Shale, Propane and Fleets


Sales of propane-powered vehicles are on the rise in the U.S., according to Bloomberg. The increase is especially noticeable among companies that operate fleet vehicles that would normally be powered by diesel.

“There’s a dramatic increase in the rate of adoption in fleets. It’s really the economic savings that people can achieve even compared to the lower gasoline prices,” said Jeff Stewart, the president of Santa Rosa, California-based Blue Star Gas.

A surge in liquid fuel inventories such as propane, butane and ethane is prompting the change. The excess fuel is a result of the continued shale boom. Propane prices are dropping and becoming an attractive fuel option even in the face of lower crude oil prices. Propane is now trading near a 13-year low and is 75% cheaper than diesel fuel.

“Right now we’re in a period where there are significant savings to propane in many applications,” said Michael Sloan, a principal at ICF International Inc., a Fairfax, Virginia consulting firm.

There are estimates that sales of propane-powered vehicles will reach 20,000 in 2015. This is a fraction of the anticipated 3 million fleet vehicles expected to be sold, but the number represents a 35% increase over last year’s sales. Small delivery companies and UPS are among those increasing their propane-powered fleets. (Source: Bloomberg)

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