Propane (C3H8): Main Component of Marketed LP Gas: Storage and
Transport Issues, Exports, Supply/Demand, Source of Home Heating, Cooking, Petrochemical Feedstock for
Propylene, and a Long Established but Growing Transportation Fuel
Propane Facts, History, and Current Production
About 70% of propane is derived from natural gas and 30%
from refined petroleum. Propane is typically the third most common component of
wet or rich natural gas after methane and ethane. In so-called “dry gas” there
may only be trace amounts of propane or none at all. Propane and LP gas
(liquified petroleum gas) as are not exactly the same. LP gas is mostly propane
with some normal butane and some iso-butane. Propane is a gas at normal temperature
and pressure but like the other natural gas liquids it can be compressed into a
transportable liquid. Propane is liquefied when pressurized to 160 psi and is
stored at in tanks at 200 psi at 100 deg F. When it is de-pressurized by being
drawn from the tank for use it changes back into a gas. LP gases were first
isolated around 1911-1913. By 1927 annual U.S. production reached 1 million
gallons, by 1945 it was 1 billion gallons, and by 2004 there was over 15
billion gallons being used annually in the U.S. Some propane is imported, mostly
from Canada (via pipeline and rail) although U.S. supplies are generally
adequate. Even so, there was a temporary shortage in the recent winter of
2013-2014 with the polar vortices. Production growth for propane is greater
than all the other NGLs – 50% of NGL production growth. This is due to its
abundance in natural gas and no need to reject it (keep it in the natural gas
stream) like ethane is rejected. Propane production from natural gas processing
plants grew by 260,000 Bbls/day from 2012-2014. This is due primarily to the
high propane content of much shale gas, especially the Marcellus and Utica, the
main gas production growth drivers in the U.S.
Propane Combustion
Propane combusts cleaner than gasoline but not as clean as
natural gas, or methane, which would be considered the “lightest” hydrocarbon.
Basically the more carbon atoms in the formula of the hydrocarbon, the heavier
it is and the “dirtier” is its combustion in terms of soot, carbon monoxide,
carbon dioxide, and impurities like SO2 and NOx.
Primary Propane Storage and Transport
There is propane storage in places such as Sarnia, Ontario;
Fort Saskatchewan, Alberta; Conway, Kansas; and near the NGL Hub at Mt.
Belvieu, Texas. Propane is stored in huge underground salt caverns in these
areas. Up to 80 MM Bbls can be stored. Propane is also shipped by pipeline,
truck, ship, barge, and railway.
Propane as a Petrochemical Feedstock for Propylene in Propane
Dehydrogenation Units
Several new Propane Dehydrogenation Units are scheduled to
be built in the U.S. over the next few years. These plants can produce ethylene
and propylene from propane. As ethane crackers rely on ethane as feedstock
their production of propylene will decline. The propane dehydrogenation units
can then be the most economic source of feedstock for propylene production. A
new DOW Chemical propane dehydrogenation unit came online in December 2015 and
one more new big one is slated to come on soon. These new plants will increase domestic
propane demand slightly in the short-term but not a whole lot so exports will
continue to increase.
Propane Prices, Demand Projections, and Exports
New petrochemical demand in the U.S. is expected to be
offset by reduced demand in the home heating sector as more customers switch to
electricity and cheaper natural gas where available. More efficient appliances
are also expected to slow propane demand. Exports to Latin America, Europe, and
the Asia Pacific are expected to take up excess U.S. supply. Soon more propane
will be exported from the U.S. than is used in the U.S. Propane prices, and
indeed all NGL prices, dropped significantly in late 2014 with the oil price
crash. In December of 2014 propane exports commenced from the Marcus Hook,
Pennsylvania facility. So far 185 new propane-carrying vessels have been built
with more expected. Currently, U.S. propane inventories are at an all-time high
but are expected to come down as domestic gas production slows and as exports
increase. Projections are that propane inventories will be in the normal range
through 2017. The EIA predicts modest growth in propane production over the
next few years. Propane exports increased drastically from 10,000 Bbls/day in
2011 to 500,000 Bbls/day in 2015.
The Potential of LP Gas to Alleviate Energy Poverty and Extend Lives
The portable, generally inexpensive, and generally safe nature
of propane-dominated cylindered LP gas gives it the unique ability to alleviate
energy poverty in remote and rural areas throughout the world. Propane fires
for cooking and heating can replace dung and wood fires that when unvented or
poorly vented can lead to very significant health problems as well as house
fires. Even in the U.S. and developed countries it can be quite convenient to
have a propane tank and small heater for backup in case of an outage or to stay
in rural cabins without grid or pipeline access.
It is estimated that over 1.5 million people die premature
deaths annually around the world due to the chronic effects of smoke from
biomass. It is also a fact that cooking smoke disproportionately affects women
and children. In 2010 then Secretary of State Hillary Clinton and the U.S.
State Department launched the Global Alliance for Clean Cookstoves which sought
to provide aid for the 4 billion people who cook with solid fuels, often
without adequate ventilation. Due to cost most of the stoves were pelletized and
small biomass stoves that were a significant improvement but LP gas stoves are
also offered to those who can afford to buy the fuel. Countries in need like
India, China, Kenya, Nigeria, and many others may also subsidize safer fuels
such as LP gas. The Clean Cookstove project can also potentially alleviate CO2
emissions by increasing the sustainability of biomass harvesting and processing
and burning it in lower emissions stoves and thus could be benefited by carbon
pricing by providing offsets say advocates. Black carbon, or soot, from wood
and dung fires in India has also been implicated in accelerating the melting of
Himalayan glaciers by altering the albedo if the ice so that it absorbs more
heat and reflects less heat.
Propane in the Landscaping Industry and as a Fuel for Forklifts
Recently, there is a trend of outfitting mowers and
landscape equipment to run on propane. There are significant advantages: less
pollution, fueling from a tank installed on company premises, quieter
operation, and lower cost. My guess is that maintenance may be easier than
gasoline equipment where ethanol content in gasoline and condensation can sometimes
be problematic. There are also federal and state incentives to covert gasoline
and diesel equipment to run on propane which aids the economics further.
Propane is a common fuel for forklifts and can be used inside warehouses due to
its lower emissions, especially its lower carbon monoxide emissions.
Some Current Storage and Transportation Issues (Including the
Multiple Mariner East NGL Pipelines and the Utopia Pipeline)
As mentioned above, propane storage fields are concentrated
in just a couple areas in the U.S. and in Canada and yet demand is spread
throughout both countries and demand can spike in the winter. These underground
storage facilities are referred to a primary storage. Propane is transported
via pipeline in “purity” pipelines which is pure propane or LP gas, or in
y-grade or “raw make” pipelines which transport unseparated natural gas
liquids. A current pipeline attempting to be developed is the Sunoco Logistics
Mariner East 2 line which is slated to run alongside their Mariner East 1
pipeline that has carried both propane and ethane and on the same right-of-way.
They are also evaluating an will make a decision soon as to whether to add
additional capacity on a second Mariner East 2 line (ME2X). All the pipes will
delivery natural gas liquids to the Marcus Hook facility for the petrochemical
plant, for local markets, for export to Europe, and for export to the Gulf
Coast. There has been significant opposition to this pipeline even though there
is already a pipeline there! The opposition is due to the fact that much of the
propane would be exported so that pipeline opposers are claiming that FERC
eminent domain would not be applicable to exported products.
Propane may be transported via pipeline as a mix of NGLs in
a y-grade or “raw mix” pipeline, in a propane “purity” pipeline with just
propane, or in a mix with another NGL or two, typically ethane or butane. The
Utopia East Pipeline is planned to carry a mix of ethane and propane from the
Utica Shale areas in eastern Ohio to Toledo in northwest Ohio and on to Windsor,
Ontario for a petrochemical feedstock. This pipeline is slated for an initial
capacity of 50,000 Bbls per day with two pump stations to be expanded with additional
pump stations to 75,000 Bbls per day. Its proposed full in-service date is Jan,
2018. It is a 240-mile 12-inch line. It is a ‘common carrier’ pipeline which means
it will transmit product as supplied by any company requesting transmission
that it can fit rather than being dedicated to specific customers.
Crestwood Midstream Partners Propane Storage Project in New York
Unlikely to Be Approved
New ideal underground storage opportunities have been
sought. One is in the old Cargill salt works near Seneca Lake in upstate New
York now owned by Inergy LP and Crestwood Midstream Partners. This is an ideal
salt cavern storage situation and gas has been stored there for many years. The
plan is merely to expand the storage to add LP gas. The gas would be stored in
the brine that fills the salt caverns but also would need to be separated out
from the brine when retrieved which requires flaring and compression. LP gas
has been stored without incident in small brine-filled salt storage caverns in
the same formation in New York nearby since the 1950’s. This planned expansion
has met with anti-fossil fuel protests, led by Sandra Steingraber, a scientist
but also an environmental activist. Famed environmentalist Bill McKibben also
recently joined a blockade protest of the facility. She and other trained protestors
are probably over-exaggerating the dangers of the facility although some
dangers do exist with any hydrocarbon development and storage fields are no
exception as the recent Aliso Canyon leak showed. However, that leak was clearly
based on a known aging and faulty well and bad judgment. Even so, since Seneca
Lake is a source of drinking water for 100,000 people and the project would
entail significantly increased rail traffic of pressurized containers of
propane and butane, there may be slightly more risk and I predict that the
project as it is now will not be approved in light of the New York state trends
against “fracked” gas. In addition, many local businesses and municipalities
have come out in opposition to the project. However, New York residents still
use significant amounts of propane and lack of storage may exacerbate shortages,
causing more to have to be trucked on short notice in dangerous weather
conditions. The NGL Hub at Marcus Hook, near Philadelphia may end up being a
supply point for New York propane.
Secondary and Tertiary Storage
These days secondary and tertiary propane storage in production
and distribution facilities and individual tanks is kept better documented than
in the past in the event of winter shortages. This is due to the fact that
secondary and tertiary storage is more immediately important in supply
shortages than primary storage which in the past has held an overhang of about 20-25%
of annual usage. Primary storage capacity vs secondary plus tertiary storage
capacity are roughly the same (or at least were in 2000). Since propane is predominantly
a heating fuel (it is not used for electricity and it transportation use is
limited) its price, supply, and demand are seasonal. While there are extensive pipeline
systems that transport propane, still much of the propane must be shipped from
pipeline terminals to retail facilities by truck and truck transportation can
be hampered by weather and re-supply can be slow in the event of a shortage.
Propane as a Growing Transportation Fuel
Propane has long been utilized as a transportation fuel.
Currently, it is the third most commonly used fuel in the U.S. after gasoline
and diesel. Several million vehicles
from light to heavy duty run on propane worldwide. Although LPG-fueled cars are
rare in the U.S. there are about 4.5 million LPG vehicles in Europe. Compared
to gasoline propane holds 86% of the energy of gasoline at the same tank size. It
has advantages over gasoline and diesel in terms of greenhouse gas emissions,
pollutants, and smog-forming NOx and VOCs. It runs quieter and remains cheaper
than gasoline and diesel. It is also produced in America as opposed to refined diesel
and gasoline which combines significant amounts of foreign imports. Vehicles
typically have longer life than gas and diesel vehicles. Like CNG and LNG
vehicles they are superior in fleets, buses, school buses, waste management
vehicles, etc. due to the reduction in emissions of urban vehicles that have
long idling times in populated areas. Propane
as a transport fuel is also called ‘autogas.’ Propane vehicles are said to have
lower maintenance costs as well. Some people opt to convert their vehicles to
run on propane with conversion kits but these can be expensive, subsidies are
generally poor, and fueling requires proper connections which are not always
universal. However, in places like the U.K. and other European countries, and
Australia, propane or bi-fuel (propane and gasoline) vehicles are common and
refueling infrastructure is generally more available.
The Many Other Important Uses for LP Gas
Other uses for propane gas include vented furnaces, unvented
open-flame heaters, pizza ovens, cook stoves for food vendors, smokers, kilns,
forges, torches, soldering, flame weeders, floor sanitizers for livestock
enclosures, industrial burners, jewelry melting and moulding, hot water tanks, refrigerators,
dryers, fuel for ballooning, LPG-fueled boats, welding and cutting torches,
grain and fruit drying, outdoor patio heaters, BBQs, and home stoves. Thus,
propane is a very versatile and portable fuel. It also has a very good safety
record and accidents are quite rare – although they have occurred.
Bio-Propane?
LPG has been made synthetically with the use of genetically
engineered E Coli bacteria that are tricked by enzymes into making propane as a waste-product from sugar consumption.
This work is in the research stages and the authors of the work suggest 10
years to when it could become a commercial process.
References:
Short-Term Outlook for Hydrocarbon Gas Liquids, A Supplement to EIA’s
Short-Term Energy Outlook, March 16, 2016
On the Cutting Edge with Propane Power in Pittsburgh – by Dan Dix, Shale
Media Group, April 6, 2016
Propane, at Wikipedia.com
The Role of Liquified Petroleum Gas in Reducing Energy Poverty – by Masami
Kojima, The World Bank, Extractive Industries for Development Series #25,
December 2011
Storage Gaps Threaten US Winter Propane Supply – by Dan Lippe, in Oil
& Gas Journal, 12/04/2000
Gas Storage Expansion Plan Adds New Wrinkle to Fracking Controversy –
by Tina Casey, in Triple Pundit (triplepundit.com), April 23, 2013
Gas Storage at Seneca Lake Fuels Outrage and Support – by Ray Finger,
in Star-Gazette (stargazette.com), Jan 16, 2015
Seneca Lake Gas Storage: Safety, Environment Concerns: Fears Over
Explosion, Increased Lake Salinity, Danger of Rail Transport of Propane Gas –
by Tome Wilbur, in pressconnects.com, June 26, 2015
Sunoco LP Delays Construction of Mariner East 2 Pipeline, (Sunoco LP
Conference Call) from Seeking Alpha, posted at Marcellus Drilling News, Feb,
26, 2016
New, Heavier-Duty Propane Autogas F-750 In Production – Roush Clean
Tech (roushcleantech.com)
Igniting Change: A Strategy for Universal Adoption of Clean Cookstoves
and Fuels – by Leslie Cordes and the Global Alliance for Clean Cookstoves
LPG – Propane as a Transportation Fuel – Consumer Energy Center,
California Energy Commission (Ca.gov)
The Domino Effect: GHow the Shale Revolution is Transforming Energy
Markets, Industries, and Economies – by E. Russel Brazel (CWL Publishing, 2016)
The Properties and Composition of LPG – by Eric Hahn, LPG Gas Blog –
elgas.com.au
LPG Becomes a Renewable Energy Source – by Eric Hahn, LPG Gas Blog –
elgas.com.au
Kinder Morgan – Utopia East – utopiapipeline.com
Natural Gas – Fuel for the 21st Century – by Vaclav Smil
(Wiley, 2015)
