About 47% of the propane consumed in the U.S. is used in the petrochemical industry. Propane is only one of many possible raw materials used by this industry to make plastics, etc. Therefore, because the petrochemical industry can switch to other commodities when the price of propane becomes too high, propane usage here tends to exhibit seasonal patte rns, rising during the summer _when its price is low and falling during the winter heating months (October-March) when its price is high. Petrochemical demand is also regional due to the high concentration of petrochemical plants in the Gulf Coast region.
Excluding propane gas grills, residential and commercial use accounts for 39% of all propane used in the United States. Of the 101.5 million households in the
U.S., 8.1 million depend on propane for one use or another. Because 57% of these households rely on propane for their primary heating fuel, this is highly seasonal usage. Propane is most commonly used to provide energy to areas not serviced by the natural gas distribution system. Thus, it competes mainly with heating oil for space heating purposes. Homeowners in the Midwest use it predominantly for heating, while Northeast residences rely on it more for cooking.
Farm use is the third largest retail propane market, accounting for about 8% of the total demand. Farm or agricultural uses of propane include crop drying, weed control, and fuel for farm equipment and irrigation pumps. The amount of propane used for crop drying, the largest component of farm use, is not only seasonal, but can vary from year to year depending on crop size and moisture content. Agricultural use of propane is primarily concentrated in the Midwest.
Industrial use of propane, the fourth largest propane consuming sector accounting for about 4%of U.S. consumption. Uses include space heating, soldering, cutting, heat treating, and fork lift fuel. Sixty percent of industrial applications for propane occur in the Midwest and are typically not seasonal.
While transportation represents the smallest sector to use propane, the largest alternative fuel in use today for transportation is propane.