Posted on 10/09/2014 5:37:47 AM PDT by thackney
Propane demand (measured as product supplied) is expected to be 100,000 barrels per day (bbl/d) lower on average in 2014 compared to 2013 because of reduced demand from petrochemical plants, according to EIA's Short-Term Energy Outlook. In contrast to propane used as a heating fuel in buildings during colder months and as a crop-drying fuel during the harvest season, both of which are highly seasonal and weather dependent, petrochemical consumption of propane has relatively little seasonality.
Beginning in mid-2013, higher propane prices reduced demand from petrochemical users. This decline is evident after accounting for the seasonal variation in annual consumption: even though temperatures (as measured by heating degree days) were 9% colder in first-quarter 2014 compared to the previous year, propane consumption was 7% lower.
The primary chemical industry use for propane is as a feedstock for the production of ethylene and propylene, the basic building blocks of plastics. Ethylene producers are sensitive to feedstock prices. During 2013, when propane prices increased relative to ethane prices, ethylene crackers began substituting ethane for propane. This trend continued into 2014, as the price spread between propane and ethane widened.
EIA does not expect ethylene plants to switch back to propane feedstock in the coming year, as growing ethane supply is expected to continue to lower ethane prices compared with propane. However, several new propane dehydrogenation plants, which use propane to produce propylene for chemical and plastic manufacturing, are expected to come online in 2015-16, which should contribute to some growth in propane use in the chemical industry.
I’m numb with fascination.
So as long as we keep fracking wet gas then ethane will be at a lower cost for plastic producers?
To bad I can’t use ethane in my BBQ tank. Tired of spending $4 a gallon to fill it up with propane.
Yes, wet gas contains more ethane typically than dry gas. Producer seek wet gas as it typically pays better than dry gas.
The US petrochem industry is expanding to make use of the expanded supply and associated pricing.
Just refilled both my grill 5lb propane bottles, which were empty. Usually burn through a bottle per Summer, so it had been close to 2 years since my last refill. Noticed the following:
Costco: $11.50 per bottle.
Local HW store: $20 per bottle
Blue Rino (swapout, not refill) at a local gas station: $23 per bottle.
Maybe my math is wrong but I believe that a gallon of propane contains 91,500 btu so I don’t see how a million BTU could only cost about 12 cents. Perhaps I am reading the chart incorrectly.
See my post above. There’s a significant variance in the cost per gallon depending on where/how you fill up. Most places, it seems, just charge a $20 flat fee, rather than per-gallon.
The really big ripoffs are the little green 1lb bottles used for camping stoves and the like. They were recently on sale at Walmart, $5.75 for a two-pack, but there are stores where they’re easily double that (Cabelas had 6-pack for $30). But even thats too high; I picked up a refill adapter from Harbor Freight ($20) and am going to start refilling them. I figure that I can get the cost down to less than $0.75 per bottle ...
Costco refills propane? Wow that is new to me. I’ll be checking out my store ASAP, thanks.
I think that should be dollars, not cents.
Either that or 1000 BTU instead of million BTU. I am pretty sensitive to the price of propane since that is what heats my home. Last winter was a real shock. I was able to lock in a price for this winter.
About 11 gallons of propane to make a million BTU and spot propane is a little over a dollar. It must be dollars per MMBTU.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EER_EPLLPA_PF4_Y44MB_DPG&f=D
Mine does. But it also has a gas station, so whether they refill or not may depend on location.
Good luck!
They fixed it. $ per MMBTU.
So it looks like propane costs about 3-4 times what dry natural gas does per BTU.
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