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North America is producing more propane than ever before but you would not think so, listening to Midwest and Canadian farmers and rural homeowners. The price of propane, used to heat homes and fuel businesses, has gone through the roof, doubling from the same period last year. Despite the frenzied drilling into the Bakken shale in North Dakota, farmers in the U.S. state complain of a shortage of propane, the gassy fuel that is a byproduct of crude oil and natural gas production.

So serious is the propane drought in this bitter winter that Canada's Energy Minister suggested that provincial governments should step in to regulate prices, if necessary. And for the first time, America's Federal Energy Regulatory Commission has ordered a pipeline operator to give priority to shipping propane from Texas to the Midwest and Northeast.

It sounds like an emergency but on the U.S. Gulf Coast, cargoes of liquefied petroleum gas, the generic name for propane and butane, are being loaded on to special tanker vessels for destinations in Europe, Asia and Latin America. You might think this is scandalous but it is just the market operating because all through last year America's LPG exporters were minting money, earning between $300 (U.S.) and $400 more per tonne than the product fetches in the U.S. If North Americans are indignant at the idea of paying more than $4 per gallon for propane, Asians and Europeans seem to think it is cheap.

Since 2007, the rising output of shale gas has brought with it an abundance of natural gas liquids, capable of being refined into propane and butane. These rapidly accumulated into a glut. In an effort to find a market for America's surplus LPG, export terminals were constructed and these came on stream as the continent plunged into a hideous winter. The U.S. is currently exporting more than 400,000 barrels a day of LPG, roughly double the rate of 18 months ago, according to Argus Media, the oil price reporting agency.

It's a story about markets and record winter temperatures but it is also one about infrastructure, notably pipelines. For an otherwise sophisticated economy, North America is very badly served with energy infrastructure. The clamour over propane prices echoes the outrage of recent years about expensive gasoline in the midst of a crude oil glut and spikes in the natural gas price. Consider the cost of wholesale propane, which sells for $1.50 in Texas but in the Midwest is almost double.

The North American energy universe is not so much a market but an archipelago of islands. For several years, a glut of crude at Cushing, Okla., kept the the price of oil at a huge discount to world prices. The pipeline bottleneck allowed a small band of local refiners to make hay, fuelling their plants with cheap crude while selling gasoline at high prices, benchmarked at New York Harbour, reflecting global oil prices. Meanwhile, Canadian crude oil remains stranded for want of pipelines to take it to U.S. refineries.

The oil barons of the late 19th century would find these stories strangely comforting. The power of Standard Oil before it was broken up by the Supreme Court, lay not in its control of oil wells but of railroads, the only transport between well and refinery until the Tidewater pipeline was built in Pennsylvania by independent oil producers seeking to break John D. Rockefeller's monopoly.

Rural Americans and Canadians battling with the cold, can draw some comfort in the knowledge that the futures market is predicting a sharp fall in propane prices towards the end of March. This spike is an extraordinary coincidence of events but it tells an important lesson: commodities always follow the easiest path to the highest price. It's something that the Standard Oil founder understood well; it is not clear, however, that the President of the United States has yet understood.