Domestic market changes to hold retailers’ attention in 2018

The increase in U.S. propane exports and export capacity has captured the industry’s attention for the last several years. Propane retailers’ awareness of the export trend is important because, according to energy industry consultancy ICF, the increase in U.S. propane exports can lead to higher domestic pricing volatility and risks of supply disruptions during winter periods from unexpected increases in demand.

In our December State of the Industry issue, ICF broaches the notion that retailers are actually becoming accustomed to these newer supply and export dynamics that have tied the U.S. propane industry to global markets. As retailers make this adjustment, they will face other issues closer to home, in traditional markets, as well as more opportunities to grow their businesses.

ICF says the retail propane industry is entering a period of demand-driven market transitions and moving away from supply-driven changes. ICF’s Michael Sloan and Eric Kuhle explain here.

EIA propane price forecast

The U.S. Energy Information Administration’s Short-Term Energy Outlook on propane and heating oil shows U.S. average propane prices for residential customers tracking 10 percent higher than last winter (and 12 percent higher for heating oil) through March. Higher crude oil prices, colder expected winter temperatures and lower fuel inventories are leading to the higher estimates. Read the full report here.

Line 5 update

Have you seen our update to the supply situation that developed in Michigan last year? In her September cover story, LP Gas Managing Editor Clara Richter wrote how concern over the structural integrity of Enbridge Line 5 caused Michigan lawmakers to begin considering alternatives to the 63-year-old pipeline that moves the crude oil and natural gas liquids from which the state and surrounding regions derive the majority of their propane. Late last year, the state of Michigan and Enbridge reached an agreement regarding Line 5. Read the latest on Line 5, including the reaction from the National Propane Gas Association.

Other supply-related headlines

• Blackline Midstream acquires Sea-3 Inc., propane terminal
• Pembina board of directors approves propane export terminal
• Inter Pipeline to build propane dehydrogenation, polypropylene complex
• AltaGas begins operations at North Pine NGL separation facility

LP Gas Propane Suppliers Guide

Don’t forget about our annual Suppliers Guide, a comprehensive listing of top propane product sources for you to consider for your supply needs. Check out our latest guide here.

We want to hear from you

How is your company faring halfway through the winter heating season? Has it been smooth sailing on the supply side or are challenges arising? We want to know about the supply-and-demand dynamics in your customer service territory. Please send your comments or industry concerns to LP Gas Editor-in-Chief Brian Richesson at brichesson@northcoastmedia.net.