You know the saying, popularized by Mark Twain, “there are lies, damn lies and statistics?”
That was my first thought when I was going over the US Energy Information Association’s liquefied petroleum gas export data — largely propane — for 2014, which was released February 27.
Apparently Panama was the third most popular destination for US LPG exports, taking in 13.379 million barrels in 2014, behind only Mexico at 24.076 million barrels and Brazil at 18.159 million barrels.
That’s 36,655 b/d and 3.46 barrels per person in the country. That’s exponential growth—up from 1.328 million barrels in 2012 and 5.673 million barrels in 2013.
To count as an export destination the barrels actually have to be discharged in that country. So that means barrels passing through on a ship through the Panama Canal don’t count.
So how do you explain this massive amount of LPG being taken to Panama and unloaded there?
Is the US government lying to us all?
Is Panama stockpiling a bunch of flammable explosive gases in a top secret weapons project?
Did Hank Hill open up a Strickland Propane in Panama City where he could offer the people of Panama a wide array of propane and propane accessories?
In this case, it isn’t the motion of the ocean but the size of the ship.
Shipping sources said most of the LPG classified as going to Panama passes through the Panama Canal on what are called “skinny” VLGC (very large gas carriers) ships. The 75,000 cubic meter (42kt) size of these ships is just narrow enough to fit through the canal, unlike traditional size VLGCs, which are as big as 84,000 cm.
Normal Panamax vessels cannot handle LPG as LPG needs pressure and refrigeration.
There are about four “skinny” VLGCs that can fit through the Panama Canal and carry LPG. The LPG is then unloaded and put on the larger VLGCs that are waiting in the Pacific Ocean outside the canal.
From there, the traditional VLGCs go onto either Asia or the Pacific Coast of South America. The skinnier VLGCs then go back empty to make another run from the US Gulf Coast.
Even though the larger VLGCs are not completely full, traders will gladly pay the dead freight, one broker said.
Sometimes, the traditional VLGCs are used as floating storage.
Either way, they most certainly are not winding up in Panama.
Julie Harris, LPG analyst for the EIA, said she does not know about how the export data was determined as that is the responsibility of the US Census Bureau, though she has heard the same thing regarding LPG exports and the Panama Canal.
One LPG broker said only about 1% of the LPG heading to Panama actually gets consumed there.
So the EIA data vastly overstates the exports to Panama and understates the exports to Asia.
It’s like saying your vacation destination is Atlanta when you are really just changing planes there.
In the words of Henry Clay, “statistics are no substitute for judgment.”
