Tag: Propane Production

Global Events and Their Effect on Propane Markets

Navigating Propane Prices and Supply Amidst Global Changes Like many other industries, the propane market is significantly influenced by global events. From geopolitical tensions to environmental policies, various factors play a role in shaping propane prices and availability. Let’s explore how these global occurrences impact the propane industry and what it means for suppliers and… Continue reading Global Events and Their Effect on Propane Markets

Navigating Propane Prices and Supply Amidst Global Changes

Like many other industries, the propane market is significantly influenced by global events. From geopolitical tensions to environmental policies, various factors play a role in shaping propane prices and availability. Let’s explore how these global occurrences impact the propane industry and what it means for suppliers and consumers.

Geopolitical Tensions and Trade Policies

International relations and trade agreements have a direct impact on propane prices. For instance, political unrest in oil-producing regions can disrupt supply chains, leading to fluctuations in propane prices. Similarly, trade policies and tariffs can either ease or complicate the import and export of propane, affecting its global availability.

Environmental Policies and Shifts to Green Energy

Environmental policies are reshaping the energy sector as the world looks for more sustainable energy solutions. Regulations aimed at reducing carbon emissions can impact the production and distribution of propane. These policies might increase investment in green energy sources, potentially affecting propane demand and prices.

Economic Factors and Market Dynamics

The global economy plays a crucial role in determining propane prices. Economic growth leads to increased energy demand, which can increase propane prices. Conversely, economic downturns can lead to decreased demand and lower prices. Market dynamics such as supply and demand balance influence propane pricing.

Natural Disasters and Severe Weather Conditions

Natural disasters such as hurricanes, tornadoes, or extreme winter storms can disrupt propane supply chains. Damage to infrastructure, such as refineries or transport networks, can lead to short-term shortages and price hikes. Unpredictable weather patterns and severe weather conditions can pose long-term challenges for the propane industry.

Technological Advancements and Production

Technological developments in energy extraction and production can affect propane supply. Advances in drilling techniques or the discovery of new gas fields can increase propane availability, potentially leading to lower prices. Conversely, technological failures or delays can limit supply and increase prices.

The Role of Storage and Reserves

Propane storage and strategic reserves play a vital role in cushioning the impact of global events on supply. Adequate storage ensures a buffer against short-term disruptions, while strategic reserves can provide relief during prolonged supply challenges.

Staying Informed and Adaptive

Understanding global events’ impact on propane prices and supply is essential for those in the propane industry. Staying informed about international developments and adapting to market changes can help businesses navigate these challenges effectively. This awareness can aid in making informed decisions regarding propane use and purchases for consumers.

Rising Promise: Renewable Propane’s Growth in Green Energy

Renewable Propane Gains Momentum in Green Energy In the United States, a significant portion of propane production derives from natural gas processing and crude oil refining, which are not environmentally friendly technologies. However, a promising shift is underway as renewable propane, a byproduct of renewable diesel and sustainable aviation fuels (SAFs) production, takes center stage.… Continue reading Rising Promise: Renewable Propane’s Growth in Green Energy

Renewable Propane Gains Momentum in Green Energy
In the United States, a significant portion of propane production derives from natural gas processing and crude oil refining, which are not environmentally friendly technologies. However, a promising shift is underway as renewable propane, a byproduct of renewable diesel and sustainable aviation fuels (SAFs) production, takes center stage. These renewable sources primarily consist of plant and vegetable oils, animal fats, and used cooking oil.

Renewable propane boasts the same attributes as its conventional counterpart: reliability, portability, and power. Moreover, it offers a notable reduction in carbon emissions per unit of energy compared to many other fossil fuels. While renewable propane production remains relatively modest, industry experts widely agree that its potential for rapid expansion is substantial.

Scaling Up Renewable Propane Production
Jim Bunsey, Director of Commercial Business Development at the Propane Education and Research Council (PERC), shared insights on this burgeoning field: “Looking at what we’ve done for the past five years, we were shipping about 40 million gallons of renewable propane. By the end of this year, we’re going to be close to 100 million gallons, and by the end of 2024, we should be close to 200 million gallons. So, the scalability is coming up—more refineries are coming on.”

Assessing Carbon Intensity
One way to gauge a fuel’s environmental impact is through its carbon intensity (CI) score, which measures the grams of carbon dioxide equivalent per megajoule of energy (gCO2e/MJ) the fuel provides. This metric considers greenhouse gas emissions across the entire fuel lifecycle, from production to transportation to consumption.

Compared to conventional propane’s CI of around 79, renewable propane boasts a significantly lower CI, ranging from seven to 20.5. This variation depends on the feedstock used for production. Notably, conventional and renewable propane exhibit favorable CI values compared to the U.S. power grid’s average CI, which is approximately 130.

Growing Recognition of Renewable Propane’s Advantages
While California has led greenhouse gas reduction initiatives, other regions are following suit. The Pacific Coast Collaborative, involving California, Oregon, Washington, and British Columbia, aims to establish a West Coast market for low-carbon fuels, creating increased demand and investor confidence.

Interest in renewable propane is also gaining traction in the northeastern U.S. Massachusetts celebrated its first delivery of renewable propane, slightly pricier than traditional propane but with prospects of cost reduction as production increases. Leslie Anderson, President and CEO of the New England Propane Gas Association, highlighted the appeal of contributing to climate preservation.

Similarly, Vermont welcomed its initial shipment of renewable propane for heating purposes, demonstrating consumers’ interest in sustainable options. Levi Bourne, President of Bourne’s Energy, shared excitement about meeting customers’ demands with this eco-friendly alternative.

Jim Bunsey summarized the trend this way: “We’re starting to see demand. Most of the time, we see about a 12% to 20% blend with conventional propane. The best part is that we have a versatile range of options, capable of producing any desired blend with conventional and renewable propane on-site.”

As renewable propane gathers momentum, it promises a more sustainable energy future while delivering greater efficiency and reliability.

U.S. Propane Inventories Reach Record High in October 2023

A surge in propane production and exports leads to an abundant supply and falling prices. Propane inventories in the United States hit a record seasonal high at the beginning of October 2023. This surge is attributed to the rapid growth in light petroleum liquids reclaimed from the booming natural gas field production, outpacing the robust… Continue reading U.S. Propane Inventories Reach Record High in October 2023

A surge in propane production and exports leads to an abundant supply and falling prices.

Propane inventories in the United States hit a record seasonal high at the beginning of October 2023. This surge is attributed to the rapid growth in light petroleum liquids reclaimed from the booming natural gas field production, outpacing the robust increase in exports.

As of October 6, inventories reached 102 million barrels, a notable rise from the 85 million barrels recorded a year earlier. These numbers indicate an inventory surplus of 13 million barrels, which is equivalent to a 15% increase or approximately 1.18 standard deviations above the previous seasonal average for the years 2015 to 2022. Furthermore, these inventories are just 1 million barrels short of the all-time high of 103 million, which was established in November 2015.

At the end of the winter season in 2022/23, there was an excess of around 10 million barrels compared to the seasonal average, equating to a 22% increase or approximately 0.98 standard deviations. This surplus has continued to grow despite the robust performance of exports.

Consequently, spot prices at the Mont Belvieu hub in Texas have seen a decrease, averaging just $29 per barrel in October 2023. This falls within the 33rd percentile when considering all months since 1990, adjusted for inflation.

Real prices have also witnessed a decline, dropping from an average of $37 (51st percentile) in October 2022 and a notable $67 (87th percentile) in October 2021.

The propane boom can be attributed to the substantial expansion of dry gas production, growing at an average rate of 5% since 2013. Additionally, propane recovery from gas wells has surged at a compound rate exceeding 9% annually over the past decade.

Investments in field gas processing have been pivotal in extracting premium propane for separate sales. Although U.S. petroleum refineries have consistently produced 59 million barrels of propane from January to July since 2013, domestic consumption has experienced little growth. Approximately 218 million barrels were supplied to domestic users in the first seven months of 2023, showing minimal change compared to recent years.

Instead, the surplus has been directed to international markets. Exports surged to 324 million barrels in the first seven months of 2023, a remarkable increase from the 54 million barrels recorded in the same period in 2013. The United States has thus emerged as a significant propane supplier to East Asia, Latin America, and, to a lesser extent, Europe.

Key destinations for U.S. propane exports in 2022 included Japan (138 million barrels), Mexico (58 million), China (52 million), and South Korea (42 million), collectively representing more than half of the total exports. Further shipments to the Netherlands, Singapore, Indonesia, Brazil, Belgium, Spain, and Chile contributed to over 80% of the total.

The propane surplus has substantially lowered input costs for petrochemical producers in Asia and provided cost-effective heating and cooking fuel for households in emerging markets. Despite near-record inventories, the impact on domestic heating and cooking costs has been moderate, with U.S. households currently paying an average of $101 per barrel for delivered propane, remaining close to the long-term inflation-adjusted average of $108.

Celebrating National Propane Day: Eco-Friendly Facts and History

On October 7, many organizations across the U.S. celebrated National Propane Day. It was a day dedicated to honoring the hardworking propane suppliers nationwide. These business owners provide propane services 24/7, ensuring that communities stay warm and safe. Let’s take a moment to appreciate their efforts and explore the incredible benefits of using propane. In… Continue reading Celebrating National Propane Day: Eco-Friendly Facts and History

On October 7, many organizations across the U.S. celebrated National Propane Day. It was a day dedicated to honoring the hardworking propane suppliers nationwide. These business owners provide propane services 24/7, ensuring that communities stay warm and safe. Let’s take a moment to appreciate their efforts and explore the incredible benefits of using propane.

In the United States, there are more than 3,500 propane suppliers. Many of them are family-owned businesses deeply rooted in their local communities. These suppliers often go to great lengths to ensure their customers’ safety and comfort during natural disasters and power outages.

Propane: An Eco-Friendly Choice

Propane, also known as liquefied petroleum gas (LPG), is a gas that’s typically compressed and stored as a liquid. It’s a versatile fuel used for space and water heating, cooking, and as an engine fuel. Propane powers machinery such as forklifts, farm irrigation engines, fleet vehicles, and buses, offering a clean and efficient alternative.

One remarkable fact about propane is its inclusion in the 1990 Clean Air Act. This recognition highlights propane’s environmental advantages. Compared to traditional gasoline and fuel oil, propane significantly reduces greenhouse gas emissions, including carbon dioxide, carbon monoxide, and nitrogen oxide. It’s an economical choice and a monumental step towards a cleaner and healthier environment.

The Origins of Propane

Propane’s history dates back to 1910 when chemist Walter Snelling stumbled upon it while experimenting with gasoline. He aptly called it “wild gas.” By 1913, Snelling was granted patent number 1,056,845 for LP gas. His research during the 1920s and 1930s paved the way for propane’s use in homes, equipment, and vehicles. To enhance safety, a distinctive rotten egg odor (ethyl mercaptan) was added to propane in the 1930s, making it easier to detect leaks.

Five Fascinating Propane Facts:

1. The U.S. produces over 90% of its propane, reducing reliance on foreign oil.
2. Propane is remarkably energy-efficient, potentially reducing energy costs by up to 90% compared to conventional electricity.
3. Propane is non-toxic to the environment but highly flammable, so handling it safely is crucial.
4. Propane remains a reliable heating choice, even in freezing temperatures as low as 44 degrees Fahrenheit.
5. As a clean-burning fuel, propane helps reduce air emissions, offering an affordable and eco-friendly solution.

Propane Production

Propane is primarily derived from natural gas and crude oil products. During extraction, it’s separated from wellhead gas at processing plants to enhance the flow of natural gas in pipelines. This process also captures other gases like butane and ethane. While some propane byproducts are exported, most are used within the U.S. for heating, cooking, appliances, and standby power.

National Propane Day, established in 2022 through a collaboration between the National Day Calendar and the Propane Education and Research Council (PERC), is a day to celebrate propane suppliers nationwide. It’s an opportunity to raise awareness about this eco-friendly byproduct, known for its environmental safety and affordability.

PERC: Leading the Way

PERC has three primary goals:

1. Safety: Increasing awareness of safe practices in handling and using propane and propane-fueled appliances.
2. Training: Developing and updating industry-leading training and certification programs for propane employees.
3. Research and Development: Promoting the advancement of technologies that enhance the utility, efficiency, environmental performance, and safety of propane in various markets.

As we look back on National Propane Day, we extend our heartfelt appreciation to all propane suppliers and recognize propane’s vital role in providing clean, safe, and reliable energy for our communities nationwide.

Glycerol: A Green Gateway to Hydrogen and Propane Fuel

Aston University’s recent research has illuminated a promising path toward producing renewable hydrogen and propane fuel gases using an unexpected source – glycerol. Glycerol, commonly known for its presence in health and beauty products, is an organic compound primarily derived from fats and oils. Leveraging the abundance and cost-effectiveness of crude glycerol, mainly obtained from… Continue reading Glycerol: A Green Gateway to Hydrogen and Propane Fuel

Aston University’s recent research has illuminated a promising path toward producing renewable hydrogen and propane fuel gases using an unexpected source – glycerol.

Glycerol, commonly known for its presence in health and beauty products, is an organic compound primarily derived from fats and oils. Leveraging the abundance and cost-effectiveness of crude glycerol, mainly obtained from biodiesel production facilities, researchers have embarked on pioneering efforts to harness its potential for generating hydrogen gas and propane. This groundbreaking work holds significant environmental benefits and has the potential to reduce dependence on fuel imports.

The HYDROGAS project, funded by the prestigious Marie Skłodowska-Curie Actions program, the European Union’s leading initiative for doctoral education and postdoctoral training, has dived deep into the utilization of glycerol as a foundational resource for the production of hydrogen gas and propane.

Hydrogen is widely acknowledged as the most promising clean fuel for the future due to its carbon-free emissions. Biopropane, on the other hand, has the potential to substitute fossil-derived liquefied petroleum gases, offering an environmentally friendly alternative. These fuels also provide a practical solution for heating distant off-grid structures.

Previously, researchers demonstrated that glycerol could be converted into propane by reacting with hydrogen. However, this method incurred high costs due to the need for external hydrogen. The innovative approach of the HYDROGAS project was to employ a portion of the glycerol itself to generate the necessary hydrogen for transforming glycerol into propane.

Dr. Jude Onwudili, heading the research at Aston University’s Energy and Bioproducts Research Institute, explained their groundbreaking approach, saying, “Our approach was to use part of the glycerol itself to produce the hydrogen gas required for propane production, avoiding the need for it to be added from expensive external sources.”

The HYDROGAS project has successfully achieved its initial goal of establishing a method to produce an ample supply of hydrogen from glycerol for conversion into propane. However, the project’s second objective, which aims to attain substantial propane yields, is currently under investigation and exploration.

Dr. Jude Onwudili elaborated, “We are also still working to obtain high propane yields from ‘crude glycerol.’ Through HYDROGAS, we discovered that the second-stage reactions can work in different conditions to those that make the hydrogen, so that we will explore this alternative route.”

Dr. Carine Tondo Alves, a Marie Skłodowska-Curie fellow, has strongly supported this research endeavor. With additional funding from Aston University, the project is now geared towards creating a specialized research program focused on reforming and converting glycerol and other feedstocks derived from biomass into environmentally sustainable gaseous and liquid fuels. This innovative approach not only holds the promise of greener energy but also the potential to substantially impact reducing carbon emissions and reliance on traditional fuel sources.

Understanding the Factors Impacting Propane Demand Trends

Propane, a versatile fuel with various applications, is influenced by a complex web of factors that impact its demand and pricing. Understanding these dynamics is essential for both industry insiders and consumers. Let’s take a look at the latest trends affecting propane demand and what they mean for the market. Propane Dehydrogenation (PDH) Plants and… Continue reading Understanding the Factors Impacting Propane Demand Trends

Propane, a versatile fuel with various applications, is influenced by a complex web of factors that impact its demand and pricing. Understanding these dynamics is essential for both industry insiders and consumers. Let’s take a look at the latest trends affecting propane demand and what they mean for the market.

Propane Dehydrogenation (PDH) Plants and the Propylene Connection

China’s PDH plants, responsible for converting propane into propylene, have been operating at less than optimal capacity. This is largely due to weak economic conditions, which have led to reduced demand for plastics – a primary product of propylene. Consequently, while propane prices have surged this summer, propylene prices have not followed suit, resulting in a squeeze in propylene margins. The consequence? Lower utilization rates at PDH plants, a significant consumer of propane.

The situation raises concerns, especially considering that several new PDH plants are scheduled to come online in the coming months. The success of their launch could be at risk if economic conditions don’t improve.

The Shifting Landscape of Propane Exports

Propane exports started the year on a strong note but have seen a recent slowdown. While 2023 has seen an average of 247,000 barrels per day (bpd) more in exports compared to the previous year, this difference has shrunk to 128,000 bpd since July. At this rate, the year may soon align with the previous one.

The dip in export demand has been partially compensated by a rise in domestic demand within the United States. After a slow start to the year, domestic propane demand has picked up, averaging 110,000 bpd more than the same period last year since July. This has resulted in overall propane demand surpassing the figures from the previous three years.

Strong Production, High Inventories

Strong propane production in the United States has reached all-time highs recently. Consequently, propane inventories have reached five-year highs for this time of the year. This abundance of supply ensures a comfortable propane situation for the upcoming winter, catering to both domestic and export demands.

The Weather Factor and Economic Conditions

Despite the current positive indicators, a few potential hurdles loom on the horizon. The weather, always a wild card, can significantly affect domestic propane demand. Dry conditions across key agricultural areas, if not addressed, could impact crop drying requirements and potentially reduce winter demand. Additionally, the possibility of an El Nino weather pattern could affect winter demand in northern states.

Balancing Act and Uncertainties

Looking ahead, it’s evident that the propane and crude markets have rebounded from early-year lows. While crude fundamentals support its price, the propane market faces a more challenging scenario. Weather conditions and economic uncertainties could curtail domestic propane demand, even as export demand struggles to regain momentum.

Propane’s affordability makes it an attractive option for buyers, especially with the support of rising crude prices. However, buyers should tread cautiously, considering the potential risks associated with the upcoming winter. Weak crop drying, El Nino conditions, and economic challenges all pose uncertainties.

While propane prices have rebounded significantly, there’s a complex mix of factors at play in the propane market. Propane consumers and industry stakeholders must carefully navigate this changing landscape, keeping a keen eye on evolving conditions to make informed decisions and mitigate risks.

A Milestone in Sustainability: Turning CO2 into Propane

In the realm of sustainable energy, a groundbreaking achievement is emerging, poised to redefine the propane industry’s role in the global energy landscape. At the forefront of this revolutionary development are the visionary researchers at the Illinois Institute of Technology (ITT), whose recent breakthrough holds the promise of transforming carbon dioxide (CO2) into propane –… Continue reading A Milestone in Sustainability: Turning CO2 into Propane

In the realm of sustainable energy, a groundbreaking achievement is emerging, poised to redefine the propane industry’s role in the global energy landscape. At the forefront of this revolutionary development are the visionary researchers at the Illinois Institute of Technology (ITT), whose recent breakthrough holds the promise of transforming carbon dioxide (CO2) into propane – a scientific milestone that has long eluded the grasp of the scientific community. This milestone signifies a remarkable stride towards the complex intersection of energy production and environmental sustainability.

In an era characterized by an urgent need to combat climate change and transition towards sustainable energy sources, the conversion of CO2 into larger, valuable molecules, such as propane, assumes paramount importance. This endeavor aligns seamlessly with the global mission to curtail CO2 emissions and expedite the shift towards sustainable energy solutions. For decades, scientists have undertaken the arduous quest to decipher the enigmatic secrets of CO2 conversion, and the ITT’s recent breakthrough represents a monumental leap towards realizing this ambitious vision.

Contrary to conventional wisdom, ITT’s approach departs from the traditional utilization of metal oxide-based catalysts for CO2 conversion. Such traditional methods often encountered insurmountable challenges, including catalyst deactivation and a lack of selectivity in product formation, particularly the ability to yield a single molecule like propane. In contrast, ITT’s innovative strategy leverages economically viable materials, complemented by a transition to continuous processing, thereby enhancing efficiency and paving the way for scalability – an indispensable facet of any solution seeking to reshape entire industries.

At the core of this revolutionary process lie meticulously crafted particles composed of a combination of three elements: molybdenum (Mo), phosphorus (P), and carbon (C). These elements form the fundamental structure upon which the conversion of CO2 into propane is based. Nevertheless, the intricacy of this procedure goes beyond these elements. The inclusion of ionic liquids based on imidazolium introduces an additional layer of complexity that enhances the specificity of the catalytic process. This deliberate integration steers the chemical reaction towards the desired result of propane production, ensuring both effectiveness and accuracy.

The implications of ITT’s breakthrough resonate far beyond the confines of their laboratory. The conversion of CO2, a notorious greenhouse gas, into a valuable energy source like propane carries the dual potential of reducing emissions while enhancing energy accessibility. With sustainability at its core, this achievement foretells a future where energy production and environmental preservation harmoniously coexist. Essentially, a circular renewable hydrocarbon process has been unveiled, assuring the longevity of propane as a viable energy source.

As we navigate the path towards a sustainable energy future, collaboration and expansion will be instrumental. Industry partnerships, government initiatives, and global cooperation will amplify the impact of this remarkable discovery. The collective endeavor to refine the technology, explore novel applications, and seamlessly integrate it into existing energy infrastructure transcends disciplinary and geographical boundaries.

In essence, the discovery of CO2-to-propane conversion stands as a testament to human innovation and determination. In an era where the world fervently seeks cleaner energy solutions, ITT’s pioneering electrolyzer device shines as a beacon of hope—a tangible illustration of how science and technology can align with environmental aspirations. The journey towards a sustainable energy future may be complex and multifaceted, but milestones like this underscore the pivotal role of the propane industry in forging a brighter world for future generations.

Enterprise Products Partners Expands NGL Fractionation and Propane Dehydrogenation Capacity

Enterprise Products Partners has commenced operations at its latest natural gas liquids (NGL) fractionator and second propane dehydrogenation plant (PDH 2) in Chambers County, Texas. Meeting Growing Demand The newly launched fractionator contributes 150,000 barrels per day (bpd) of nameplate capacity. Backed by long-term customer agreements, this facility enhances Enterprise’s NGL fractionation capacity to 1.2… Continue reading Enterprise Products Partners Expands NGL Fractionation and Propane Dehydrogenation Capacity

Enterprise Products Partners has commenced operations at its latest natural gas liquids (NGL) fractionator and second propane dehydrogenation plant (PDH 2) in Chambers County, Texas.

Meeting Growing Demand

The newly launched fractionator contributes 150,000 barrels per day (bpd) of nameplate capacity. Backed by long-term customer agreements, this facility enhances Enterprise’s NGL fractionation capacity to 1.2 million bpd at the Chambers County complex. Enterprise’s total NGL fractionation capacity now stands at about 1.7 million bpd. This new fractionator is one of the significant projects worth $3.8 billion that have entered service in 2023.

A.J. “Jim” Teague, Co-CEO of Enterprise’s general partner, highlights the impetus behind this expansion: “The addition of our newest fractionator is being driven by growing domestic NGL production in the Permian Basin as new natural gas processing plants are brought online. We recently began service at our sixth gas processing plant in the Midland Basin, with three other Permian Basin gas plants expected to come online by the end of the first quarter of 2024. On the demand side, the additional volumes will provide much-needed feedstocks for the petrochemical and refining industries and products such as cleaner-burning, reliable propane for export to developing nations globally.”

Enhancing Propylene Production

Operated by long-term, fee-based contracts, PDH 2 can consume 35,000 bpd of propane, generating 1.65 billion pounds of polymer-grade propylene (PGP) annually. Combined with Enterprise’s existing PDH 1 plant, the company’s capability increases to consume 70,000 bpd of propane and produce 3.3 billion pounds of PGP yearly at the Chambers County facility. Enterprise’s total propylene production capacity now reaches 11 billion pounds per annum.

Teague emphasizes the significance of propylene as a foundational component for producing durable goods: “Propylene is the basic building block used to produce virtually all durable products and, as one of the main pillars of modern civilization, is essential to human survival and improved quality of life. PDH 2 will provide abundant and cost-advantaged shale-based, on-purpose production to supply our petrochemical customers with the feedstock to produce products that meet the needs of a growing global population. Our newest PDH plant is among $3.8 billion of major growth projects that we announced would begin service and generate new sources of cash flow by the end of 2023.”

Enterprise Products Partners continues contributing to the energy infrastructure landscape, meeting evolving industry demands and positioning itself as a pivotal player in propylene production and NGL fractionation.

Exploring the Journey of Propane: Origins and Supply Chain Dynamics

Recent changes in the market have highlighted the complex dynamics of propane production and its widespread impact. An important event took place on August 4 involving the U.S. Energy Information Administration (EIA) gathering data for its Weekly Petroleum Status Report. This information was made public on August 7, revealing a pivotal moment in the propane… Continue reading Exploring the Journey of Propane: Origins and Supply Chain Dynamics

Recent changes in the market have highlighted the complex dynamics of propane production and its widespread impact. An important event took place on August 4 involving the U.S. Energy Information Administration (EIA) gathering data for its Weekly Petroleum Status Report. This information was made public on August 7, revealing a pivotal moment in the propane sector.

The focal point? Propane production. The week ending August 4 witnessed a record-breaking surge in U.S. propane production, reaching a remarkable 2.687 million barrels per day (bpd). This substantial increase of 187,000 bpd from the prior week has caught the industry’s attention, offering the potential for significant shifts in propane dynamics.

The surge in production is believed to be linked to expanded fractionation capacity around Mont Belvieu, a crucial hub. The propane journey begins with hydrocarbon wells, often nestled in remote locations. These wells yield an array of hydrocarbons, categorized as crude or natural gas depending on their composition. Near the wells, separators come into play, segregating water, heavy hydrocarbons, and lighter hydrocarbons. Each stream continues its journey along the supply chain.

The journey of propane continues as heavier hydrocarbon wells are processed, resulting in propane as a byproduct. Near-demand refineries commonly sell their propane in local markets, although supply sources have dwindled due to centralization. On the other hand, light hydrocarbons journey through processing plants that separate methane, used for natural gas distribution.

However, the bulk of propane supply emerges from major hubs, like Mont Belvieu. Here, natural gas liquids are fractionated and stored. Recent capacity expansions led to a surge in propane production, reflecting the dynamic interplay between production levels, fractionation capacity, and overall hydrocarbon output.

This surge in supply introduces new variables, including propane dehydrogenation plants converting propane into propylene for petrochemical use. As the market navigates these changes, it’s important to watch how demand responds. With supply surges often preceding shifts in demand, the market anticipates potential above-average inventory builds until winter demand gains traction.

The propane journey is a complex symphony, orchestrated by hydrocarbon wells, refining processes, fractionation capacities, and evolving demand dynamics. As the industry adapts to newfound capacity and demands, the ebb and flow of propane’s journey continue to shape market outcomes.

Revolutionary Discovery: Turning Air Pollution into Clean Fuel

Chicago, IL — A recent report in the journal, Nature Energy, highlights exciting news in the world of eco-friendly energy. Scientists at the Illinois Institute of Technology have created a special machine that transforms harmful carbon dioxide into useful propane, all while being practical and affordable. The United States has big goals to reduce the… Continue reading Revolutionary Discovery: Turning Air Pollution into Clean Fuel

Chicago, IL — A recent report in the journal, Nature Energy, highlights exciting news in the world of eco-friendly energy. Scientists at the Illinois Institute of Technology have created a special machine that transforms harmful carbon dioxide into useful propane, all while being practical and affordable.

The United States has big goals to reduce the pollution that comes from burning fuels by 2050. To reach these goals, we need smart ways to reduce the carbon dioxide we produce. That’s where Dr. Mohammad Asadi and his team come in. Dr. Asadi, who studies chemicals and engineering at Illinois Tech, led this incredible project.

Dr. Asadi explains, “We want to make chemicals that are good for the environment. This way, we don’t have to throw away the chemicals we already use.”

What’s fascinating about Dr. Asadi’s machine is its magic ingredient. This machine uses simple things to change carbon dioxide into molecules that make fuels such as propane. Propane is useful for many things, from heating homes to flying airplanes.

To understand how the machine works, the team used both experiments and computers. They wanted to know how the machine changes carbon dioxide into propane and how to make it work even better.

The machine has another special trick. It works non-stop to make propane. This is different from older ways that stop and start. This new design makes it easier to make great amounts of propane continuously.

Jack Lewnard, who leads a program about new energy technologies, says, “This new machine is a big step forward. It helps us capture carbon and make useful things out of it. This is good for our planet.”

Dr. Asadi has also used a similar machine to make ethanol, which is a type of alcohol, from pollution in the air. Now, with this new discovery, he’s working with a big company that provides propane. They want to use his machine to make clean propane that people can use.