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2014 Outlook

Supply, Consolidation Top Marketer Concerns for 2014

Propane marketers of all sizes have a lot on their minds as we enter the new year. Consolidation continues to affect the industry as limited liability companies and majors continue snapping up smaller firms. Some suggest those mergers may leave customers missing the human touch of the smaller companies, depending on the changeover. Meanwhile, residential business is still a challenge as homeowners continue the conservation habits of past decades, which only accelerated following the economic recession of 2008. However, marketers are also looking toward positive signs, such as the nice cold-weather start to this heating season, which came right on the heels of a robust fall crop-drying season. Both events have spiked demand this fall and winter and are keeping marketers running to fill fuel orders, a rosier scenario, certainly, than the non-winter of 2011-2012 and thin grain drying demand during the past few harvest seasons.


But when asked about their outlook for the propane industry in 2014, several marketers zeroed in on increased exports as a top issue of concern. Shale gas production has driven up propane supply to unprecedented levels, yet producers are exporting vast amounts because attractive selling opportunities exist abroad for lower-priced U.S.-sourced product. Meanwhile, the price of propane, which could be expected to be lower with the increased supply, showed gains at an accelerating pace at the end of 2013. Market watchers note that propane prices might actually have to exceed 160 cents/gal. before exports will no longer be attractive to overseas buyers. At the same time, gallons have already been contracted far into the future, and it is estimated that current exports are in the range of 288,000 bbld. And more export infrastructure is in the works to facilitate additional volumes moving abroad.

An Arctic Blast… And Then Some

The exceptionally cold start to this winter has had a strong impact on dealers, as well as the energy market in general in many states. Although residents in various cold-weather states are accustomed to dealing with extreme temperatures, residents of Oklahoma might typically see only a couple of cold-weather spurts each winter, and usually not in early December.



This past December was different, as Oklahoma saw temperatures fall into the teens, and the chilly weather continued in January. The conditions prompted Oklahoma Gov. Mary Fallin on Jan. 6 to declare a Liquefied Petroleum Gas Emergency and issue an exemption to 49 CFR 390-399, which includes hours-of-service (HOS) regulations.

Bobtail Tank Head Shortage Continues

Roger Smith has been getting a number of calls from propane marketers lately, wondering when they will receive their truck orders from his company, Kurtz Truck Equipment (Marathon, N.Y.). But Smith, vice president of marketing for the company, can’t give them a straight answer right now because of a bobtail tank head shortage currently plaguing the industry.

“We have about 20 signed contracts to build trucks, and we can’t get the tanks to build them,” Smith said. “I’m telling them that I talk to my tank supplier almost every day. Things are changing a little bit, and some heads are starting to pop up. I did find out I’m going to get three tanks in the month of October. It’s better than nothing, but it’s not going to light the world on fire.”

The reason for the uncertainty is that Trinity Heads (Navasota, Texas), the primary company in the United States that makes propane bobtail tank heads, has experienced mechanical problems with the press that forms the heads. The machine has been down or producing at reduced capacity for several months, affecting the operations of truck builders and their propane marketer customers. Smith noted that Kurtz Truck Equipment has always stocked surplus tanks, but they sold quickly when the supply got tight.

Inventories Low, Prices High; Wished-For Winter Arrived, in Spades!

It’s official. Global warming is on hold this winter. A boatload of climate scientists even got stuck in their own experiment. That is, they were wedged in Antarctic Ocean ice aboard a Russian research ship from Christmas morning to Jan 2 when they were finally lifted by helicopter to an icebreaker sent to rescue them.



More pedestrian pursuits are causing headaches here at home, with about 25 states as of press time issuing emergency declarations granting hours-of-service (HOS) waivers to speed winter propane deliveries. This is occurring before a backdrop of a supply market that is tight, expensive, and increasingly becoming more impossible throughout the nation. Despite the U.S. producing 9 MMbbl more propane each month than 10 years ago, short-fills are the order of the day, industry watchers note, due to the dramatically changing import/export picture, a challenging fall crop drying season, and early and sustained frigid temperatures this winter.



Regionally, the Northeast was welcoming its own rescue ships in January as DCP Midstream chartered a 10-MMgal. waterborne cargo imported from Norway (North Sea) into Providence, R.I. the week of Jan. 5. Two more carriers were scheduled to arrive shortly thereafterFeb. 5 to Feb. 10 windowwith an additional 12 MMgal. Meanwhile, DCP was gathering interest for yet another ship, with delivery in mid-February. At the same time, the Propane Gas Association of New England was cautioning its members that another “Arctic Intrusion” was headed to the region, and to “order every load you can get your hands on, including spot loads….” The association estimated that it would take 5000 transport loads to refill New England storages.



And while imported waterborne cargos and anticipated additional railcar deliveries were expected to relieve a bit of the pressure in the Northeast, the situation in the Midwest as mid-January passed was becoming dire, and prices responded as would be expected. Spot and posted prices first spiked 20 cents, then another 32 cents the week of Jan. 12. The panic followed a Jan. 15 EIA inventory report showing a deep 3.8-MMbbl draw for the nation as of Jan. 10, with 1.5 MMbbl accounted for in the Midwest. That left stocks in the heartland at a startlingly low 11.5 MMbbl, with a long stretch of winter left to go. Traders stated the obvious, “We could run out.”



While Conway, Kan. spots started the week at 138.875-139.50 cents/gal., by Thursday they had rocketed to 158.00-161.00 cents. Friday spots soared to the 190.00-cent range, widening the premium to Mont Belvieu to more than 54 cents. At the same time, Conway’s posted average on Jan. 13 was 149.170 cents. Thursday it jumped to 168.920 cents, and Friday it was nearing 200.00 cents/gal. Allocation remained in effect in the region as product shortages continued almost everywhere east of the Rockies and retailers scrambled for loads from wherever they could get them, and at nearly any price.



While the nation as a whole was experiencing a year-over-year inventory shortfall of 25.3-MMbbl, the Midwest alone was down nearly 9 MMbbl. As noted by EIA, at the beginning of November the corn harvest in the Upper Midwest pulled large quantities of propane from distribution terminals for grain drying. Between late-November and December, supply disruptions prevented terminals from replenishing supplies of propane, and with the onset of severely cold weather, propane supplies were extremely tight, forcing allocation and other emergency measures to ensure supply. The Midwest spot price thereafter spiked compared to Mont Belvieu. The agency comments that regional propane prices will likely need to rise to keep propane in the region, rather than flowing south to the Gulf Coast.



EIA explains that due to the effects of increased energy production, infrastructure changes have allowed growing propane supplies and other liquid hydrocarbons to flow south from, and through, the Midwest to supply Gulf Coast petrochemical demand and gain access to the global export market. Recently, the onset of severely cold weather in the Midwest has increased regional demand for propane and other heating fuels.



Even before the recent cold snap, Midwest propane markets were relatively tight compared to those on the Gulf Coast for other weather-related reasons. In addition to space heating needs, the Midwest uses propane for agricultural applications such as corn drying. A late 2013 corn harvest, along with cold, wet weather, resulted in strong demand for propane at distribution terminals in the Upper Midwest. For the week ended Nov. 1, Midwest propane inventories dropped more than 2 MMbbl, the largest single-week stock draw in November since 1993. This demand prompted a strong price response, and propane at Conway moved to a 3-cent/gal. premium to Mont Belvieu during the first week of November, the first such premium in nearly three years.



After the harvest, said EIA, logistical problems prevented the region from fully replenishing inventories before the onset of winter. The Upper Midwest is supplied via pipeline flowing north from Conway, home to 30% of the nation’s propane storage; the Cochin pipeline coming south from Canada, and from rail deliveries. The Cochin, which delivers from Canada to the Upper Midwest, was out of service for maintenance from late November to Dec. 20 and unavailable to deliver supplies. Rail transportation disruptions, both due to weather and other factors, prevented deliveries from Mont Belvieu and Conway, as well as from Canada.



EIA further clarifies that since 2010, propane prices at Mont Belvieu were higher than at Conway by as much as 30 cents/gal., prompting propane supplies to flow south on newly expanded southbound pipelines. Large local petrochemical demand and access to the global propane market via expanded export capacity supported Mont Belvieu prices and encouraged propane from the Rockies and elsewhere in the Midwest to flow south.



Low temperatures and winter storms closely followed the 2013 corn harvest, and logistical problems continued. The colder weather increased residential space heating demand at a time when markets were already tight. As demand outpaced supply, inventories dropped further, by 1.5 MMbbl and 1.2 MMbbl for the weeks ended Dec. 6 and Jan. 3, respectively. By Jan. 3, Conway prices had vaulted to a 21-cent premium to Mont Belvieu.



Strong back-to-back demand surges, low inventories, and supply challenges forced emergency measures to ensure the adequacy of residential propane. Several Midwestern states responded by suspending limitations on hours-of-service for propane delivery drivers. Long lines formed at distribution terminals, and supplies were hauled in by truck from as far away as Oklahoma and points east. Since the week ended Oct. 11, Midwest propane inventory levels have dropped by 12.8 MMbbl, compared with a drop of 7.3 MMbbl for the same period’s five-year average.



Because global propane prices are significantly higher than U.S. prices, propane supplies will continue to move to Mont Belvieu for export, EIA points out. Midwest propane prices will need to rise to keep marginal supplies in the region when they are needed. The Midwest will also need to prepare for the coming reversal of Kinder Morgan’s Cochin pipeline, the agency adds, which delivers propane from Canada to the Upper Midwest. The reversal will change supply dynamics in the Midwest. “However, this situation may also improve the economic prospects for infrastructure projects to process and transport HGL (hydrocarbon gas liquids) from the Bakken formation in North Dakota and Montana to Midwest markets farther east.”



And it’s not as if Canada can jump in and help out this year. January saw our northern neighbor experiencing the same scenario of short-filling and transportation constraints after the late fall harvest and early winter drew down supplies there as well. Similarly, spot and posted prices in eastern Canada have spiked. Sarnia spots on Jan. 16 were at a never-before-seen 221.375-221.50 cents/gal, while the posted average stood at a tall 221.435 cents. In Edmonton, meanwhile, spot propane was trading at 171.50-180.00 cents/gal., while the posted average was 189.590. By Jan. 17, one wholesaler had increased its Edmonton posting to 199.38 cents and its Sarnia posting to 225.23 cents. Like the U.S. Midwest, it looked like the sky was the limit, with only clear high-altitude flying weather ahead for additional price hikes.



And while the Canadian Propane Association was assuring consumers there was no actual shortage of propane in inventory, rather that transportation issues were in play, stocks were certainly significantly lower than last year. The nation’s National Energy Board (NEB) reported at the beginning of January that overall volumes fell a sharp 24.1% during December compared to end of November levels, dropping to a total of 4.8 MMbbl. For the year, inventories were down a steeper 29.4%. NEB reported that propane supplies in the east fell 24.8% to begin January at 2.1 MMbbl, while in the west stocks were down 23.5% to settle at 2.7 MMbbl at the end of December. For the year, eastern storages were down 26.1% and western volumes declined 31.8%.



With the long-wished-for colder winter temperatures gripping the east-of-the-Rockies region this season, propane demand has obviously ramped up. U.S. demand, as reported by EIA for the week ended Jan. 10, reached 1.736 MMbbld, nearly 0.2 MMbbld higher than during the same period the previous year. Since Nov. 1, that plus-0.2 MMbbld figure appears more often than not week to week, with year-over-year demand increases of 0.1 MMbbld common and a high of 0.4 MMbbld posted Nov. 7.



Logically, accompanying the high-demand/crimped-supply market are markedly higher prices from last year. EIA reported Jan. 15 the U.S. average residential propane price at 284.3 cents/gal., up a significant 57.5 cents from the comparable period last year. With those spiking year-over-year numbers, consumers obviously aren’t happy and are complaining about prices and prompt product availability on both sides of the U.S.-Canadian border. At the same time, retailers since harvest season have been pressured to shave margins to prevent their customers from going from sticker shock to enraged revolt.              —John Needham

Marketers Get Help Managing Fleet Headaches

As the everyday responsibilities of running a propane company compound, many marketers are finding that a fleet management company can help ease some of the burdens associated with handling their fleets in the most economical and thorough manner. Many have started to hire fleet management companies to oversee the maintenance of their fleets, including bobtails and service vehicles.

They have also sought the help of fleet management firms regarding vehicle acquisition, vehicle financing, maintenance, insurance, fuel management, remarketing, and other fleet management duties. Fleet management companies can help with one or several of those duties.

While a number of fleet management companies work with all types of companies nationwide, ARI, based in Mt. Laurel, N.J., is one of the first to have stepped into the propane arena. Several years ago, it recognized that the propane industry could use fleet management services. Rob Hoysgaard oversees the company’s utility and government group as director of sales support.

The company places propane, natural gas, electric, water, and telecom companies under that category.

 “If you talk to some individuals in the propane industry, they would tell you that they wouldn’t consider themselves a utility, but because it is a highly specialized industry with unique fleet needs, much like a utility or government fleet, we rolled it into that group,” Hoysgaard noted. Hoysgaard is active within the propane industry, serving on the board of directors for the National Propane Gas Association. Bill Doman, department head, sales support, for ARI will speak at this year’s annual conference in Atlanta. ARI also recommends propane as an autogas whenever it is appropriate.

Various fleet management companies do business overseeing vehicle fleet programs for all types of companies. And, like other fleet management companies, ARI can manage the vehicles from acquisition to disposal. But Hoysgaard notes that ARI specializes in what it refers to as complex truck fleets. The propane industry’s use of vehicles with valves and hoses fit that category. ARI works with propane fleets to handle tasks such as upfitting a chassis for different applications. And once the vehicle is on the road, ARI works with the fleet to use the best providers to maintain the vehicle. That has been especially important over the past several months, when extreme weather conditions have affected much of the U.S., putting pressure on fleets and the overall supply of propane. ARI has worked with customers to ensure their fleets are well serviced and on the road, so they can focus on delivering their product and servicing their customers.

One propane marketer that uses the services of a fleet management company is Superior Plus Energy Services (Rochester, N.Y.), which hired ARI to handle various fleet management duties. Superior Plus director of business development Bruce Ruppert has seen how ARI can help a propane company manage its fleet headaches.

Over the past few years, Ruppert has been involved with Superior’s acquisitions of other businesses. He was a Griffith Energy employee when Superior Plus acquired that company in 2010. Soon after the acquisition, he was given responsibility to manage Superior’s fleet of vehicles, which included propane bobtails and service vehicles along with delivery vehicles for fueloil and kerosene. Couple that with managing vehicles for Superior Plus’ Burnwell Energy business, and Ruppert was managing vehicles for three separate companies.

“If there were three ways of doing things, we were doing all three,” Ruppert said.

In addition to the tasks mentioned above, ARI also assists Superior Plus with regulatory compliance, licensing, and accident management. ARI also manages maintenance duties for Superior’s vehicle fleet, helping Ruppert avoid one of the main headaches of managing the fleet.

Superior Plus uses ARI’s Web-based system to track maintenance issues for every vehicle. Previously, Superior used a vehicle tracking system for its Griffith Energy business in New York, but the system was labor-intensive. A Griffith employee had to enter each invoice manually, and this system had not been extended to the other states in which it did business. If someone questioned Ruppert about a specific fleet expense, he could not provide any detail. “When someone would say ‘Why is this over budget?’ it was a question I could not answer,” he said.

He can answer questions like that now. Superior Plus began a pilot program with ARI in March 2013 to manage maintenance for a small portion of its fleet in New England. That was successful enough for Superior Plus to add the program to its New York and Pennsylvania locations toward the end of last year.

Como Oil & Propane (Duluth, Minn.) is another propane marketer that utilizes ARI’s services, having ARI serve as Como’s fleet manager. Covering northeast Minnesota and northwest Wisconsin, Como sells propane and fueloil through 10 locations. In addition to managing the bobtails and service vehicles for Como’s propane business, ARI is also responsible for its oil tank wagons and its fleet of about 12 semi-tractors.

Vehicle maintenance is one of the main duties ARI handles for Como. Jim Olson, Como’s director of safety, compliance, and asset management, can look at real-time reports on his fleet by viewing ARI’s Web-based system.

“At any given moment, our managers can pull up the information and see from an administrative standpoint where all the vehicles are,” Olson noted. The reports provide information such as notifications of when preventive maintenance is due; ARI also sends him e-mail alerts on abnormal odometer and fuel consumption data.

He can create his own detailed reports, with the ability to sort by repair item such as brake jobs. He can see which of his company’s divisions might be harder on the equipment than others, and he can also review cost per mile by division, company-wide, or by vehicle.

“It’s a staggering amount of data that no one in our company could have even started to attempt to collect and collate based on our old programs,” Olson stated.

ARI will also create special reports. For his accounting department, Olson needed to summarize various categories of maintenance and repairs by division and by month. “They just plug it into the financials, and they’re done,” he said. The fleet management company also manages Como’s relationship with its vendors. ARI pays the vendors and sends Como one bill, which took a big load off Como’s accounts payable department.

Superior Plus and Como Oil & Propane are just two of several propane marketers that are clients of ARI.

In the area of maintenance, ARI will manage the work that’s done on the vehicles, making sure the propane marketer is getting the right repair at the best price, which helps control costs. ARI operates three call centers 24 hours a day, seven days a week, to ensure repaired vehicles are returned back to the marketer as quickly as possible. The company will pay all the vendors and provide the propane marketer with one monthly invoice for maintenance as opposed to the marketer receiving many invoices from many vendors. ARI can help a small marketer that might use only one repair shop, or medium to large marketers that might need help with licensing and compliance in multiple states. ARI will customize its services to meet a marketer’s needs. The fleet management company offers various services to help propane marketers manage vehicle expenses.

Maintenance

ARI’s staff manages the bid process for maintenance on Como vehicles. Como gives ARI clearance to accept bids up to a certain dollar amount, which Olson describes as a real timesaver. Once the vendor provides an invoice, ARI immediately enters it into its online fleet management system, providing him with real-time data about his fleet.

“The main issue is managing our repairs, maintenance, and tracking all the data in real time,” Olson noted.

Olson also likes the customized reporting that he can get from ARI. When he recently needed to summarize various categories of maintenance and repairs for his accounting department, and he needed it in a specific format so he could send it every month to accounting, ARI handled that. The company also helps Olson shorten the time he spends dealing with vendor invoicing issues since it sends Como one bill per month for all its maintenance. “That reduced a tremendous load on our accounts payable department; I can’t begin to tell you the time savings that provided,” Olson stated.

ARI also works with Superior Plus in the area of maintenance. “They are our advocate,” Ruppert explained. Superior deals with vendors of all sizes, and they are now all part of ARI’s program. When a Superior Plus truck breaks down, the driver of that truck now calls ARI. A representative from ARI with mechanical knowledge then deals with the repair vendor.

Although Ruppert likes to think that his vendors are honest with him at all times, he appreciates that ARI looks out for him as it negotiates with vendors to keep prices down. In the past, Ruppert had no good way of managing that process because there were so many transactions. In the past, Ruppert received hundreds of invoices every month. Now, with one bill from ARI, he saves the labor required to enter all the data. In addition, he gets detailed reporting on the repairs. If he sees a truck repair price on ARI’s reporting site that looks unusual, he can drill down almost to the nuts and bolts to see detail on the repair.

For example, Ruppert can look specifically at brake jobs. If he sees more frequent brake jobs at some locations than others, he can investigate if drivers are abusing the vehicles or if he needs to buy better brake pads. When the company receives its financial reports, questions might arise regarding items in other areas of the business. “But there are no questions on the vehicles because we’ve got that all figured out by the time the financials come off,” he stated. “That’s a much better world for me to live in.”

He appreciates the improved control he now has over expenses, and he likes that his location managers also have some control over the process. He has given ARI the authority to approve any repair items up to $1000. The fleet management company sends an email to the location manager and copies Ruppert for any repair over that amount. He likes that his managers can control the bottom line for their specific locations.

Fuel Management

Ruppert’s one bill per month from ARI includes his company’s gasoline and diesel costs. Superior Plus drivers use a Voyager fuel card, and transactions on that card go through ARI’s online tracking system. He can determine just how much each location spends on fuel, and email alerts enable him to get a handle on driver behavior and possible issues quickly by notifying him if a driver using a truck with a 50-gal. tank purchased 60 gallons of fuel in one transaction, for example.

Inventory Management

ARI tracks vehicle inventory for Superior Plus. The online system includes each vehicle’s identification number, fuel tank capacity, and license plate number, and shows when the vehicle is due for registration and preventive maintenance. It also reports when his bobtails and tank wagons are due for their visual and leak tests.

“We’re actually having locations key in their mileage every week for the trucks so we can have that mileage for tax reports, and sometimes you need that for registration,” Ruppert stated. “Once I have mileage, if I’m trying to do periodic maintenance on a vehicle every so many miles, I know when that’s due.”

Other Services

ARI assists companies on the vehicle acquisition side, facilitating bids, obtaining financing, and working with the bank in processing payments. The company offers additional services such as leasing and financing, vehicle equipment and remarketing, risk management such as motor vehicle record checks and online safety training, and accident management and subrogation.

Although Ruppert and Olson use only a few of the services, they are sold on the concept of propane marketers using a fleet management company. “I think you will see this gain more popularity in the next couple of years as people see the true benefits of it,” Ruppert noted.     —Daryl Lubinsky

Odorized Propane Sales Tumble; Overall NGLs Edge Up

State and PADD data gathered on odorized propane markets in 2012 show total U.S. sales tumbled nearly 12.9% compared to 2011, a loss of more than 1.14 Bgal. year over year. According to the American Petroleum Institute’s (API) “2012 Sales of Natural Gas Liquids and Liquefied Refinery Gases” survey released early this year, odorized propane sales in the nation stood at nearly 7.74 Bgal. in 2012 as opposed to the almost 8.9 Bgal. sold a year earlier.

The latest loss, as reported by API, follows a 3.3% decline in 2011 compared to 2010, about a 7.6% drop in 2010 from 2009, a 4% dip in 2009 from 2008, and a deficit of 3.4% in 2008 compared to 2007. The last year sales showed an improvement was in 2007 over 2006, when volumes rose 7.8%. For the five-year period—2008 through 2012—included in API’s latest report, sales figures show an erosion of more than 2.2 Bgal. that represents a near-22.2% retreat.   

The news was a bit better for U.S. sales of natural gas liquids and liquefied refinery gases—butane, ethane, pentanes plus, and propane—which edged 2% higher from 2011. However, propane, which represents a 40.5% slice of the overall NGL pie, came in 0.7% lower in 2012 from a year earlier. Butane, with a 15.9% share, gained 4% in sales in the most recent year surveyed. Ethane, 35.2% of total NGLs, edged up 3.1%, and pentanes plus (natural gasoline and other heavier hydrocarbons), with 8.4% of NGL sales, climbed 7.6%.

At the same time, total propane sales of all types dipped about 0.7% in 2012 from the prior year, shedding nearly 1.3 MMgal. to stand at just under 17.8 Bgal., which was down from the almost 17.9 Bgal. sold in 2011. PADD 1, the East Coast, gave up 3.7 MMgal. to fall almost 11.7% for the year. PADD 2, the Midwest, shed 3.9 MMgal. to slide 12.5%. Conversely, PADD 3, the Gulf Coast, captured an additional 9.4 MMgal. to advance 10.3%. PADD 4, the West Coast, Alaska, and Hawaii, sloughed off 5.7 MMgal. to flatten 12%. PADD 5, the Rocky Mountain region, was 1.5 MMgal. lower for a loss of nearly 12.7%.    

API state rankings for 2012 odorized propane sales show Michigan leading the nation in the residential sector, representing 7.1% of the segment with 2.88 MMgal. sold. Close behind is California with 2.14 MMgal. and a 5.3% residential market share. Following are Wisconsin, 2.07 MMgal. and 5.1%; Illinois, nearly 1.94 MMgal., 4.8%; and Minnesota, 1.8 MMgal. and a 4.4% slice. Together, the five states represented 26.6% of the residential sector in 2012 with 1.08 Bgal. sold.

Leading the commercial sector was California, with Florida, Texas, North Carolina, and Pennsylvania trailing. California, with 9.35 MMgal. sold, captured 6.3% of the market, with Florida, 9.13 MMgal. in sales, garnering 6.2%. Texas posted 7.57 MMgal. of commercial sales and held 5.1% of the market; North Carolina, 7.53 MMgal. and just under that 5.1% mark; and finally Pennsylvania, almost 7.05 MMgal. with 4.8%. The 4.06 MMgal. sold cumulatively by the states represented 27.4% of the commercial market.

Number one in the agricultural sector was, once again, Iowa, with North Carolina, Minnesota, California, and Illinois in pursuit. Of the 38.9 MMgal. sold and a 48.2% market share for the five states, Iowa reeled in 12.0 MMgal. and 14.9% of agriculture sales. North Carolina took 12% with almost 9.7 MMgal.; Minnesota, 8.7%, 7.03 MMgal.; California, 6.5%, 5.24 MMgal.; and Illinois, 6.2%, with nearly 5 MMgal.

In terms of overall odorized propane sales in all categories, California for the second year, was ranked first, followed in descending order by North Carolina, Michigan, Illinois, Texas, Iowa, Pennsylvania, Minnesota, Wisconsin, and New York. Of those 10 leading states, however, and not surprisingly, none exceeded prior-year sales and all posted declines.

By sales sector, API sees residential numbers off 19.2% in 2012 compared to 2011, down nearly 9.7 MMgal. Commercial sales dropped 4.9% to give up about 7.6 MMgal. Sales to retailers plunged 26.75% to hollow out volumes by nearly 9.2 MMgal. Industrial sales, meanwhile, cratered 21%, approaching 1.36 MMgal. On a brighter note, the internal combustion sector marked a 24.8% upswing for the year that represented more than 12.2 MMgal. of additional sales. Agricultural sales also rose, but modestly, edging nearly 0.74% higher year over year, a rise of a little over 5.9 MMgal.

For a further breakdown on U.S. sales of odorized propane, go to www.bpnews.com.