Propane tank supplies are running out in the United States, with demand increasing 75% per year as the coronavirus pandemic spurs outdoor entertainment.
Hardware stores, gas stations, and big box retailers cannot keep portable steel tanks in stock. Scarcity is another way the pandemic has rocked energy markets, with depressed or reshaped demand for jet fuel, gasoline and electricity.
According to the Propane Education & Research Council, a group backed by sellers and producers of fossil fuel, demand for propane sold in retail-size cylinders is expected to reach about 500 million gallons this year, up from 284 million gallons in 2019. .
UGI, the owner of America’s largest propane retailer, said its AmeriGas cylinder exchange service reached record volumes during the fiscal year that ended in September. UGI ships tanks to 60,000 locations across the United States, including the Home Depot home improvement chain stores.
Mike Stivala, CEO of Suburban Propane Partners, said his company which sells fuel to stores that fill consumers’ propane cylinders has “benefited greatly from all the activities of outdoor living.”
Shares of UGI and suburban propane have fallen by more than 20% in New York this year, in part due to a hot 2019-20 winter that reduced demand for space heating. The Energy Information Administration predicts that total propane consumption in the United States will be 13 billion gallons in 2020, down 2.2% year-on-year.
While there is no shortage in wholesale commodity markets, retail customers have replenished their propane supplies at a breakneck pace.
Armando Reyes, owner of Carpenter Bros Hardware in Ann Arbor, Mich., Said his tank inventories now last two weeks instead of four, even after increasing his typical order from 90 tanks to 70. “The past four months have been a challenge, “he said.
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At a suburban New York City Home Depot, an employee wearing an orange apron searched in vain for a full tank when a reporter visited the store this week. “They are all empty,” he said.
Roger Perrault, Executive Vice President of IGU, recognized “the supply pinch points” and said AmeriGas had purchased new 20 lb steel tanks to meet demand. “We have invested a lot in additional bottles to bring to the market,” he said.
The use of propane has received support from local governments seeking to save small businesses facing a terrible winter pandemic. In Michigan – where Gov. Gretchen Whitmer last week suspended indoor dining, among other measures – the state government has offered at least $ 3 million to restaurants, bars and other businesses looking to buy portable heaters and other equipment to serve customers outdoors.
The Washington DC city government is offering grants of $ 6,000 each to restaurants that buy tents, lights, heaters and propane for the winter, Mayor Muriel Bowser’s office said.
At Strosniders Hardware in suburban Maryland, Washington, purchases of propane tanks tripled last month. The largest store sold 1,000 tanks, said Bill Hart, a partner.
“All the restaurants here use patio heaters,” he says. “There are probably 300 to 400 restaurants within a square mile radius of this store.”
Burning propane to generate heat that escapes into the sky raises concerns about unnecessary carbon emissions. Tucker Perkins, CEO of the Propane Education & Research Council, argued that propane heaters were more efficient than electric heaters powered by fossil fuels.
“I will never say that heating the outdoors is a positive thing for the climate,” he said.
“Except in this case, I will say, very broadly, it’s very positive for the restaurant, it’s very positive for the community, it’s very healthy, and because we are talking about such low volumes and such efficiency does not mean harming the environment. ”
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