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Wednesday, September 2, 2015

Wednesday, September 2, 2015

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RBN Energy: update on propane supply growth -- near largest centers of demand. (Archived.)

Over the past two years, propane production has grown like crazy, and in several past blogs we’ve discussed the impact of those increased supplies on exports.  That has been a very big deal for propane markets. But an equally significant development is the location of that production growth.  Because much of the new propane supply is right next door to the two largest propane markets in the U.S. – the Northeast and the Midwest.  Considering what happened to the propane market during the Polar Vortex winter of 2013-14 (shortages and price spikes), the importance of production growth near to demand cannot be overstated.  It is very good news, both for the market in general and propane consumers in particular.  Today we start a new series examining what has happened to propane supply and what it means to propane markets.

This blog and others to come in the series are based on an analysis recently completed by RBN for the Propane Education and Research Council (PERC).  PERC is a unique organization, authorized by Congress in 1996 with the passage of the Propane Education and Research Act.  PERC’s mission is to promote the safe and efficient use of propane, particularly the “odorized” variety used in residential, commercial, agricultural and transportation markets. A few months back PERC engaged RBN to assess market developments that could impact the prospects of disruptions similar to the one that occurred in the winter of 2013-14, and to suggest actions that could alleviate the risk of such market turmoil. That project was completed in August and with the permission of PERC, this blog series summarizes some of RBN’s analysis and conclusions.


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