Propane is a member of the LP-Gas family of fuels that includes ethane and butane. Most people know propane as the energy source for backyard barbeques and as a home heating and cooking fuel used primarily in rural areas. It also is used extensively on farms for powering equipment, drying crops and running pumps. Vehicles such as fleet cars and buses can be equipped to operate on propane, which offers some environmental benefits over gasoline. Propane also provides the heat that inflates hot air balloons.

Almost half the propane used in the United States goes for commercial and residential uses (not counting outdoor grills). About 9.4 million depend on propane for one use or another, with roughly half relying on propane as a primary heating fuel.

Propane is a byproduct of both natural gas production and refining operations. It is separated from natural gas in field processing plants as well as from crude oil during the refining process. Both sources contribute about equal amounts of propane to the total supply. About 10 percent of the country’s propane supply is imported from Canada, Algeria, Saudi Arabia, Nigeria and Norway. These imports are a vital source of additional supply in periods of peak demand, such as the midwinter period.

Propane occurs naturally as a gas, but can be compressed through low temperatures or high pressure into a conveniently transportable liquid. As a liquid, it is roughly 270 times more compact than in its gaseous state. It returns to a useable gas when released from its pressured tank.

Propane prices, which tend to be higher than those of residential natural gas on the basis of equivalent energy value, have risen in recent years as the price of both crude oil and natural gas have increased. Propane also is more expensive because it cannot be transported as economically as natural gas, which can be moved all the way to the end-user through underground pipelines.

Advantages
From the standpoint of the consumer, propane can handle most of the same uses managed by natural gas – heating, cooking and operating certain types of equipment. Propane is extremely portable, nontoxic and simple to use – handy as a cooking fuel on camping trips or as the fuel for a remote farm pump. It is extremely clean-burning, which allows it to be used indoors for operating forklifts and factory equipment. Like other LP-Gases, propane is also a valuable feedstock material for the production of various kinds of petrochemicals.

Issues
Since about half of the propane sold comes from refining operations, propane shares the same refinery-related environmental and safety issues that accompany production of other petroleum products. Although propane burns cleaner than gasoline, like all fossil fuels it creates the greenhouse gas carbon dioxide when burned.

For More Information
Winter Fuels Update, a recap of the prices and supply conditions in the propane and heating oil markets, compiled by the U.S. Energy Information Administration.
Propane – energy from both oil and natural gas, an overview of how propane is produced, distributed and consumed, prepared by the U.S. Energy Information Administration.
History of Propane provides a brief overview of the origins of the propane industry and its place in the U.S. energy mix, prepared by the National Propane Gas Association.
This Week in Petroleum, a weekly overview of factors influencing the price and supply of gasoline, diesel (distillates), propane and crude oil, compiled by the U.S. Energy Information Administration.