Propane Brain Freeze

Roy Willis, CEO, Propane Education & Research Council

In the last few weeks I’ve been bombarded by questions from reporters, as have many others in the propane industry.

I’ve explained how record crop drying and plunging temperatures have caused propane demand to surge, how even temporary pipeline, gas processing, and refinery shutdowns disrupted propane production, and how difficult it has been getting the pipeline capacity, trucks, and rail cars to move propane from where it is stored to where it is needed, and how available supplies are shrinking fast.

Here’s one account.

“How can this be happening?” the reporter asked. “Looking at the data, I see that the United States is producing more propane than at any time in the last 10 years, more than enough propane to supply the country’s needs.”

“You’re right,” I responded. “It’s just that a great deal of that propane is not in the United States any more. It’s being exported as fast as dock space can be built.”

“You cannot be serious!” the reporter said.

“Yes, we exported nearly twice as much in 2013 as we did in 2012, and more that year than in 2011,” I explained. “In less than a decade propane exports went from practically zero to a volume equal to about half the size of the country’s retail demand.”

“Doesn’t the government regulate exports of propane like it does oil and natural gas?” the reporter continued.

“No,” I said.

“Why not?” he shot back.

“That’s a question for Congress and the Administration,” I said.

He looked at me quizzically, as if searching for the next question. “Look,” I said, “propane is considered a byproduct of oil and natural gas and is only about 2 percent of the energy America uses, so it doesn’t get the kind of policy attention that other big-volume fuels do.”

“Should it?” he asked.

“Yes! Propane is used in every segment of the economy — residential, commercial, agriculture, transportation, power generation, and industrial uses,” I replied. “Millions of Americans rely on it to meet basic energy needs. It can do things and go places other fuels don’t. Propane is different from other natural gas and oil byproducts, and we should consider treating it differently. If we don’t, the situation could get worse and more costly.”

I could go on, but there’s another reporter on the line. Read more here.