Commentary: Lower LPG-by-rail volumes lead to lower leases
LPG-by-rail shipment data from the Department of Energy shows just how much propane and butane rail volumes fell through 2020. The decline has its roots in a shift of shipments from rail to pipeline as Energy Transfer Partners’ Mariner East 2 (ME2) natural gas liquids pipeline came online and demand destruction tied to the global pandemic. ME2 is a 275,000 b/d pipeline connecting the Marcellus Shale region with an export dock at Marcus Hook, Pennsylvania. Consequently, pressure tank car lease rates fell sharply in 2020, dropping to half of where they stood in 2019.
Contributor: PLG Sr. Consultant, 30-year veteran business journalist and founder of analytics firm that tracks rail car leasing rates, Clifton Linton.