Author

Pat Thornton

Pat Thornton is a 25-year veteran of the propane industry, with 20 years at Propane Resources and five years at Butane-Propane News. He has served on the Propane Education & Research Council (PERC) Safety & Training Advisory Committee and the Missouri PERC board of directors.

 

  • Feature Articles

    Brothers’ Action Plan Brings New Life to Family Business

    Brothers Chris, Mitch, and Mike Caywood grew up surrounded by the energy business in Hudson, Mich., a community about 90 miles west of Detroit and 10 miles north of the Ohio border. Locals have dubbed Hudson as “a small town with a big heart.” The brothers’ parents, Jim and Dolores Caywood, owned and operated retail gasoline stations, bulk fueloil distributorships, wholesale petroleum distribution businesses, and a propane business. These enterprises were built vertically and merged in the 1940s by their grandparents, Richard and Dorothy Varner. They, in turn, used a gasoline and fueloil operation launched by Richard’s brother on the site of an old blacksmith shop in the 1930s as a springboard for their operations. Ultimately, the merged businesses became Caywood Propane Gas Inc. Generally,...

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  • Feature Articles

    Kansas Association’s Milestone Anniversary

    Seventy-five years ago a group of Kansas LP-Gas dealers and associates formed an association to act as a “voice” for the industry in Kansas. It was 1942 and the LP-gas business at the time was considered depression-proof, reaching new highs in sales and opening new markets while many industries were making a slow recovery. The rapid growth caused many industry members to believe regulatory growth was needed as well. The initial association members came together because they wanted a “champion” in the writing of any regulations pertaining to their industry. Although growth of the association was slowed by the war years of 1942 to 1945, members would still meet on weekends at various locations, have dinner, and discuss the needs of their new industry. By...

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  • Feature Articles

    New Dynamics for Propane and Crude Will Likely Support Prices

    By mid-April 2017, many retail propane marketers were scratching their heads about why prices were steadily increasing. After all, a mild winter had wrapped up weeks earlier, crude oil had backed off during March 2017 when U.S. oil production continued to exceed expectations, and propane pulled back with it. As always, many waited and waited for further downside only to see prices take a turn back to the upside. The major players who put record-level investment dollars into crude oil after the OPEC cuts were agreed to in late November were not budging much as prices declined in March. The basic belief among major investors such as Goldman Sachs, Bank of America, Morgan Stanley, and Citibank was that the OPEC cuts were real. Asian demand...

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  • Feature Articles

    Autogas Sales Are Available to All Retail Propane Marketers

    Autogas is the term known around the world that denotes propane used to fuel motor vehicles. During the past five to 10 years, several innovative retail propane marketers have found a successful new profit center in selling propane for use by over-the-road fleets. There have been hurdles and challenges with propane-powered vehicles during the past 40 years, but those who faced challenges in the 1980s with propane-fueled vehicles owe new developments in propane autogas technology a fresh look. Today’s liquid injection systems and vastly improved vapor systems offer major improvements over earlier vapor systems. The new models allow better drivability in all temperatures, improved start up and emissions, and equal horsepower and torque to gasoline engines. Despite early challenges, propane has become the third most...

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  • Feature Articles

    Propane, Crude Oil Moving Toward World Supply/Demand Balance

    By early December 2016, primary U.S. propane stocks were just sliding below the 100-MMbbl mark. Mid-December, when the Energy Information Administration (EIA) released data for the week ended Dec. 9, the inventory level was at 95.6 MMbbl. In mid-January, after several weeks of sizable declines, EIA reported a 7.4-MMbbl draw that took inventory down to 72.2 MMbbl for the week ended Jan. 13. By the week ended Jan. 20, with another 4-MMbbl draw, the market stood at 68.2 MMbbl, a full 15.5 MMbbl below the same time last year. Several weeks of cold temperatures across much of the U.S.— combined with export levels around a million barrels per week — had taken their toll. While propane inventories were moving lower, traders were expecting world crude oil inventories to...

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  • Feature Articles

    Exports Become Wildest of Wild Cards Affecting Propane Prices

    By Pat Thornton … When domestic propane production began to increase in 2008, the United States started to rapidly become a net exporter of propane. As the capacity to export propane rose, we began to see exports reach new highs. By April of 2014, exports were going at a rate of 414,000 barrels per day and were up to 636,000 barrels per day by April 2015. The U.S. exported 886,000 barrels per day in February 2016, a new high that is more than eight times the export volume five years earlier, according to the Energy Information Administration (EIA). As 2016 has progressed, EIA has reported exports closer to 600,000 barrels per day through much of the spring and summer and more recently 424,000 barrels per...

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  • Feature Articles

    A Few Key Factors Could Ramp Propane Prices Up

    By Pat Thornton. . . As we entered March 2016, propane inventory levels were at 63 MMbbl in the U.S. It wasn’t that long ago when we were over 100 MMbbl, and then only a couple of months into 2016 and after a lackluster winter we were only 8 MMbbl ahead of the year prior. During the first week of March, the natural gas price reached an 18-year low at $1.57/MMBtu. But by the beginning of March propane price increases had surprised a few industry members who kept seeing crude oil in the low-$30/bbl range, and thought with so much crude oil supply and Iran adding to the glut crude would just keep holding everything, including propane, down. An uptick for propane prices while crude...

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  • Inventory Peaks, Price Declines Present Buying Opportunity for Propane Industry

    By Pat Thornton, Marty Lerum, and Jeff Thompson… As we move toward September, often the month when propane inventory levels peak before winter demand draws the volumes down, many are confident this could be a year where propane gets to 90 MMbbl. Such peaks in propane volume are also usually accompanied by dips in the price of the product as the laws of supply and demand play out. Looking back to 1971, we see six super inventory level peaks over the past 43 years, in addition to the September peak we are currently about to experience. Usually there is always a significant event that causes these super inventory level peaks. From 1976 to 1978, the Energy Information Administration (EIA) shows propane/propylene inventory levels reaching the...

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