Propane’s tale of the tape

May 1, 2005 By    

The American Petroleum Institute reports that nationwide retail sales of propane – excluding chemical use – in 2003 was 11.8 billion gallons, a 1.1 percent drop-off from 2002 sales.

 Patrick Hyland
Patrick Hyland

Top propane retail sales by state for combined residential, commercial, engine, farm and industrial uses in 2003 were:

1) Michigan (998.7 million gallons, up 6.2% from 2002)

2) Texas (933.4 million, up 9.3%)

3) North Carolina (559.3 million, down 2.6%)

4) Missouri (514.8 million, down 8.9%)

5) Illinois (492.6 million, up 8.5%)

6) Iowa (464.9 million, up 3.9%)

7) Wisconsin (462.9 million, down 15.4%)

8) Minnesota (458.1 million, down 9.3%)

9) Ohio (442.3 million, down 3.0%)

10) Indiana (429.6 million, up 11.4%)

The annual API report has served as the sole measuring stick for the propane industry as a whole for the last 18 years. That is about to change.

Much more telling is the detail offered in a March report prepared for the Propane Education & Research Council by consultants Energy and Environmental Analysis, Inc. and Wirthlin Worldwide as part of its million-dollar Market Metrics Initiative. Its exhaustive examination of dozens of data sources beyond API numbers offers a far more insightful look at the complex factors that drive our industry’s success. It’s the kind of data our industry has never had, and should be invaluable in assessing performance and guiding future strategies.

For example, U.S. census data shows that the number of propane-heated households increased by about 1.6 million from 1990 to 2000. In that time, the overall market share for propane-heated homes rose from 5.7 percent to 6.5 percent.

The rate of growth in propane households has slowed since 1999 with significant regional variations. Propane market share growth in the residential heating market has been strongest in the West and Northeast, while the market share in the South and Midwest has remained relatively unchanged the last several years.

By comparison, the natural gas share of households increased from 51.3 to 52 percent from 1999 through 2003.

Warmer winter weather has skewed the impact of our sales growth during this time. Had we seen “average” winter weather from 1998 through 2002, residential propane consumption would have added 400 million gallons per year, according to the consultants.

Those are all critical points, since the largest source of revenue for most propane marketers is from sales to residential users.

As with individual propane companies, it takes more than raw sales numbers to adequately assess our industry’s progress. We must be able to answer why and how sales collectively grew or fell, and understand how that performance stacks up against our competitors.

That’s the only way to effectively plot a course to move the industry forward.

Patrick Hyland Editor

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