LP Gas, May 2017

PROPANE EXPO Propane Expo rewind Takeaways from educational sessions and news that emerged during the 2017 Propane Expo in Nashville Tennessee Keeping an eye on propane supply The way last winter ended helps to form the foundation for Mike Sloans propane market outlook which he presented April 21 at the Southeastern Convention International Propane Expo in Nashville Tennessee Sloan a principal at energy consultancy ICF wants propane retailers to know that a rapid drawdown in U S propane inventory occurred in a mostly mild winter From the beginning of January to the end of March U S inventory declined about 40 million barrels from 797 million to 416 million according to the U S Energy Information Administration EIA Inventory continued to face small declines through the middle of April dipping to less than 40 million barrels The decline comes after U S inventory built to more than 100 million barrels to begin the 2016 17 winter heating season The rapid drawdown is the result of increasing U S propane exports which have exceeded 1 million barrels per day for much of 2017 EIA data shows The industry also saw a rapid expansion of U S propane export capacity over the last few years supporting higher export volumes Sloan says export capacity has been growing faster than supply creating uncertainty in the domestic market The fate of the U S supply situation today is dependent on what happens in world markets We are much better integrated with world markets now than we have been which means well be more affected by what happens in international markets than we have in the past Sloan says The growth in U S propane exports would not be possible without the growth in U S supply coming primarily from the shale gas revolution which continues to drive the industry Sloan says He expects the propane supply growth trend to continue despite last years production slowdown due to lower oil and gas prices affecting rig counts Its an unabashedly good thing for the industry but it ICFs Mike Sloan left and Eric Kuhle provided a propane market outlook during a Propane Expo educational session comes with changes Sloan says of propane supply growth As marketers you have to deal with ensuring supply and availability and handling risk The change in supply and exports have and will continue to have important impacts in that area that you need to think about for your businesses Real opportunities in the propane market Lower propane prices a stronger economy growth in the housing sector and new applications and engines available to the market make the propane industry a good place for retailers to grow their businesses There are real opportunities to grow the market and generate profitable businesses Sloan explained during the propane market outlook session Doing that is not always simple and traditional New approaches need to be considered and new markets thought about In all of those focusing on consumer education and marketing is critically important to the overall health of the propane industry The internal combustion engine market including onand off road applications continues to be the largest growth opportunity for propane Sloan says He cites school buses and other fleet vehicles running on propane autogas as well as propane lawn mowers as applications that will help fuel the growth Meanwhile Sloan expects residential demand to remain flat or even decline slightly due to improvements in equipment efficiencies While the industry focuses on growth opportunities it Continued on page 48 www LPGasmagazine com May 2017 LPGas 47 PHOTO BY BRIAN RICHESSON