Propane, butane exports jump By EPN Staff United States propane and butane exports both broke records last year, driven by Asian demand and increased U.S. natural gas production. Propane exports averaged 1.8 million barrels a day, the highest level since the EIA began collecting this data in 1973, according to the U.S. Energy Information Administration. Butane exports averaged nearly 500,000 barrels a day and have increased every year since 2006, according to the EIA. Why it matters Propane and Butane have similar chemical structures and uses, they’re both types of Liquefied Petroleum Gas (LPG), and they're both byproducts from processing natural gas and refining crude oil. Propane has a much lower boiling point, so it can stay liquid in lower temperatures, making it more useful for outdoor storage. Both are used for heating and cooking, but Chinese manufacturing demand drives propane exports because propane is a feedstock for plastics production. Butane can also be used as a feedstock for rubbers and plastics. Export markets have given both products a home as domestic production ramped up along with increased natural gas and crude oil processing, and recent expansion projects at Gulf Coast terminals have allowed for larger exports. The bigger picture Propane is used to make propylene, which can be used to make polypropylene, a versatile plastic used in car interiors, packaging and other items. Chinese demand has grown rapidly, according to the EIA, and the United States has typically been China’s No. 1 source for propane. Asia is also a top destination for U.S. butane, though there is also a strong market in African countries, particularly Morocco and Egypt. Some countries subsidize butane because it’s a cleaner indoor fuel for cooking and heating than wood or charcoal, the EIA reports. Additional context The LPG trade, and particularly propane exports to China, may be impacted by tariffs. In fact, U.S. propane exports to China dipped in 2018 due to retaliatory Chinese tariffs, then surged again in 2020 when those tariffs were waived. The Panama Canal is also a limiting factor, and delays there impact shipping worldwide. Sending propane through the Panama Canal from the U.S. Gulf Coast to East Asia takes about a month, according to the EIA, which is about two weeks less than rounding the Cape of Good Hope at the southern tip of Africa.
