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What is Propane? |
Most people know propane as the fuel in the white container attached to a barbecue grill. But propane has long proven its versatility for heating homes and water, cooking, drying clothes, fueling gas fireplaces and as an alternative fuel for vehicles. However, more propane is used to make petrochemicals- which are the building blocks for plastics, alcohols, fibers and cosmetics, to name a few. Propane naturally occurs as a gas at atmospheric pressure but can be liquefied if subjected to moderately increased pressure. It is then stored and transported in its compressed liquid form. By opening a valve to release propane from a pressurized storage container, it is vaporized into a gas for use. Simply stated, propane is always a liquid until it is used. Although propane is non-toxic and odorless, an identifying odor is added so the gas can be readily detected. |
Why should you buy propane from us? |
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Where does propane come from? |
One of propane's unique features is that it is not produced for its own sake, but is a by-product of two other processes: natural gas processing and petroleum refining. Natural gas plant production of propane primarily involves extracting materials, such as propane and butane, from natural gas to prevent these liquids from condensing and causing operational problems in natural gas pipelines. Similarly, when oil refineries make major products such as motor gasoline and heating oil, some propane is produced as a by-product of those processes. It is important to understand that the by-product nature of propane production means that the volume made available from natural gas processing and oil refining cannot be adjusted when prices and/or demand for propane fluctuate. In addition to these two processes, propane demand is met by imports and by using stored inventories. Although imports provide the smallest (about 10%) component of U.S. propane supply, they are vital when consumption exceeds available domestic supplies. Propane is imported by land (via pipeline and rail car from Canada) and by sea (in tankers from such countries as Algeria, Saudi Arabia, Nigeria, Venezuela, and Norway). |
What influences propane pricing? |
Propane prices are subject to a number of influences. Some are common to all petroleum products and others are unique to propane. Since propane is portable, it serves many different markets ranging from fueling barbecue grills to producing petrochemicals. The price of propane in each of these markets is influenced by many factors. These factors include the prices of competing fuels in each market, the distance propane has to travel to reach a customer and the volume needed by a customer. More specifically, propane prices are affected by:
If producers of petro-chemicals would 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 which helps to ease prices. Prices can also be driven up if the agricultural sector demand for propane to dry crops remains high late into the fall- the same time that residential demand begins to rise. Different markets also use different volumes of propane which impact the price. For example, the petrochemical sector, which is primarily located near major propane supply sources, uses large volumes of propane that are delivered by pipeline. This allows for a lower unit cost (cents per gallon) compared to other propane consumers. However, residential consumers use relatively small volumes that are delivered long distances by interstate pipeline and by truck which causes the unit price for propane to be much higher. |
Why do propane prices spike? |
Propane prices occasionally spike disproportionately from what is expected from normal supply/demand fluctuations. The main cause appears to lie in the logistical difficulty of obtaining resupply during the peak heating season. Because propane is produced at a relatively steady rate year-round by refineries and gas processing plants, there is no ready source of incremental production when supplies run low. Propane wholesalers and retailers are forced to pay higher prices as propane markets are bid higher due to dwindling supply. Consequently, higher propane prices are simply passed on to consumers. Imports do not offer much cushion for unexpected demand increases or supply shortages due to long travel time. On the other hand, when propane prices spike, the petrochemical sector may cut back on its use thus freeing up supplies for other uses. |
What is the difference in the quality of propane between refineries outside of the Gulf Coast and Texas? |
Texas refineries sit on vast salt dome formations allowing for off spec products to be stored and re-processed. Refineries outside of the Gulf Coast don't have that advantage. Off spec propane (Ethane) is in great demand on the gulf coast because that's the home of America's largest plastic factories. |
When you buy a tank, it's the valves that matter. We have been talking about the importance of owning your tank to gain energy independence and we sell tanks to help you achieve that goal. We also want your experience with energy independence to be positive and that means trouble-free. The tanks can last upwards of 50 years - they have no moving parts. Valves on the other hand have many moving parts, most of which are small and under a great deal of pressure. This means that valves can and do wear out. Ask about our low prices, and how you can get a free tank with a pre-buy. Call us today at 800-879-3152. Or visit us on the web at www.thriftypropane.com.
THRIFTY PROPANE'S DELIVERY TRUCK METERS ARE STATE INSPECTED AND SEALED. EACH STATE CERTIFIES THAT THEY ARE ACCURATE. CUSTOMER TANK GAUGES PROVIDE ONLY APPROXIMATE INDICATION OF QUANTITY IN THE TANK AND MAY BE OFF SUBSTANTIALLY FROM TIME TO TIME. - RELY ONLY ON THE AMOUNT SHOWN ON THE TRUCK METER DELIVERY TICKET.
Truth In Quality |
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Hard Coal vs. Soft Coal - Up to 5.75% Difference in BTU's | Hard Wood vs. Soft Wood - Up to 4% Difference in BTU's |