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Rural Americans brace for more expensive propane

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HOUSTON, TX - FEBRUARY 18: A person carries empty propane tanks, bringing them to refill at a propane gas station after winter weather caused electricity blackouts on February 18, 2021 in Houston, Texas. Winter storm Uri brought severe temperature drops causing a catastrophic failure of the power grid in Texas. About two million people are without electricity throughout Houston. (Photo by Go Nakamura/Getty Images)

Propane is at its highest price in a decade. Go Nakamura via Getty Images

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The roughly 5% of American households burning propane for heat are in for more expensive bills this winter.

The price of residential propane is averaging more than $2.60 a gallon, the highest it’s been in a decade. A colder winter would likely drive up prices even more. Rural parts of the country are bracing for the impact; take Shiprock, New Mexico, where residents only have a few options when it comes to home heating.

“Wood stoves, coal stoves, pellet stoves,” said Eugenia Charles-Newton, who represents Shiprock in the Navajo Nation Council. The other option is propane.

“And in some communities that don’t have clean water, it’s used to boil water,” Charles-Newton said, adding that many in her community are on tight budgets. “You find yourself having to decide, is propane more important than food? Is propane more important than gas to drive to work?”

Most U.S. households are heated with natural gas or electricity. Unlike propane, those markets are highly regulated, which somewhat insulates consumers from big price swings. Those energy sources don’t reach every corner of America.

“So if you’re up in rural Ohio or Minnesota, you don’t have access to natural gas because the pipeline system doesn’t get to that last mile,” said S&P Global Platts analyst Robert Stier.

At this point in a typical year, he said, U.S. propane producers would have plenty stored to sell domestically. This year, however, international demand has been exceptionally strong.

“So we’re going into winter, right now, with seasonally low inventories,” Stier said.

Jon Nelson lives in Rugby, North Dakota, about 50 miles from the Canadian border, and serves in the state House of Representatives. When propane prices spike, his community feels it.

“It impacts everybody but certainly the individuals that are on a fixed income,” he said. Nelson’s warning his constituents to budget for higher heating bills.

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