Dislocations in the US Propane Market and the Jones Act

The US has become the largest producer and exporter of propane. Despite this growth, some parts of the US are still importing the heating and cooking fuel. This dislocation is caused by the Jones Act, a federal law passed in 1920 requiring goods shipped between US ports to be transported on US-built ships and operated by US crews.   Over the past 10 years, US production of propane and other natural gas liquids (NGLs), such as ethane and butane, has surged, making the US the world’s largest producer of NGLs. Without a concurrent increase in domestic demand, the US has seen a marked increase in exports, becoming the world’s largest exporter of propane. Propane, along with butane, is referred to as liquefied petroleum gas (LPG), and these hydrocarbons are transported on LPG tankers.       Despite the growth in US exports, some parts of the US are still importing propane. Without any Jones Act-compliant tankers to carry LPG (or LNG for that matter), the only option for Hawaii and Puerto Rico and others is to look abroad. This is also the case for areas without pipeline or rail capacity to deliver the fuel to local markets, such as in… continue reading

Continue reading Dislocations in the US Propane Market and the Jones Act. This article appeared first on CTRM Center.

Source: CTRM Center

Related Posts

Leave a reply