Regional spotlight: Propane fuels the South

Our quarterly series examines the unique geographical nature of the propane industry. This month, we look at the South.

Look for other regional breakdowns in 2023

January: Propane fuels the Northeast

July: Propane Fuels the Midwest

October: Propane Fuels the West

Map: Rainer Lesniewski/iStock / Getty Images Plus/Getty Images

About the South

Trailing only the Midwest in retail gallon sales by region, the South sells more than a quarter of all U.S. propane. The challenge is protecting and growing the industry here as electricity encroaches on the residential market. The region is a hotbed of natural gas liquids production, most notably from the Permian Basin in western Texas. When you think about the supply and demand dynamics of the propane market, you think of the Gulf Coast and the activity in the South.

Propane sales

The South accounted for 27.3 percent of total U.S. propane sales in 2021, up from 26.8 percent in 2020. Total propane sales in the region increased modestly, from 2.534 billion gallons in 2020 to 2.605 billion gallons in 2021. At 1.047 billion gallons, residential sales accounted for 40.2 percent of the region’s propane sales in 2021. It was the only market sector to lose gallons from the previous year, dropping about 7 percent from the 1.124 billion gallons sold in 2020. Propane continued to lose market share to electricity for household space heating in the region. Marketers in the South also sold 812 million gallons in the commercial sector, representing 31 percent of sales. Two of the top 10 states in propane gallon sales are from the South: Texas is sixth with 443 million gallons, and North Carolina is ninth with 375 million gallons.

2021 U.S. retail propane sales by region

2020 sales – 2,534 million gallons
2021 sales – 2,605 million gallons

The weather

Annual heating degree-days in the South increased by 2.2 percent in 2021 compared to a year earlier.

South Atlantic: 2,368

East South Central: 3,167

West South Central: 1,915

U.S.: 3,937

The Permian Basin is fueling NGL production. (Photo: freezeframes/iStock / Getty Images Plus/Getty Images)

Unique to the South

Hub of activity: The South is home to the nation’s largest propane storage and trading hub at Mont Belvieu, Texas – near Houston. The Gulf Coast accounts for about 55 percent of all U.S. propane inventories, which contribute to record U.S. propane exports. Propane was the largest commodity export product by volume in 2022 with almost 1.4 million barrels per day. The companies exporting most of the propane – Energy Transfer, Enterprise Products Partners, Phillips 66 and Targa Resources – are based in Texas.

Weather disasters: The South has been among the regions impacted by a variety of weather and climate events. Texas, Louisiana and Florida are the top three most affected states in the U.S. since 1980 with total damage costing $343 billion, $270 billion and $248 billion, respectively.

Propane Expo: The National Propane Gas Association holds its Southeastern Convention & International Propane Expo, the industry’s largest trade show now celebrating 75 years, in the region. After decades in Atlanta, the show has shifted to Nashville, Tennessee, and Charlotte, North Carolina. Charlotte will host for the first time in 2024 and 2025.

Notable state and regional associations: The Southeast Propane Alliance, composed of Georgia, North Carolina and South Carolina, formed in 2022 with John Jessup as president and CEO. The region also has seen a shakeup in association leadership, as Steve Ahrens took over the Arkansas Propane Gas Association, Laural Bunn assumed the reins of the Alabama Propane Gas Association and Amber Perry stepped up to lead the West Virginia Propane Gas Association.

Did you know? More than half of propane retailers in Gray, Gray & Gray’s 2022 propane survey said they operate their fleet vehicles on autogas. It’s the only region in the firm’s survey where more than half of respondents were fueling fleets with propane autogas.

Wages: Propane retailers in the South raised employee wages by 10 percent on average, according to LP Gas’ 2022 wage and benefits survey.

Other sources: Propane Education & Research Council’s Annual Retail Propane Sales Report (2021); U.S. Energy Information Administration