Besides braving the cold this winter, Wyoming residents also will have to deal with high energy costs to heat their homes. Many Wyoming residents use propane, which has some advantages that will help keep costs down.
For those who heat with natural gas, this year will be brutal, according to the latest Winter Fuels Outlook report by the federal Energy Information Administration. The EIA estimates that natural gas prices will increase 28% over last winter, which will amount to a $931 increase in heating costs for the average American’s home over the winter.
Propane prices, the EIA predicts, will be similar this year as last winter.
Tom Clark, executive director for the Rocky Mountain Propane Association said that since propane is a byproduct of natural gas, its price is influenced by the natural gas market. Historically, propane use dips during the summer, so prices drop. Since the fuel can be easily transported and stored, it gives consumers a lot of flexibility as to when they buy their propane.
Donnie Baggs, manager for Suburban Propane in Laramie, said he encourages customers to fill up during the summer months when prices are low.
“By the time the cold weather hits, then they can have that extra propane to get them by so it’s not as costly,” Baggs said.
Clark said that inflation is impacting the prices of everything, so it may cause some increases in costs to residents. Even though the retail price of the fuel itself is steady, other costs will go up. Steel prices are on the rise, which means propane tanks also are more expensive.
Baggs said that, like all other industries, transport costs are going up, and drivers and service technicians are hard to come by. He said Suburban Propane has been fortunate to find enough people to keep the propane flowing to customers.
Cost of Business
Clark said any propane company looking to buy new trucks are going to have to make a hefty investment, and the lead times are quite long.
“There’s all sorts of things inside the propane business that are not just based on the price of the fuel itself, but the cost of doing business has just gone up this year — trucks, driver wages, benefits and diesel fuel. The combination of those things has made the price of the product go up,” Clark said.
Clark said there also are unknowns that may arise that can drive the prices up, such as natural disasters. In February 2021, when Texas had a deep freeze that led to huge increases for the demand for natural gas, propane prices were affected. Something like that could impact prices in Wyoming, but again, that’s only for those who buy the fuel during winter.
“Propane is a great fuel for that energy security, though. Because you can store it at your house or your farm or your business, and then you have that storage there that can last forever. It doesn’t go bad like gasoline,” Clark said.
Whatever the increase in heating costs this winter, it will hit the poor the hardest. In 2015, an EIA survey found that nearly one in three Americans reported challenges with paying heating costs. Almost 15% of those surveyed received a disconnect notice and 10% kept their homes at an unsafe temperature. This year could get worse for many people.
The EIA’s Winter Fuels Outlook report also is predicting a colder winter this year based on projections from the National Oceanic and Atmospheric Administration. Most of the country, according to the data, will a see slightly colder winter, which increases the number of heating days in the season. That will increase demand, and cold weather can also disrupt supply chains, the report notes.
Clark pointed out that, should the West see a cold winter, propane supplies are very good. That will help keep prices from ticking up should demand rise.