Report: U.S. propane sales snap five-year skid, trend upward

December 18, 2014 By    

U.S. sales of odorized propane rebounded from five straight years of declines, totaling 8.8 billion gallons and gaining 14 percent in the American Petroleum Institute’s (API) latest annual report, tracking state-by-state volumes and market trends.

API’s “2013 Sales of Natural Gas Liquids and Liquefied Refinery Gases” report, released Dec. 8, also reveals a rally in the residential market, which also had declined for five consecutive years before a near 19 percent increase in gallon sales, to 4.8 billion, from 2012.

More than 12 billion gallons were sold in 2000, but U.S. propane sales have been falling annually since totaling more than 10 billion gallons in 2007. Throughout the years, the industry has been influenced by a slow economy and housing market, customer conservation, energy competition and increased appliance efficiency. Propane industry leaders have focused on finding ways to return to a growth path.

The 2013 report marks the 30th year that API has conducted the survey, jointly sponsored by the National Propane Gas Association, the Propane Education & Research Council and the Gas Processors Association.

Fueling the farm
Propane sales in the 2013 report were supported by a significant increase in the agricultural market, which gained 31 percent from 2012 and totaled more than 1 billion gallons. This was due in part to record crop drying in 2013, leading to high demand by farmers in the Midwest and contributing to a regional propane shortage experienced during the 2013-14 winter heating season.

Some of the largest gallon increases in 2013 came from states in heavy crop drying regions of the country. North Dakota’s propane gallon sales increased about 41 percent in 2013, while Illinois, Michigan, Minnesota, Wisconsin and Iowa all experienced percentage increases in the low 30s. West Virginia’s gallon sales increase from 2012, at 45 percent, was also notable.

In a state-by-state breakdown, Michigan took over the top spot with about 512 million gallons in total propane sales, stopping California’s five-year reign and dropping it to second with about 484 million gallons. Rounding out the top five were Illinois (477), Iowa (417) and Minnesota (407). Iowa and Minnesota were newcomers to the top five from 2012.

The report also lists the top five states in the residential, commercial and agricultural sectors.

Michigan led the way in residential propane sales with about 392 million gallons, followed by Wisconsin (279), Illinois (268), California (221) and Minnesota (212).

In the commercial sector, California topped the list with about 89 million gallons, followed by Florida (85), Pennsylvania (83), Texas (82) and Maine (78), a newcomer to the top five from 2012.

The top five states in the agricultural sector made nearly half of all sales here. Iowa sold about 181 million gallons for farming purposes, followed by Minnesota (123), Illinois (83), North Carolina (82) and California (55).

Sales of natural gas liquids and liquefied refinery gas, which include propane, butane, ethane and pentanes plus, totaled about 47 billion gallons, a 6.5 percent increase from 2012, according to the report.

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