This industry classification includes establishments involved in manufacturing and/or distributing manufactured gas, liquefied petroleum gas (LPG), or mixtures of manufactured gas with natural gas. Examples include blue gas, coke oven gas, manufactured gas, synthetic natural gas from naphtha, and liquefied petroleum gas distributed through mains. Establishments involved in the sale of liquefied petroleum gas in steel containers are classified as SIC 5984: Liquefied Petroleum Gas (Bottled Gas) Dealers.
Natural Gas Distribution
Manufactured gas, liquefied petroleum products (LPG), and gas mixtures play an important role in specific industrial applications and in places beyond the reach of natural gas pipelines. Some of the most widely used manufactured or liquefied petroleum gases include coke oven gas, water gas, naphtha gas, acetylene, propane, and butane. Coke oven gas and water gas are both derived from coal. To make coke oven gas, vapors are collected from heated coal and then purified. Water gas is produced by forcing steam through hot coal or coke. Naphtha gas is made from crude petroleum. Acetylene can be made from water and calcium carbide or by breaking apart methane molecules. Propane and butane are both natural gas liquids. They are typically separated from methane during natural gas processing.
Demand for propane, one of the most commonly used LPGs, is highly cyclical. Used primarily as heating fuel, propane volumes increase and decrease dramatically during the winter and summer months, respectively. In the mid-2000s the United States produced 90 percent of its propane domestically, with the remainder imported primarily from Canada and Mexico. Low supply levels at the beginning of the winter of 2004-05 as well as the high cost of oil caused prices of propane to rise. Use of propane is expected to increase gradually, at the rate of about 1 percent annually, compared to a projected growth rate of about 1.5 percent annually for natural gas.
The petroleum feedstock industry is largely dependent on the overall petroleum industry, which resulted in high oil prices and increasing demand driving prices higher in the mid-2000s. The United States depended heavily on Asian imports of numerous manufactured gases to meet demand. In addition, a short supply of coke was adversely affecting the steel industry in the mid-2000s.
Although the ability to produce manufactured gas from coal dates back to the early years of the 1600s, the technology to use it commercially did not develop until the closing years of...