Slide 18 of 24
Notes:
So where do we get our supplies of propane? Well, propane comes from both gas plants and refineries. Here we see data through May which shows that production at both gas plants and refineries are back to more typical levels, following a decline in late 2000 and early 2001.
When natural gas prices were very high at the end of last year and earlier this year, the incentive was to not strip the propane out of the natural gas stream, instead keeping these Btus in the natural gas. Thus, propane production from gas plants fell sharply.
At the refinery, the story is a little different. When refineries produce gasoline, propane is the byproduct. Thus, as we saw last year and this year, propane production from refineries increase in the Spring, when gasoline production is high.
