Episode summary
Could Propane Help Power the AI Data Center Boom? | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 9 min · Hosts: Carol Massar, Tim Stenovec · Guests: Michael Stivala
Summary
Propane is being framed as a practical, distributed energy source at a time when the electric grid is under more pressure and data-center power demand is rising. Michael Stivala said Suburban Propane is seeing “insatiable” demand for propane and LPG because the fuel can provide resilient, on-demand power when grids are disrupted by wars, cyberattacks, natural disasters or other outages.
Stivala said the U.S. propane market is currently well supplied, with about 105 million barrels in inventory and production running at record levels above 3 million barrels a day. He said roughly 2 to 2.2 million barrels a day are being exported, and that propane remains cheap relative to crude oil, trading in the low 30% range versus its typical 55% to 60% relationship to crude.
The most pointed part of the conversation was data centers. Stivala said propane is already in the mix for smaller projects and that the “sweet spot” is roughly 1 to 10 megawatts, where companies can use behind-the-meter tanks and get power running in a matter of days. He described larger 18,000-gallon tanks as part of the setup, suggesting propane is emerging as a backup and supplemental power option for some AI-era infrastructure.
Key takeaways
- Stivala said U.S. propane supply is strong heading into winter, with about 105 million barrels in inventory and record production above 3 million barrels a day.
- He said propane prices have stayed resilient and are cheap versus crude, trading in the low 30% range instead of the usual 55% to 60%.
- Stivala said data centers are creating new demand for propane, especially for behind-the-meter backup and distributed power.
- He put propane’s sweet spot for data-center use at roughly 1 to 10 megawatts, where deployment can happen in days.
- He said propane and LPG are gaining attention globally because they can support resilient, affordable, and sustainable energy when grids are vulnerable.
Notable quotes
“we're seeing demand uh for for data centers. It it is a it it's definitely something that uh we're we're starting to partner with”
“we can set a tank and deliver to that tank and and be up and running with power in a matter of you know uh a couple of days”
“We have about 105 million barrels in inventory in the United States”
“propane has really remained very resilient throughout uh uh that when typically when you when you look at the value of propane to crude oil”
How the episode opens
Bloomberg Audio Studios podcasts, radio news. — You're listening to Bloomberg Business Week with Carol Masser and Tim Stenc on Bloomberg Radio.
I want to talk energy. Um, we spent a lot of time talking about commodities today. Uh, certain metals.
Uh, we talked oil earlier. I want to talk about something that's a byproduct, uh, propane. And to do that, we've got back with us Michael Stavala, the president and CEO of Suburban Propane.
The company uh sells retail propane. It sells it commercially as well uh for industrial uses, agricultural uses, and more. Michael's uh been on the program in the past.
Michael, good to have you back with us on Bloomberg Business Week Daily. You know, you go back and you look at uh the a couple of different tickers here on the Bloomberg terminal that that track the price of of propane. It's actually one of the commodities this year that that is not up as much as others.
I mean, you look at, you know, the price of oil and the way that oil has gone up this year. Propane up only about 10.7% so far this year. I just want to start with your outlook on on the way that you think that this this fuel the price is going to change uh in the next couple of months, if at all.
Sure. Well, first uh thanks for having me back. It's great to be on again. you know, uh the the pricing structure is really going to be dependent on supply demand uh as as normal uh indicators would would would say. Right now, we're sitting with significant amounts of propane in inventory and storage heading into our peak winter heating season. We have about 105 million barrels in inventory in the United States.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai data centers
- propane power
- distributed energy
- electric grid capacity
- energy demand
Companies and tickers mentioned
- Suburban Propane
Watch the episode
Watch “Could Propane Help Power the AI Data Center Boom? | Bloomberg Businessweek” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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