prices were subsidized by their other customers who paid at higher rates. ex: member pays $1/gal and nonmember pays $2/gal, which averages out to $1.50/gal. That is a sustainable profit when the product costs $1/gal. But, when the membership out buys the nonmembership, the price must go up to meet profitability. This is what happened this year. If you follow nymex.com and the cost of fuel, the OTEA price for this year should be less than $2.15/gal. That's more than 50 cents per gallon by my calculation.

The membership is too large now and the price negotiation is limited. We can only hope another alliance is formed and start the process over again.

[Lakegeezer]

Has anyone gotten a message about this year's OTEA pricing? Its my first year as a member and I know their prices are late in coming out - but I'm worried I may have missed the email or something.

[hazmatmedic]

here you go geezer:

http://www.otchoice.com/IrvingPricing08-09.htm

http://www.otchoice.com/EasterPricing2008.htm

[Lakegeezer]

Thanks Hazmatmedic. $2.71 from Eastern for 700-1200 gallons per year. The source is making out pretty well. The spot prices today (I assume this is wholesale) are between $1.85 to $1.95. That's about 90 cents per gallon or 47% profit from first buyer to my tank. That seems excessive but maybe its been that way all along.

[hazmatmedic]

The prices you are looking at are in Kansas and Texas. That's like looking at gasoline staion prices there; apples and oranges. Eastern gets most, if not all, by rail and that would come from Canada.

But, compared to previous years, their margin (from rack price only, many more costs have to be added on) was between 15% and 20%. So yeah, it is higher this year. Still an ok price, but only time will tell. Oil is dropping daily right now, but that could change in an instant, and probably will.

[dpg]

Why are wood pellets so much more efficient than just "plain wood?"

[hazmatmedic]

That doesn't have as much to do with the products but with the heating units themselves. There are variations of efficiencies on all fuel sources depending on the design of the system, which includes most importantly, the heat exchanger. Just because a heating system is new, doesn't mean it's efficient. There was some erroneous information comparing oil, propane and wood efficiencies on this forum. Electric is 99% efficient, wood is 10%-75%, propane 50%-99%, and oil 20%-90%. Single pass, triple pass, condensing units all will have different efficiencies even with the exact same fuel. Even oil has increased its efficiency with the blue flame burners, which are 90+, but everytime they fire or shut-off, they lose efficiency.

Pellet stoves can be more efficient then wood because it maintains an even heat by dropping single pellets onto a minimal flame reducing heat loss through the vent and extracting more of the btu's before losing them to the atmosphere.

If you cannot touch your vent pipe without burning yourself, your efficiency is below standards by today's technology.

[Lakepilot]

We belong to Our Town Energy Alliance and had a delivery of propane on 12/5 of 350 gallons. I've had two answers from Irving as to the non alliance price on that date and the alliance price. Propane pries aren't posted like fuel oil. We have committed to an annual usage of 2200 gallons. We paid $2.689 for the 12/5 delivery. Our last call to Irving indicated the non alliance price for 350 gallons was $3.94, which frankly I find very hard to believe with oil prices where they are now and knowing that propane btu content is 91,000 versusx 135,000.

What are others paying for propane and should I switch to oil??

[hazmatmedic]

The $3.94 a gallon was for a yearly usage of 350 gallons. Your usage is 2200, so you must ask them how much for 2200 gallons a year, if you were to get a delivery today. Propane is priced by scale usage and oil is priced by the competitve daily market. Those are general historic schemes. There are many options though.

[Pineedles]

We don't commit to a specific amount but our propane dealer knows we use the fireplace to heat the house, and also heat the water as well as a propane stove. We probably go through 2,000 gals. per year. Current pricing is 3.07 per gal. We're in CT but the pricing seems pretty much the same throughout NE.

[Lakegeezer]

Our Town Energy Alliance came out with prices for Eastern Propane for the 2009-2010 heating season. Prices are down 90 cents per gallon from the heating season we're just finishing up on. That means a $1000 or so bucks I won't have to spend next year. Example price for 1000 gallons is $1.81 if paid within 10 days and $1.91 NET 30.
http://www.otchoice.com/eastpr10.htm

[gravy boat]

Lakegeezer,

We are a member as well and were surprised at the .90 cent lower price per gallon. But we'll take it! Our friend recommended we join a few years ago -- and we haven't been disappointed. ;-)

GB

[Pineedles]

Just a quick update on our first fill up of the season here in CT. $2.14 per gallon. What are you folks getting now that fall is here? Per my post of jan.9th, I use 2000 gallons per year, no committment to minimum usage.

[HUH]

Just quoted 2.69 by Irving

[hazmatmedic]

I have stated before that propane is based upon annual usage.

Any price quoted by a supplier without usage is unsubstantiated. It is like giving the answer to a math/physics problem without units.

Irving is quoting $2.049 for 1000 gallons for new customers, but existing customers are charged more. It is designed to lure competing supplier's customers over to their side for that year and then move the price up. It is just capitalistic marketing and is done in almost every industry.

Suppliers need to price their fuel with competing companies or risk losing market share. But the "gimmick" of a one time lower price from the "new" supplier may not be worth it unless the price differential is in the hundreds of dollars. But you could be risking the service side of the equation and that also includes the integrity of the supplier's decision makers.

"Be fair and honest every day of your life"