Mad As Hell

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Most people would agree that reducing greenhouse gas emissions is a good thing. It’s how we get there, and when we get there, that creates strong disagreement.

The frustration for the propane industry is that while propane may not be the only cure to help reverse the effects of climate change, it is:

  • Low carbon (having only 3 carbon molecules to 8 hydrogen molecules)
  • One of the cleanest forms of energy compared to many of the fuels used for the generation of electricity, power, or heat, such as coal; and
  • One of the most reliable.

Fill Michigan Stadium with Coal.

There was a nearly 2 percent increase in global coal consumption last year surpassing 8 billion tons in a single year for the first time in history. That’s a large number. Picture filling up Michigan Stadium (the largest football stadium in the U.S.) with coal; then do it again 450 times!

From an economic standpoint it’s understandable. Most people around the world aren’t wealthy and coal is relatively inexpensive. Quality of life trumps idealism. But from a net-zero “save-the-planet” viewpoint, it’s kind of going backwards, isn’t it?

Reliable Energy Can Save Lives. 

There were 18 weather-related natural disasters last year. Most of them had massive and extensive power outages. Not everyone knows this (because it is often done with little fanfare), but the propane industry is always among the first to arrive following a natural disaster, helping to provide temporary heat, hot water, the ability to cook food, fuel for autogas, and power.    

And more people die each year from cold than heat, so what is an elderly couple on a remote road in upstate New York or Vermont going to do when temperatures are plunging below zero and they have no heat, no hot water, no power, and a dead EV in their garage?

If they had propane and a propane-powered generator, they would have never noticed that the power went out. Except for maybe a flicker of the lights and then the reassuring sound of their generator working.     

So Why Are Some States Forcing People to Give Up Propane?

Why are some states like New York and Vermont taking away a consumer’s energy choice, approving legislation that would effectively put the propane industry and its employees out of business?

Vermont would force propane companies to encourage their customers to use less propane or switch to electricity. That’s madness. Why would any state force homeowners to stop using a low-carbon and reliable fuel source like propane? Propane’s many benefits should be celebrated and promoted, not banned or taxed out of existence.

Mad As Hell.

This seems like a good time to recall the famous scene from Network (1976) when news anchor Howard Beale tells viewers to open their windows and yell: “I’m as mad as hell and I’m not going to take this anymore.” One person yells, then 20, then an entire neighborhood.

The good news is that people are fighting back. They can envision an energy future under state control that looks like a cheerless version of the Flintstones.

It’s Hard to Understand.

Vermont’s "Climate Council" will tell you that their electricity generation is among the cleanest in the nation. And that’s true. But let’s be honest, most of Vermont’s electricity generation relies on hydro-power that’s imported from Quebec, Canada. Most states don’t have that luxury. And ask folks in Vermont how well electricity worked out for them following an ice storm last Christmas.

Meanwhile, New York State’s "Climate Action Council" also wants to put the propane industry out of business, calling for the elimination of new propane equipment such as a furnace, stove, or hot water heater as early as 2030, as well as a heat tax to artificially raise the cost of propane to consumers to force them to switch to electricity.

It’s still a carbon tax, regardless of the euphemisms (“Cap and Invest” or “Affordable Heat Act”) that politicians invent.

Fighting Back Through Public Testimony.

In South Burlington, VT, the city council recently voted down a charter change that would have allowed the city to regulate what type of energy may be used in existing residential and commercial buildings. Here are comments from two people that testified:

Matt Cota (council member):
“I think the conflict is we’re creating a system in which people who aren’t directly involved in heating, who don’t have an understanding of heating, are making these decisions, and that’s a problem.”

Gerry Silverstein (citizen):
“What we do in South Burlington is not irrelevant, but it’s so miniscule as to be non-consequential in terms of global warming. So when you want to punish people for having installed heating systems over many decades in their house because all of a sudden you say we’ve got to reduce our carbon footprint from 10 million tons to zero when the rest of the world is still dumping out 35 to 50 billion tons of carbon dioxide, it’s nonsensical. It’s insulting and it’s degrading.”

What’s Happening with Propane Prices?

Prices have moved up about $.21 per gallon in the past 30 days. Three conditions that were present when we wrote last month’s blog (lowest price in 2 years; very low value to crude; and market moving into contango) which suggested “that we may be getting closer to a price bottom, at least in the near term” are trending the other way now.

Propane Price Chart

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Weekly Inventory Numbers

U.S. propane inventories showed a modest draw of 1.96 mmbbls. for the week ending January 13, 2023, largely matching industry expectations. This brings national inventory levels to 76.62 mmbbls., about 30 percent ahead of last year and 21 percent above the 5-year average.

PADD 2 (Midwest/Conway) inventories had a minimal draw of .39 mmbbls. They currently stand at 22.29 mmbbls., nearly 15 percent higher than ‚Äčlast year.

PADD 3 (Gulf Coast/Belvieu) inventories had a fairly bland draw of 1.53 mmbbls. They now stand at 43.72 mmbbls., roughly 60 percent above last year.

The Skinny

People should be “mad as hell” at politicians who want state control of energy choice and energy consumption.

We don’t need to accept rolling black-outs, or a grid that goes down due to a cyberattack, or a weather-related natural disaster with massive power outages because a state government forced its citizens to rely on electricity.

It doesn’t have to be this way.

A more sensible and responsible approach would be for states to support an “all-of-the-above” basket of low-carbon, renewable energy, and clean-energy solutions that would include propane.

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NOTE: The views and opinions expressed herein are solely those of the author, unless attributed to a third-party source, and do not necessarily reflect the views of Ray Energy Corp, its affiliates, or its employees. The information set forth herein has been obtained or derived from sources believed by the author to be reliable. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any buying decision and it has been provided to you solely for informational purposes.
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