What is Propane?
Propane — sometimes known as liquefied petroleum gas, or LPG — is a gas normally compressed and stored as a liquid. It is nontoxic, colorless, and virtually odorless; an identifying odor is added so it can be detected. Propane is most commonly used for space and water heating, for cooking, and as fuel for engine applications such as forklifts; however, its applications are rapidly growing due to new technology developments. When used as vehicle fuel, propane is known as propane autogas. Propane is most commonly used for space and water heating, for cooking, and as fuel for engine applications such as forklifts, mowers, generators, and irrigation engines. However, its applications are rapidly growing due to new technology developments.
Where Does Propane Come From?
Propane is primarily a byproduct of domestic natural gas processing, though some propane is produced from crude oil refinement. U.S. propane supplies are becoming increasingly abundant due in large part to increased supplies of natural gas.
- As shale gas extraction has increased, the production of propane from crude oil refinement has dropped dramatically. In 2011, 69 percent of the total U.S. supply of propane came from natural gas liquids produced in the U.S. and Canada.
- Strong growth in propane supply is expected to come from the Marcellus shale play in the northeastern U.S. Industry observers estimate the Marcellus shale alone can supply more than 2 billion gallons of propane per year.
- Because of the drastic increase in U.S. sources of propane, the U.S. produces more than enough propane to meet current demand and became a net exporter of propane in 2011.
Who Uses Propane?
Additionally, many industries increasingly choose propane to cost effectively fuel vehicles and equipment while lowering emissions.
How is Propane Distributed?
With over 301,000 miles of transmission pipelines as of 2014, propane is widely available and easily portable. As of 2012, there are more 8,500 propane retail stations nationwide.
How Does the Propane Industry Contribute to the Economy?
The propane industry generated nearly $40 billion in U.S. GDP in 2012.
1. Department of Energy, Energy Information Administration, "Propane Explained: Use of Propane," July 2009.
2. ICF International, Impact of the U.S. Consumer Propane Industry on U.S. and State Economies in 2012, (Washington, D.C.: ICF International, 2014), prepared for the Propane Education & Research Council.
3. John D. Podesta and Timothy E. Worth, "Natural Gas: A Bridge Fuel for the 21st Century" (Center for American Progress and Energy Future Coalition, August 10, 2009), http://www.americanprogress.org/issues/2009/08/pdf/naturalgasmemo.pdf (accessed March 11, 2015).
4. ICF International, 2016 Propane Market Outlook, (Washington, D.C.: ICF International, 2016), prepared for the Propane Education & Research Council, http://www.afdc.energy.gov/uploads/publication/2016_propane_market_outlook.pdf.
5. ICF International, Propane Supply Sources and Trends, (Washington, D.C.: ICF International, August 2012), prepared for the National Propane Gas Association.
6. ICF International, 2012 Propane Market Outlook, (Washington, D.C.: ICF International, 2010), prepared for the Propane Education & Research Council.
7. Department of Energy, Energy Information Administration (EIA), Table HC1.1 Fuels Used and End Uses in U.S. Homes, by Housing Unit Type, 2009, http://www.eia.gov/consumption/residential/data/2009 (accessed July 14, 2014).
8. Air Pollution Control Act, Public Law 84-159, U.S. Statues at Large 69 (1955): 322, as amended, codified at U.S. Code 42, 7401-7626 (commonly known as the Clean Air Act), http://epw.senate.gov/envlaws/cleanair.pdf.
9. Bureau of Transportation Statistics, Table 1-10: U.S. Oil and Gas Pipeline Mileage, http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_10.html, (Accessed May 23, 2016).
10. Department of Energy, Office of Energy Efficiency and Renewable Energy, Alternative Fuels Data Center, Alternative Fueling Station Counts by State, http://www.afdc.energy.gov/fuels/stations_counts.html, (Accessed May 18, 2016).
11. ICF International, Impact of Consumer Propane Industry on U.S. and State Economies In 2012: Final Report, (November 2014), prepared for the Propane Education & Research Council, https://www.npga.org/files/public/ICF_Propane_Industry_Impact_Study.pdf.