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US Propane Consumption for Winter 2022-23 Lowest Since 2010

As we explained a few weeks ago, balancing supply and demand in the propane market is challenging (see Crude & NatGas Drilling Slowing, Which Affects Propane Supplies). The problem/issue with propane (or ethane, or butane, really any NGL) is that propane and other NGLs are derivatives of oil and gas drilling. Nobody sinks a hole in the ground explicitly trying to extract propane. It comes out of the ground along with oil and natural gas. To accurately guess the coming supply of propane, one has to monitor whether oil and gas drilling is going up or down. And then there’s the demand side…
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Crude & NatGas Drilling Slowing, Which Affects Propane Supplies

Commodities like oil and natural gas are just about the purest form of free market capitalism on the planet. They are textbook supply-and-demand commodities. When supply goes up or down, given the same demand, the price for the commodity will go up or down inversely. It doesn’t take long for the markets to “balance.” The same on the demand side. If demand goes up or down and supply stays the same, the price will go up or down. But what about propane? The propane market is different and much harder to predict.
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PA & TX Congressmen Tour Philly’s Marcus Hook NGL Facility

Marcus Hook complex (click for larger version)

U.S. Congressman Dan Meuser (PA-09) joined Congressman Troy Nehls (TX-22) for a roundtable discussion and tour of Energy Transfer’s Marcus Hook facility near Philadelphia last week. Marcus Hook is where the mighty Mariner East pipeline system terminates. Mariner East flows natural gas liquids (NGLs), including ethane, propane, and butane, to the Marcus Hook refinery, where a fractionator separates them into their respective hydrocarbon streams. The various NGLs are then (mostly) loaded onto ships and exported. The entire system–the pipeline and the refinery–is a marvel. Meuser and Nehls were there to learn more about it.
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WVU Researcher Looks for Way to Convert Shale Ethane to Olefins

Madelyn Ball, WVU researcher

Natural gas is a booming industry in West Virginia and the United States, accounting for more than 38% of the nation’s total energy consumption. One West Virginia University researcher is hoping to capitalize on valuable untapped chemicals that come from shale gas, commonly found throughout the Marcellus/Utica region. Madelyn Ball, an assistant professor of chemical and biomedical engineering at WVU’s Statler College of Engineering and Mineral Resources, received $110,000 in funding from the American Chemical Society to conduct research that will convert ethane and propane from shale gas into olefins, a class of chemicals made up of hydrogen and carbon such as ethylene and propylene, that can be used in the production of plastics and other complex chemicals.
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$150M Manufacturing Plant Coming to WV, Cites M-U NGLs as Reason

Some exciting news out of West Virginia to share. During last evening’s State of the State address, WV Gov. Jim Justice announced TCL Specialties, a subsidiary of TCL (Thirumalai Chemicals Limited), which is based in India, will break ground this month for two manufacturing facilities in Marshall County, West Virginia. The company will invest $150 million to build the first (of three) phases, manufacturing chemicals and food ingredients. And guess what most of the feedstock (raw inputs) will be for these new plants? NGLs (natural gas liquids) from the Marcellus/Utica.
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Revolution Cryogenic Plant Partially Restarts Following Explosion

Residents living in the vicinity of Energy Transfer’s Revolution Pipeline cryogenic plant in Bulger (Washington County), PA, got a nasty “present” on Christmas morning. Around 7:30 am, residents report hearing an explosion, followed by a fire, at the plant used to separate NGLs (natural gas liquids, including ethane, propane, and butane) from the raw gas stream that flows through the Revolution gathering pipeline (see ET Revolution Cryogenic Processing Plant Explodes in PA on Xmas). The good news is that the plant has resumed “partial operations.”
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How New Shell Cracker Affects Ethane/NGL Markets in Northeast

Here in the real world (not the pretend world of leftist radicals who seek to shut down all fossil energy), the Shell ethane cracker finally went online, officially, last week (see Shell Officially Launches Pa. Cracker Plant Using M-U Ethane). The plant will use some 95,000 barrels of ethane per day when it is at 100% capacity–likely next year. So how is the new Shell cracker affecting the NGL markets in the northeast and beyond?
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Shocker: Pittsburgh Post-Gazette Tells Mike Bloomberg to “Butt Out”

Butt Out, Mr. Bloomberg!

Every now and again, the editorial board at the Pittsburgh Post-Gazette, a far-left-leaning newspaper, surprises us. Yesterday’s editorial is one such day. We brought you the news yesterday that the uber-arrogant billionaire Mike Bloomberg is spending $85 million to try and shut down or block petrochemical plants like the Shell ethane cracker in the Pittsburgh region (see Mike Bloomberg Spends $85M to Stop Petchem Plants in M-U, Gulf Coast). Bloomberg’s efforts don’t sit well with the Post-Gazette editors, who are telling Bloomberg to “butt out” of interfering with petrochemicals in the Ohio Valley.
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Primer on Propane and Its Relationship to Crude Oil & Natural Gas

From time to time, we write about propane–the “other” NGL produced in the Marcellus/Utica “wet gas” region. When M-U drillers sink a well, methane is the number one hydrocarbon that comes out of the hole. But in certain areas in southwestern PA, eastern OH, and the northern panhandle of WV, other hydrocarbons come out of the hole along with methane. Being heavier than methane, they are referred to as natural gas liquids (NGLs). The primary NGL produced in the M-U region is ethane. Ergo Shell has built a $6 billion-plus cracker plant to leverage our region’s abundance of ethane. After ethane, the next most plentiful NGL is propane.
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Propane Industry Fights Back Against Radicals in New York

Bill Overbaugh, executive director of the New York Propane Gas Association

The propane industry in New York State is in a fight for its life. New York State’s so-called Climate Act (passed in 2019) requires New York to reduce greenhouse gas emissions 40% by 2030, and no less than 85% by 2050, from 1990 levels. So far, the Climate Action Council (CAC), which is tasked with developing a framework for implementing these impossible goals, has proposed outright bans on fossil fuels in favor of electrification. Just two of the 22-member committee represent the fossil fuel industry (which passes for fair and balanced in NY). The New York Propane Gas Association (NYPGA) is fighting back against the crazies who demand an end to the use of propane in the state. Learn how the NYPGA is responding, below.
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Mariner East & Marcus Hook Hit Record High M-U NGL Exports in 2Q

Earlier this week, Energy Transfer (ET), the builder of the mighty Mariner East pipelines and owner/expander of the Marcus Hook refinery, issued its second quarter update. The company had plenty of positive news to report, including net income of $1.33 billion, a $700 million increase from the same period last year. In July, the company hit a new record high for the amount of NGLs flowing through the Mariner East pipeline system. It has also found a way to squeeze another roughly 10,000 barrels per day of NGL exports out of Marcus Hook.
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Antero Resources 2nd Largest LNG Exporter, $765M Profit in 2Q

Antero Resources, one of the largest drillers in the Marcellus/Utica (with major assets in West Virginia), the fifth largest natgas producer in the country and the second largest LNG exporter, issued its second quarter 2022 update yesterday. During 2Q, Antero placed a new compressor station online in West Virginia, boosting Marcellus gas flows by 160 MMcf/d (million cubic feet per day). The new Castle Peak compressor station will be expanded to 240 MMcf/d in 2023. Antero generated $664 million in free cash flow and $765 million in net income during 2Q. Big company. Important company.
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FERC Aggressively Expands Enforcement, Fines Utica NGL Pipe $30K

God help you if you are a midstream company that has to wade through the mountain of federal regulations and codes generated by agencies including the Federal Energy Regulatory Commission (FERC), and are subject to those agencies’ arbitrary decisions on what they will and won’t enforce. In what amounts to a game of Simon Says, FERC has just fined M3 Ohio Gathering, Utica East Ohio Midstream, and UEOM NGL Pipelines–all three either current or former owners of two tiny NGL pipelines that flow propane and ethane from the Scio (Ohio) fractionation plant–$30,000 for not filling out a particular form over a six-year period. Thirty grand for a paperwork violation. It is, according to lawyers who watch these things, an escalation, an “aggressive expansion of enforcement” on the part of FERC.
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Clean Air Council Claims Victory in Marcus Hook Air Permit Case

The radicals of the Clean Air Council (CAC) are claiming a (very small) victory in their campaign against processing NGLs at the Marcus Hook refinery located near Philadelphia. CAC is CACkling that they have forced Energy Transfer, builder of the mighty Mariner East (ME) pipeline system (a pipeline that CAC couldn’t stop), to back down on how permits are issued for the Marcus Hook facility–the place where NGLs from ME end up for processing and loading for export. The end result is…well…not much. Nothing will really change. The same volume of NGLs will still flow to Marcus Hook, and the same volume of NGLs will be loaded onto ships and exported to other countries. The only thing that changes is that ET spends more time and pays more money to obtain a single large permit instead of two separate, smaller permits. We’ll explain.
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Without Fossil Fuels, Half the World’s Population Will Starve

Vaclav Smil is a Distinguished Professor Emeritus at the University of Manitoba. Smil is the author of over forty books on topics including energy, environmental and population change, food production and nutrition, technical innovation, risk assessment, and public policy. His newest book, titled How the World Really Works, contains some startling information. Modern societies would be impossible without mass-scale production of many man-made materials. Four materials rank highest on the scale of necessity, forming what Smil calls the four pillars of modern civilization: cement, steel, plastics, and ammonia. All four require fossil fuels or the don’t exist.
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M-U Industry Asks Feds to Use M-U Butane to Stretch Gasoline

Butane formula

The leaders of the Marcellus Shale Coalition, Kentucky Gas and Oil Association (KGOA), Gas and Oil Association of West Virginia (GO-WV) wrote a letter to Washington, D.C. last week encouraging the federal government (i.e. Joe Biden) to allow butane blending with gasoline as a great way to lower prices at the pump. But the groups didn’t send the letter to Joe Biden, knowing it would get filed in the circular file next to Biden’s desk. Instead, they sent the letter to another Joe–U.S. Senator Joe Manchin from West Virginia. Manchin, chairman of the powerful Senate Energy and Natural Resources Committee, has the attention of the Bidenistas since he torpedoed the administration’s Build Back Worse plan last December. If Joe Manchin talks about something, Joe Biden pays attention (if he isn’t napping).
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