Propane is a hydrocarbon that is a gas at atmospheric pressure, although it can be compressed under moderate pressure into a transportable liquid. It is co-produced with oil and gas, either as a product of petroleum refining or natural gas processing. Propane is used for home heating, cooking, water heating, drying crops, and transportation fuel.
Approximately 5% of households in Colorado use propane for winter heating, the majority of which are rural. Despite significant propane production in Colorado, the state is vulnerable to shortfalls due to a lack of pipeline and storage infrastructure. The nearest major storage facilities are in Conway, Kansas and Mont Belvieu, Texas. To obtain fuel from these storage facilities, Coloradans rely mainly on trucking.
Propane can also be used in vehicles as a transportation fuel, reducing both emissions and the cost of fueling. Colorado has an excellent business climate for propane as an alternative fuel, including tax credits and grants for vehicles as well as grants for propane fueling stations co-located with CNG stations through the ALT Fuels Colorado program. See Refuel Colorado for more information.
To address vulnerabilities in the propane sector, the Colorado Energy Office joined the U.S. Department of Energy State Heating and Oil Propane Program (SHOPP). Through this initiative, CEO converses with propane marketers weekly between October and March to ascertain price or supply concerns. Consumers can monitor average propane prices during winter months below. In addition, CEO collaborated with the Colorado School of Mines to develop a dynamic long-term price forecasting model.