Propane Explained – Use of Propane

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How Is Propane Used?

Although propane accounts for less than 2% of all energy used in the United States, it has some very important uses. Propane is the most common source of energy in rural areas that do not have natural gas service.

In homes, propane is used for:

  • Heating homes
  • Heating water
  • Cooking and refrigerating food
  • Drying clothes
  • Fueling gas fireplaces and barbecue grills

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On farms, propane is used to dry corn and power farm equipment and irrigation pumps. Businesses and industry use propane to run their fork lifts and other equipment.

While only a small fraction of propane is used for transportation, it is the second largest alternative transportation fuel in use today. Instead of gasoline, propane often fuels fleets of vehicles used by school districts, government agencies, and taxicab companies. In recreational pursuits, hot air balloons use propane to heat the air that makes them rise.

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The Use of Propane Varies According to Customer, Season, and Region

Petrochemical Industry Use — Seasonal and Regional

About 49% of the propane consumed in the United States is used in the petrochemical industry. Propane is only one of many possible raw materials used by this industry to make products such as plastics. Because the petrochemical industry can switch to other raw materials when the price of propane becomes too high, U.S. propane usage tends to exhibit seasonal patterns, rising during the summer when its price is low and falling during the winter heating months (October-March) when its price is high.

Petrochemical demand is also regional due to the high concentration of petrochemical plants in the Gulf Coast region.

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Residential/Commercial Use — Highly Seasonal and Regional

Excluding propane gas grills, residential and commercial use accounts for 40% of all propane used in the United States. Of the 111 million households in the United States in 2005, 12.6 million used propane for one use or another. Because 46% of these households rely on propane for their primary heating fuel, demand is highly seasonal. Propane is most commonly used to provide energy to areas not serviced by the natural gas distribution system. Thus, it competes mainly with heating oil for space heating purposes.

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Homeowners in the Midwest use it predominantly for heating, while Northeast residences rely on it more for cooking.

Farm Use — Seasonal and Regional

Farm use is the third largest retail propane market, accounting for about 5% of total demand. Farm or agricultural uses of propane include crop drying, weed control, and fuel for farm equipment and irrigation pumps. The amount of propane used for crop drying, the largest component of farm use, is not only seasonal (fall months), but can vary greatly from year to year depending on crop size and moisture content.

Agricultural use of propane is primarily concentrated in the Midwest.

Other Industrial Use — Not Seasonal But Regional

Use of propane by industries other than petrochemical, the fifth largest propane consuming sector, accounts for about 3% of U.S. consumption. Uses include space heating, soldering, cutting, heat treating, and fork-lift fuel.

About 60% of industrial applications for propane occur in the Midwest and are typically not seasonal.

Transportation

Transportation is one of the smallest uses for propane. It is the second largest alternative transportation fuel used.

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