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This research is based off Tank Utility’s proprietary data. It’s the result of viewing our anonymized aggregated daily readings from our propane tank monitors across the country.
Part 1 in our research can be found here.
Last week saw many states order non-essential businesses to close. This put significant strain on businesses throughout America and resulted in record weekly unemployment figures.
As an essential service, there is a question on how this will affect gallons delivered by propane marketers especially with many commercial accounts currently closed. Will residential accounts, who now are spending more time at home, make up for these gallons?
This is our current look at the virus’ impact on overall Delivered Gallons to date.
Our Research (week ending March 27)
Last week we reported our nationally aggregated propane consumption data was 19% lower than the same week in 2019. While grim, it was too early to conclude this a COVID-19 effect because temperatures 26% warmer than last year were also pulling down propane demand.
Bucking the trend from last week, this week’s propane consumption broke from its decline and equaled demand from this time last year. We’ll say that again. In the current environment of a National Emergency with 90% of Americans are in lockdown, propane consumption remains identical to usage at this time last year.
Weather may have helped slightly as we received a late spring cold front with 5% colder weather than the same week last year. However, it’s hard to imagine 5% colder temperatures would be enough to offset decreased commercial demand.
So what is causing propane demand to remain even with last year? Again, still too early to tell but there is one interesting trend – an urban exodus.
As more and more cities issue shelter-in-place ordinances, city dwellers with either existing or newfound telecommuting flexibility are fleeing cities. We’ve heard this anecdotally from our supplier partners serving resort communities like Poconos, PA, Cape Cod, MA, and Long Island, NY. A recent Washington post article covered this phenomenon as well noting the exodus was so great that, “police checkpoints were keeping outsiders from entering the Florida Keys, and several coastal islands closed bridges to try to keep the coronavirus at bay.”
With many of these resort communities residing beyond natural gas territory, this temporary migration to what I affectionately call “propane country” could be offsetting the likely decrease in commercial propane consumption.
With heat load dwindling over the next handful of weeks we will better understand how the pandemic is affecting our industry and we’ll continue to provide updates with a weekly review of these statistics.
Please note: The results shown are on an aggregate basis for monitors across the U.S. and fuel delivery companies can experience different deviations depending on their customer mix and geography.