# So this is what I was told today



## heaterman (Jan 25, 2014)

And it's a pretty good lesson for all of us here because it could happen in many types of things we take for granted. Things like Electricity, food products, grains like corn, wheat or oats. Stuf we use every day without thinking about it. 

Regional LP distributors bought the supply for this winter early last summer. The contracted for a "normal" amount of product. That product has been used up plus any cushion they keep due to the sustained cold temps across the USA. The demand simply outstripped the inventory on hand.

The refiners/LP producers fulfilled their contractual obligations to these regional suppliers and also have other contracts for xxx gallons with other users. Mainly Europe where fuel is much higher than here. Those contracts have to be met also.

These regional gas suppliers now have no option but to pay the market rate and for the rest of the world, that is $3-4.00/gallon. 

I'm hoping this is short lived and supplies free up because this could get really ugly by the time winter breaks.


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## BillsWS (Jan 26, 2014)

Heaterman, I was told by my supplier here in the U.P. that if I were not on contract I'd pay over 4 per gallon.  I have heard rumors of over $5.00 per gallon.  Getting ugly is exactly how I describe it and its going to get uglier!


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## jebatty (Jan 26, 2014)

Capitalism at its best. The sole goal is to make profit, the only responsibility is to the bottom line, short term demand in inelastic so the price can go sky high and people will have to pay. Economics 101.


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## blades (Jan 26, 2014)

Same old line I been hearing since the mid 70's, Bottom line is any excuse is a good one to raise prices, or add surcharges. Even better when it is in a semi-non regulated commodity like propane, or waste disposal.


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## Doug MacIVER (Jan 26, 2014)

back many years ago I had to follow the hide market for leather. leather at the hide level is a commodity. our contracts were just that a contract, price til x number produced. changes up at the commodity level raised hell at the factory level. simple difference make money to pay employees and all, or lose money and go out of business. today at the energy companies they contract the services of a wsi or weatherbell to forecast their needs. the better your record the more customers they garner. one of the reasons I like reading what those guys have to say. so here is wsi thru feb http://www.wsi.com/blog/energy/sub-...ated-to-continue-through-the-end-of-february/


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## henfruit (Jan 26, 2014)

Besides heating degree days to worry about, I have hay degree days. When it this cold they all need a little more to keep" there" boilers running.


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## Pat53 (Jan 26, 2014)

BillsWS said:


> Heaterman, I was told by my supplier here in the U.P. that if I were not on contract I'd pay over 4 per gallon.  I have heard rumors of over $5.00 per gallon.  Getting ugly is exactly how I describe it and its going to get uglier!



Bill, my buddies daughter just got 100 gallons Friday (max she could get) and paid $5.69/gallon ... plus 6% sales tax !! That will last her about 10 days maximum, probably less with -20F temps coming in tonite and lasting the next 3 days at least. This is already causing financial hardship for a lot of people and winter is only 1/2 over. Some places in the western U.P. are charging over $6/gallon....

When I see situations like this I remind myself that all the work I do to collect and process my firewood is definitely worth the effort. I can't imagine having to spend $6-8K on propane to heat my house for the winter   Yikes !

BTW, where are you in 'da U.P.?

Pat


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## ryooper (Jan 26, 2014)

Lp just went to 6.10 a gal yesterday here. I live in northern Menominee county. I lot of people hurting for fuel round here.


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## BoilerMan (Jan 26, 2014)

What have the #2 heating oil prices been, and what are they now?  Here in the far NothEast heating oil is king and has been since the coal era of the 50s.  There has been a HUGE transition to LPG in the past year, and it has kept me very busy this summer and has been predicted to do so next summer as well. 

TS


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## Fred61 (Jan 26, 2014)

On my way home from shopping I came up behind an oil delivery truck that had the price posted on the back of the tank. $3.78/gal.


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## Clarkbug (Jan 26, 2014)

Have been hearing lots about the propane shortages hitting everywhere, which is really unfortunate for those that need it.  What I wonder about is the possibility of switching to LNG.  A friend sent me an article, that admittedly was very one sided, but was discussing the construction of Natural Gas liquification plants for prepping NG for export.  Personally I think its a bad idea to export any of our energy sources, since all you hear about is limited demand and prices have to increase...

But this shortage highlights the idea that perhaps there could be a market in this country for LNG?  I dont know the chemistry behind it, or a comparison of the energy densities of the fuels, but would be curious if its a market that could be developed here to help keep prices in check.


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## phantomblack (Jan 26, 2014)

Here in southeast wisconsin the price Friday was 5.39 per gallon. Rumors are just that, rumors but the lady I talked to said she thought it may peak at 8.00 per gallon.


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## Seasoned Oak (Jan 26, 2014)

I guess most folks cant store enough propane for the whole winter. Probably not practical to do so. Makes it a gamble,so next best thing is a price lock contract and a wood stove or some type of solid fuel burner.


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## Coal Reaper (Jan 26, 2014)

Fred61 said:


> On my way home from shopping I came up behind an oil delivery truck that had the price posted on the back of the tank. $3.78/gal.


Thats about what its been in NJ.


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## Fred61 (Jan 26, 2014)

Clarkbug said:


> Have been hearing lots about the propane shortages hitting everywhere, which is really unfortunate for those that need it.  What I wonder about is the possibility of switching to LNG.  A friend sent me an article, that admittedly was very one sided, but was discussing the construction of Natural Gas liquification plants for prepping NG for export.  Personally I think its a bad idea to export any of our energy sources, since all you hear about is limited demand and prices have to increase...
> 
> But this shortage highlights the idea that perhaps there could be a market in this country for LNG?  I dont know the chemistry behind it, or a comparison of the energy densities of the fuels, but would be curious if its a market that could be developed here to help keep prices in check.


I'm ignorant of what it takes to handle LNG but I suspect it is not as easy as LPG. There's an outfit in the Burlington Vermont area that went into business last year liquefying natural gas from the pipeline and selling it to businesses that want to get off oil. Putney paper company in southern Vermont is one of the customers. I suspect there must be a reason for the way they are handling it. What they do is liquefy it and transfer it to the trailer and then park it at the business which uses it right off the tank and then they just swap out trailers when more is needed. Transferring it in the field must be a difficult process in order to justify the extra cost of leaving a trailer off the road for the time it takes to use the gas.


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## Boil&Toil (Jan 26, 2014)

Clarkbug said:


> perhaps there could be a market in this country for LNG?



L(liquid)NG is a cryo-refrigerated liquid (-260F). It only makes sense in LARGE quantities, such as the ships they are using to transport it, or occasinally something as small as a tractor-trailer cryo-tanker. It's comparatively expensive to produce. C(compressed)NG is being used in some bus fleets, etc. - but it does not play well long-haul, since it needs about 4 times the space of diesel fuel for the same energy. It also means having a storage tank at ~3,300 PSI in the vehicle - or, if it was to be used for home purposes, next to your house. That also makes it comparatively hard to "home deliver" as the tanker would need to  have a high pressure compressor on-board to fill tanks beyond the first part of its run.

For home-heat scale, off pipelines, the fact that propane is easily liquified at moderate pressure makes a huge difference in practicality - the truck can fill tanks as long as it has liquid in the bottom, and when it doesn't, it's effectively empty anyway.

Pipelines are the most effective connection to natural gas; but I don't expect to see one on my road, pretty much ever. Just not enough potential customers.

http://publicservice.vermont.gov/publications/fuel_report


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## __dan (Jan 26, 2014)

BoilerMan said:


> What have the #2 heating oil prices been, and what are they now?  Here in the far NothEast heating oil is king and has been since the coal era of the 50s.  There has been a HUGE transition to LPG in the past year, and it has kept me very busy this summer and has been predicted to do so next summer as well.
> 
> TS



http://stockcharts.com/h-sc/ui?s=$hoil

http://stockcharts.com/h-sc/ui?s=$natgas

http://www.barchart.com/charts/futures/PNY00


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## Clarkbug (Jan 26, 2014)

Boil&Toil said:


> L(liquid)NG is a cryo-refrigerated liquid (-260F). It only makes sense in LARGE quantities, such as the ships they are using to transport it, or occasinally something as small as a tractor-trailer cryo-tanker. It's comparatively expensive to produce. C(compressed)NG is being used in some bus fleets, etc. - but it does not play well long-haul, since it needs about 4 times the space of diesel fuel for the same energy. It also means having a storage tank at ~3,300 PSI in the vehicle - or, if it was to be used for home purposes, next to your house. That also makes it comparatively hard to "home deliver" as the tanker would need to  have a high pressure compressor on-board to fill tanks beyond the first part of its run.
> 
> For home-heat scale, off pipelines, the fact that propane is easily liquified at moderate pressure makes a huge difference in practicality - the truck can fill tanks as long as it has liquid in the bottom, and when it doesn't, it's effectively empty anyway.
> 
> ...



Thanks for the great info!  I knew there must be some practical reasons or it would have happened already...


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## simple.serf (Jan 26, 2014)

When I called for prices on #2 last week, it was $3.45/gal if I ordered 165 gal or more. I am planning to order 170 gallons this week, which should get me to the end of June. Last week of June prices are typically the lowest for the year. I'll fill the farm tank and fully fill the house tank then. Still stuck with oil for DHW and for these really cold days when the stove can't keep up. 

There's a reason I have been lurking in the boiler room for a few months... A Vedolux with the pellet kit sounds pretty good right now.


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## Coal Reaper (Jan 26, 2014)

Order oil july fouth. Consistantly about near the lowest and easy to remember.
Edit: thats only if you HAVE to!


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## maple1 (Jan 26, 2014)

simple.serf said:


> When I called for prices on #2 last week, it was $3.I went5/gal if I ordered 165 gal or more. I am planning to order 170 gallons this week, which should get me to the end of June. Last week of June prices are typically the lowest for the year. I'll fill the farm tank and fully fill the house tank then. Still stuck with oil for DHW and for these really cold days when the stove can't keep up.
> 
> There's a reason I have been lurking in the boiler room for a few months... A Vedolux with the pellet kit sounds pretty good right now.



Pellet kit? That would be very cool - but you've got 4-5 years of wood in your yard?

That's one reason i went the way I did - three potential fuel choices with one unit.


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## simple.serf (Jan 27, 2014)

maple1 said:


> Pellet kit? That would be very cool - but you've got 4-5 years of wood in your yard?
> 
> That's one reason i went the way I did - three potential fuel choices with one unit.



Exactly. I want options. We burn about 10 face cords a year in our EPA stove. I would like to be able to get away from using oil, even when I or my wife are not able to tend the boiler. Pellets seem to me like a reasonable alternative to oil when needed.

I may go with a pellet unit as an add on for now to take much of the load off of the current oil burner, and add the boiler that I want (Econoburn 150 w 1000 gal storage in a separate boiler building) when the finances permit.


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## willyswagon (Jan 27, 2014)

Clarkbug said:


> Have been hearing lots about the propane shortages hitting everywhere, which is really unfortunate for those that need it.  What I wonder about is the possibility of switching to LNG.  A friend sent me an article, that admittedly was very one sided, but was discussing the construction of Natural Gas liquification plants for prepping NG for export.  Personally I think its a bad idea to export any of our energy sources, since all you hear about is limited demand and prices have to increase...
> 
> But this shortage highlights the idea that perhaps there could be a market in this country for LNG?  I dont know the chemistry behind it, or a comparison of the energy densities of the fuels, but would be curious if its a market that could be developed here to help keep prices in check.




There was a story on the radio that in New Brunswick Canada LNG prices are skyrocketing. Up between 108-140% over the same time last year.
The owner of one commercial business said he fired up the old oil boiler after his LNG bill for December was $26,000!
This is the same LNG that is produced in Nova Scotia, piped through New Brunswick on the way to the Eastern US.

It sure makes 5 cord of well seasoned hardwood look cheap!


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## Coal Reaper (Jan 27, 2014)

Coal Reaper said:


> Thats about what its been in NJ.


 oil went up over the weekend.  $3.89 this morning.


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## willyswagon (Jan 27, 2014)

Coal Reaper said:


> oil went up over the weekend.  $3.89 this morning.




$1.13/L or 4.35/US gal here on PEI.


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## Doug MacIVER (Jan 27, 2014)

willyswagon said:


> $1.13/L or 4.35/US gal here on PEI.


Monday morn hanover, mass price $3.65


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## DBNH22 (Jan 27, 2014)

I am truly sorry to hear about the hurt all of you in the midwest are going through at the moment due to the propane shortage.  From what you guys are saying on here and from what I've been reading in the news it seems like there may be some families in the midwest that are going to be faced with some very tough choices pretty soon such as "do we pay for heat or food today."  That's a damn shame.

Being a New Englander that has never used propane for heat I'm curious what the normal price of propane has been for you over the past several years.  Until this year I've always heated with oil.  Oil in New Hampshire/southern Maine has ranged from 3.49 - 3.99 per gallon over the past several years and right now in my area seems to be hovering around 3.69 - 3.79.

If there is any positive that can come from the propane shortage/unusually cold winter this year hopefully people will be pushed to educate themselves about the air sealing and insulation within their home.  We on this website know how costly poor and or insufficient insulation and air sealing can be but it seems like the average person thinks "oh it's cold outside and oil or propane is expensive so it is what it is and there's nothing I can do about it."   From everything I've read I've learned that the vast majority of homes in this nation would actually benefit significantly from improvements, sometimes very small and cost effective improvements, with regard to insulation and air sealing.


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## arbutus (Jan 27, 2014)

In Michigan I had a Shell tank, which became Amerigas, and paid anywhere from $1.50 - 2.69 a gallon between 2004 and 2012.  We moved, so I have a different supplier now.  The summertime price was $1.65/gal which I thought was great, last fill was $2.50 a gallon in late December, and I don't want to know what it is currently.


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## goosegunner (Jan 27, 2014)

Just heard today that it is getting hard to even get in some areas of WI. People are starting to offer more money to suppliers to move to top of the list......

gg


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## Paste (Jan 27, 2014)

Dana B said:


> Being a New Englander that has never used propane for heat I'm curious what the normal price of propane has been for you over the past several years.



Last year, we paid $2.80/gal for propane and now its up to $3.50-3.60.  Switching to the Biowin pellet boiler is going to save us over $2,300 this year when compared to propane.

I grew up in the midwest and I'm very empathetic to what they're going through.  No one wants to turn down the temp and be cold to eek out a few more days of heat because they can't get a refill, or start making sacrifices in other areas like food because of soaring fuel prices.


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## STIHLY DAN (Jan 27, 2014)

Price around here also depends on how much you use. Gas stove, gas dryer, Only using 250 gal a yr your looking at $5 a gal in the summer. So back up heat if propain is not the best.


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## goosegunner (Jan 27, 2014)

STIHLY DAN said:


> Price around here also depends on how much you use. Gas stove, gas dryer, Only using 250 gal a yr your looking at $5 a gal in the summer. So back up heat if propain is not the best.




Some of the dealers around here started pulling that a few years ago. Had my tank swapped the next day when they told me that.

Kind of like kind of like paying more for gas to put in your lawn mower because you don't buy as much as a car.....

gg


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## Coal Reaper (Jan 27, 2014)

goosegunner said:


> Some of the dealers around here started pulling that a few years ago. Had my tank swapped the next day when they told me that.
> 
> Kind of like kind of like paying more for gas to put in your lawn mower because you don't buy as much as a car.....
> 
> gg


I would murder somebody


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## Seasoned Oak (Jan 27, 2014)

We have scads of former oil burners here proudly chanting the "get off oil" battle cry. I guess we can add some "get off LPG" folks by next year. One drawback they both have in common is ,someone besides the homeowner controls the price and also the supply.


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## STIHLY DAN (Jan 27, 2014)

goosegunner said:


> Some of the dealers around here started pulling that a few years ago. Had my tank swapped the next day when they told me that.
> 
> Kind of like kind of like paying more for gas to put in your lawn mower because you don't buy as much as a car.....
> 
> gg



It actually makes sense to me, So I don't mind it. They have to pay a driver, fuel and the truck for say $300 fill up, when for the same time and expense other than the LP and get $1,000. I bought a couple 100# tanks and just bring them to tsc for a fill up. About 1/2 the price $2.79.


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## martyinmi (Jan 27, 2014)

I wonder if it would be legal to sell propane either back to your supplier or a private party if you had contracted 1200 gallons but were on pace to go through less than 600?
One of my friends contracted @ $1.89. Could he could legally sell it and double his money?


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## bmblank (Jan 27, 2014)

Check the contract.
If be willing to bet they say it's not for resale. That's not to say you couldn't do it under the table.


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## shawntitan (Jan 28, 2014)

I'm in Southern NJ, a buddy of mine paid $5.50 a gallon for 100 gallons of propane today... Natural gas isn't an option, we're too far out in the country, not profitable for the gas companies to run the lines out here... Thank god for my coal boiler, LOL.


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## heaterman (Jan 28, 2014)

__dan said:


> http://stockcharts.com/h-sc/ui?s=$hoil
> 
> http://stockcharts.com/h-sc/ui?s=$natgas
> 
> http://www.barchart.com/charts/futures/PNY00



The issue as I understand it is not so much that the wholesale market price has gone up. (only $.50+/- since October according to the chart) It's that supplies in the area affected by the c-c-c-c-cold weather are non existent. Additional inventory has to be brought in from long distances away and this adds substantially to the cost.
Coming back from an Ohio delivery yesterday traveling I-75 and US23, I saw numerous LP tankers headed north. License plates on the trucks/trailers were from all over the US as far away as Texas. I passed 6 different tankers in the stretch between Ann Arbor and Flint. 2 others in a real hurry passed me!


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## jebatty (Jan 28, 2014)

Love to see LP tankers in a hurry down the highways.


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## heaterman (Jan 28, 2014)

Just got off the phone with a driver for one of the LP companies in these parts. Their customer base is well into the thousands and right now they have 2 weeks supply of gas. They are hoping that with all the states declaring emergencies that transport restrictions will be lifted and they can build some stock again. He said they are not price shopping at all but buying it where ever they can and at whatever price it is.


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## Sawyer (Jan 28, 2014)

Price has gone down $0.55 since Thursday with one supplier in our area. It may be due to the governors' meeting yesterday. There is also talk in the legislature about temporarily easing weight restrictions 20-30% to help transportation.


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## DBNH22 (Jan 28, 2014)

heaterman said:


> He said they are not price shopping at all but buying it where ever they can and at whatever price it is.




They're not doing it out of the kindness of their hearts.  The extra cost will get passed along to the consumer.  It always does, whatever the product.


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## ihookem (Jan 28, 2014)

Sure they are doing it out of the kindness of their hearts. I do all my work like that, for a price! But really, what LP guys take as new customers is a favor, they are vey busy now. Guess who will pick up new orders next fall?There are some people out there that just plain . care.  Also, people need to get propane in the summer time and have enough for a cold winter. Noone here goes to their wood pile and say,, " hey I only have a few more logs left". I am keeping the house a bit cooler this year cause I could run out . I was not expecting anything like this . -17F this morning. It is amazing how much less gas a house uses if ya just go down 5 degrees and  put a 40W heat pad under your butt while on the couch like my wife does. Way cheaper than turning up the heat.


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## goosegunner (Jan 28, 2014)

STIHLY DAN said:


> It actually makes sense to me, So I don't mind it. They have to pay a driver, fuel and the truck for say $300 fill up, when for the same time and expense other than the LP and get $1,000. I bought a couple 100# tanks and just bring them to tsc for a fill up. About 1/2 the price $2.79.



It makes no sense to me because the quantity of the fill wasn't the issue. It was that I use less than 500 gallons for the year. The fill was no different than any other customer. Actually, I would call when it was needed vs a customer being on keep full plan who would get less per delivery.

gg


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## Rick Stanley (Jan 29, 2014)

There have been local news reports of a wood shortage also. Local firewood dealers are getting on the band wagon. One guy is up to $300 for oak that is being split now that has sat in log form for one year. His ad says " probably won't find better wood this time of year".


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## BoilerMan (Jan 29, 2014)

If I were burning LP for heat (or oil for that matter) and I was not able to get a delivery and was in fear of running out of fuel.  I'd be buying up some electric heaters.  Save the LP for hot water, use simple electric resistance for heat.  Turn the (electric) burners on and the oven with the oven door open. 

TS


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## BoilerMan (Jan 29, 2014)

goosegunner said:


> The fill was no different than any other customer. Actually, I would call when it was needed vs a customer being on keep full plan who would get less per delivery.


Same thing here, You'd think it would be the amount of fuel they deliver.  If you own your own tank, and only have it filled every three years, who cares.  800 gal is 800 gal, one delivery one cash payment. 

I went out and bought two 100# cylinders.  These last me about 18 months, for cooking and clothes drying.  I drop them off at a friend's house who owns a hunting camp and has countless 100# cylinders and uses 3000+ gallons/year.  The gas supplier just fills mine with all of his, and I write him out a check for the cheap price.  $2/gal last July, when I called the same company and asked how much it would be to fill my two tanks they quoted me over $4/gal....... Now who is the wiser?   

TS


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## goosegunner (Jan 29, 2014)

BoilerMan said:


> If I were burning LP for heat (or oil for that matter) and I was not able to get a delivery and was in fear of running out of fuel.  I'd be buying up some electric heaters.  Save the LP for hot water, use simple electric resistance for heat.  Turn the (electric) burners on and the oven with the oven door open.
> 
> TS




For a few years I had a Electric plenum heater in my lp forced air furnace. The power company put it in for free and it was on load management on its own meter. Because of that the electric price was 1/2 the normal price. When I put in the wood boiler I removed it. I do still have it and all the stuff needed for it. The meter fees and power cost adjustments made it more sense to burn lp when the priced dropped.  Well look at the lp price now........

I just put in a new lp water heater, kind of wishing I would have went with electric.  Well maybe it will push me to get wood boiler DHW hooked up.

gg


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## BillsWS (Feb 1, 2014)

Pat53 said:


> Bill, my buddies daughter just got 100 gallons Friday (max she could get) and paid $5.69/gallon ... plus 6% sales tax !! That will last her about 10 days maximum, probably less with -20F temps coming in tonite and lasting the next 3 days at least. This is already causing financial hardship for a lot of people and winter is only 1/2 over. Some places in the western U.P. are charging over $6/gallon....
> 
> When I see situations like this I remind myself that all the work I do to collect and process my firewood is definitely worth the effort. I can't imagine having to spend $6-8K on propane to heat my house for the winter   Yikes !
> 
> ...


 
Hello Pat,

Sorry, I haven't been on in awhile.  I live 10 miles south of Marquette.  Usually 3 - 10 degrees colder out here away from the lake (summer its warmer though).  Still working through the gasser inside or the conventional (Portage & Main) boiler outside.  I cut down my propane usage 61 gallons last month as I am running my BK Sirocco 24/7 now.  I am going to pull out my DHW tankless propane fired boiler that has been sporacially giving me trouble and put in an electric water heater.  I am fortunate to be on the city of Marquette owned power grid with low kwh prices.  In the winter of course DHW will be wood fired.  But for summer use, electric will be more consistent.  I do enjoy C/S/S firewood, so no hardship for me there either.  It IS WORTH it.  I have a quote up on my mirror that I copied out of a book on meditations and seeking enlightenment years ago:  "Before enlightenment, chop wood and carry water, after enlightenment, chop wood and carry water"

Bill


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