LP Gas, May 2010

P R O P A N E I N D U S T R Y N U M B E R S Data Points Baseline Forecast of Propane Demand 2015 2015 MILLION GALLONS Momentum is lost after a big 2009 for grain drying ICF International 2013 2014 2015 Manufactured Housing Seasonal Housing ICF International 20 48 11 6 9 6 Residential Propane Demand Forecast by End Use 6000 5000 4000 3000 2000 1000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Million Gallons Primary Space Heating Supplementary Space Heating Water Heating Cooking Other Applications Historical Quarterly Housing Starts and Forecast 2008 2011 MILLIONS Change Demand since in 2015 2009 Residential 4580 66 Commercial 1901 21 Agriculture 1009 222 Internal Combustion 876 117 Resellers 624 228 Industrial 604 109 Total 9594 31 PROPANE EDUCATION RESEARCH COUNCIL 1998 2015 MILLION GALLONS Propane demand expected to fall T 3 percent by 2015 otal odorized propane sales over the next fi ve years are expected to decline about 3 percent according to ICF Internationals Propane Market Outlook The decline ICF reports is driven by two key factors generally outside the control of the propane industry the weather and energy effi ciency trends In the near term residential propane demand is expected to remain stable or fall slowly in 2010 as any growth resulting from the start of the economic recovery is offset by continued decreases in consumption due to effi ciency gains and a return to recent weather patterns Once the housing market resumes growth marketers should expect an increase in propane sales resulting from modest increases in the number of propane customers to be largely offset by improvements in effi ciency resulting in stable or slowly declining propane sales through 2014 In the longer term continued growth will depend largely on propane price trends and competition with electricity Housing market experts expect starts to increase signifi cantly in 2010 and 2011 albeit from a very low base In the longer term growth in housing requirements should result in a long term equilibrium of around 15 million housing starts per year according to ICF International LPG 2011 Q1 2011 Q2 ICF International 12 11 10 09 08 07 06 05 04 Annualized Housing Starts Millions 2008 Q3 Fannie Mae Freddie Mac Federal Reserve 2008 Q4 2009 Q1 2009 Q2 2009 Q3 Mortgage Bankers Assoc National Assoc of Realtors 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 www LPGasmagazine com May 2010 LPGas 17