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Q: What is propane?
Q: Where does propane come from?
Q: What influences propane prices?
Q: Is propane gas a safe fuel?
Q: Why do prices vary from one dealer to another?
Q: What happens if I run out of propane?

 


Q: What is propane?

Propane is a naturally occurring product composed of hydrogen and carbon molecules (known as hydrocarbons). Methane (natural gas) and pentane (gasoline) are other members of the hydrocarbon family.

Propane occurs naturally as a gas at atmospheric pressure, but can be liquefied if subjected to moderate pressure. We store and transport propane in its compressed liquid form. By opening a valve to release propane from a pressurized storage container, we are able to vaporize it into a gas for use. So propane is a liquid until readied for use. While propane is nontoxic, it is also odorless. We add an identifying odor to it so the gas can be readily detected.

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Q: Where does propane come from?

Propane is not produced on its own, but as a by-product of two other processes: natural gas processing and petroleum refining.

Natural gas plants extract materials such as propane and butane from the original natural gas source. Similarly, when oil refineries make major products such as motor gasoline and heating oil, they produce some propane as a by-product of those processes.

It is important to understand that because propane production is a by-product by nature, the available volume from natural gas processing and oil refining cannot be adjusted when prices and/or demand for propane fluctuate.

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Q: What influences propane prices?

  1. Crude oil and natural gas prices
    Propane is a by-product of both natural gas and petroleum and its price is based on the going rate for both.
  2. Supply/demand balance
    Colder-than-normal weather can put extra pressure on propane prices during the high-demand winter season because there are no readily available sources of increased supply except for imports. And imports may take several weeks to arrive, during which time larger-than-normal withdrawals from inventories may occur, sending prices upward. Cold weather early in the heating season can cause higher prices sooner rather than later, since early inventory withdrawals affect supply availability for the rest of the winter.
  3. Proximity of supply
    There are three supply points in the propane distribution chain:

    1. Consumer tank – A larger consumer tank will allow the consumer’s fuel to last through supply shortages.
    2. Supplier storage – A larger supplier storage will allow for more deliveries to consumers before resupply is required.
    3. Wholesaler storage – Suppliers who receive resupply from hundreds of miles away are subject to transportation and logistical restrictions and problems.
  4. Markets served
    Propane demand comes from several different markets, which exhibit distinct patterns in response to the seasons and other influences. Residential demand, for instance, depends on the weather, so prices tend to rise in the winter. The petrochemical sector is more flexible in its need for propane and tends to buy it during the spring and summer, when prices decline. If producers of petrochemicals should have to depart from this pattern for some reason, the coinciding demand could raise prices. And when prices rise unexpectedly, as they do sometimes in the winter, petrochemical producers pull back, helping to ease prices. Prices could also be driven up if agricultural sector demand for propane to dry crops remains high late into the fall, when residential demand begins to rise.

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Q: Is propane gas a safe fuel?

Yes, when used properly. Although propane gas is naturally colorless and odorless, an odorant is added to alert users in the event of a leak. To be familiar with the odor of propane gas, ask us for a sniff test. Storage, use and handling of propane fall under the standards adopted by the National Fire Protection Association, Title 49 USC and approved by the American National Standards Institute (ANSI).

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Q: Why do prices vary from one dealer to another?

Propane dealers operate in a competitive marketplace and prices may vary among companies. Transportation costs contribute to geographic variations in price. Companies that provide complete 24-hours-a-day, seven-days-a-week service are usually more expensive than companies that offer limited service hours. Also, a few companies sell only propane and offer no other services. Choose a level of comfort to suit your needs.

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Q: What happens if I run out of propane?

  1. Close all propane tank or cylinder supply valves.
  2. Call or contact us.

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