Spring Growth & Spring Cleaning

New Propane Supply Season.

Spring is a time for new growth. It’s also the time when we come out with our new propane supply plans.

Weather may change every year, but what hasn’t changed is our diversified portfolio of midstream supply assets and team of experienced industry leaders to provide you with an extremely reliable supply of propane.

We’re excited to talk with you soon about this year’s propane supply programs and pricing strategies. Above all, you may be assured that all of us at Ray Energy are looking forward to taking great care of your upcoming propane requirements! 

Climate Action Bills.

With the hundreds of climate bills that are showing up everywhere like dust bunnies, maybe now is also a good time for spring cleaning?

After all, most people don’t want higher fuel costs (VT Senate Bill # 5). And many people don’t want an all-electric home (NJ Executive Order # 316). And who would want a “home energy label” (CT Senate Bill # 979) that would devalue their home if they don’t switch to all-electric?

Some of the proposed policies are so complex that legislators can’t even explain how the bills would actually work. But if they can’t explain the bills to their constituents, how can they vote for them? Do they vote for them because they believe that global warming is an imminent and existential threat to humankind?

But that ignores the fact that their actions are largely inconsequential in terms of reducing global emissions.

Barking Up the Wrong Tree.

Why do I say that?

Well, let’s take Vermont, for example. Vermont’s share of greenhouse gas emissions is about 8 million metric tons versus 34 billion global metric tons. That’s roughly only 1 part to every 4,250 parts! So Vermont’s GHG emissions are already extremely low in terms of the global picture.

Nonetheless, Vermont SB # 5 passed a few weeks ago by one vote. If it becomes law, it will essentially force propane companies to start charging their customers nearly $1.00 per gallon more to “encourage” them to switch to electricity.

(Does this give kale lobbyists any ideas in terms of “encouraging” a vegetarian diet?)

Let’s forget, for a moment, the legal aspect of a bill that would punish consumers and restrict their choice of energy. Even if you really think that electricity is the only cure for global warming, and money is no object, the speed with which folks are pushing to electrify everything is outpacing the ability of the infrastructure, with all of its disparate but interconnected parts, to keep up.

That’s a recipe for disaster.

Follow the Money.

And who benefits from this? I’m not talking about the hard-working electricians. They are already in short supply and more than busy. But maybe it’s time that people start asking, “Who are the companies and the investors that will benefit the most from forced electrification?”

It’s not the average homeowner. Why? Because the cost to install heat pumps and upgrade the electrical service for an average home so that it can support the higher amp capacity required to service all electric appliances and vehicle charging, is approximately $8,000 to $16,000.

That does not include the cost of new electric appliances such as a stove, dryer, and hot water heater, or an EV or two.

Some Good News.

I wouldn’t say that the tide is turning, but there is some good legislative news.

The Propane Gas Association of New England (PGANE) recently reported that Rhode Island’s All Electric Buildings Bill (H5600) was “Held for Further Study” until next session. That’s encouraging.

And Maine introduced an Energy Choice Bill (LD 894). It’s similar to New Hampshire’s Freedom of Energy Choice law (SB86) which, along with 20 other states, prevents municipalities from prohibiting or restricting heating and energy system choice.

What’s Happening with Propane Prices?

Similar to the last month’s price direction, Belvieu propane prices started the month "in like a lion" moving higher (near $.90 per gallon), but have since dropped towards the mid $.70 per gallon range. The last time we had a lower monthly average than the current market was 12/22 ($.6935/gal.) and 12/20 ($.6457/gal.).

Propane Price Chart

Weekly Inventory Numbers

Largely due to builds on the East Coast and Gulf Coast, U.S. propane inventories showed a surprising contra-seasonal build of .92 mmbbls. for the week ending March 10, 2023. The build was greater than any of the estimates from industry experts. This brings national inventory levels to 60.97 mmbbls., about 83 percent ahead of last year and 42 percent above the 5-year average.

PADD 2 (Midwest/Conway) inventories had a negligible draw of .37 mmbbls. They currently stand at 13.50 mmbbls., nearly 53 percent higher than ​last year.

PADD 3 (Gulf Coast/Belvieu) inventories had a build of .48 mmbbls. They now stand at 38.39 mmbbls., roughly 100 percent above last year.

The Skinny

Spring is a time for new growth with Ray Energy and we’re excited to talk with you soon about our 2023/2024 propane supply plans.

As for the climate bills that are showing up everywhere, it may be time for a broom and some spring cleaning. Some states need a clean start. They should tear down the timeline goalposts, or push them out, and adopt a more holistic approach towards reducing GHG emissions:

• Encourage conservation.

• Promote greater efficiencies.

• Support a diversified basket of renewable and low-carbon energy choices that are versatile, affordable and reliable, like propane.

That’s the most realistic and responsible path forward.

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