00:00So bring us up to speed on the propane market, specifically the propane that you sell,
00:05where it comes from, how it's processed, and then also what you've seen when it comes to pricing
00:08since the war began. Great. Thanks for having me. First of all, Suburban Propane, we're a domestic
00:16retailer of propane. And so we source about 99% of our propane right here in the good old United
00:23States of America. We're flush with propane right now. Inventory levels in the country are up above
00:3178 million barrels, which is about two-thirds higher than the five-year average for this time
00:39of year. And as you know, we're sort of coming out of the heating season, which is the peak
00:45demand period for domestic propane use. And so we're in a really, really good position
00:51with propane. Propane is a byproduct of crude oil refining and natural gas processing. So
01:00we do retain a good bit of it here. We're actually producing record levels. We're almost at 3 million
01:08barrels a day now, and exports are hovering around 2 to 2.2 million barrels a day. So we have
01:17plenty
01:17of propane here in the United States. So the propane that you sell, is it typically more so
01:24used here in the United States, more so used for cooling, let's say, than it is for cooking. So a
01:28real cyclical nature to the business. Mostly for heating, right? Heating in the peak heating season.
01:3655 million households rely on propane in some way for heating, home heating, hot water, cooking,
01:44drying, clothes drying, so forth. So yes, it's a large weather-driven component.
01:53All right. So yeah. So when I, you know, I was thinking about your business and, you know,
01:57Michael, you guys have been around for 30 years. You're at the New York Stock Exchange. You rang
02:01the bell yesterday. And so you've seen a lot of different market cycles. How much does your business
02:07really change? Or is it just so, is it mostly closely tied to weather? Or does economic cycles
02:14also play into it? It's a bit of both. You know, about 50% of our business is residential. And
02:21most
02:21of that is heat-related demand. But even with that, obviously, economic factors do affect how the
02:29consumer thinks about their own budgets and where they spend their money. So in challenging times,
02:36you can see some conservation kick in. But the other 50% of our businesses is providing energy to
02:44commercial businesses, industrial uses, government uses, agricultural uses. And, you know, frankly,
02:52because of the resilience of propane and the portability and the reliability, we're starting
03:01to find even more respect and more uses for propane in areas that people probably didn't imagine a few
03:08years ago. Things like EV charging stations and even small-scale power generation for data centers.
03:16Wow.
03:17You know, these are areas where the portability and the ability to stand up a propane storage
03:24and deliver to that storage, wherever the demand is, is a real advantage that we have.
03:31So are you saying in some cases there are EV charging stations that are off the grid and
03:35instead powered by propane? Or is that a backup power source?
03:39No, that's the prime power for some of those off-grid charging stations. There's a generator
03:45behind the scenes that's powered by propane.
03:48So interesting. I was having a conversation with someone in the newsroom earlier about EVs,
03:51and he's like, he was basically like, you're just, you know, using carbon from a different
03:55source when you're using EVs.
03:56Well, yes. Well, you've got to charge it. You've got to charge his batteries. Like,
04:00yeah, which is why you think about not a perfect solution. Hey, Mike, one thing I do wonder,
04:05as you say that there are new uses coming, and I find that interesting, small power for data centers.
04:10When we've talked about the power grab that's going on, a lot of it fueled by the data center
04:16growth that we are seeing. We've talked about higher energy costs overall. Does that ultimately
04:24lead to more people using propane or more businesses using propane? I'm just curious,
04:29because we've said all hands on deck when it comes to energy sources, whether it's nuclear,
04:34solar, wind, of course, carbon, like, it's all going to be needed. So I wonder what's where does
04:40propane fit in potentially? Yeah, we have the same philosophy. We are all about all the above
04:48energy sources to meet the increasing demands that are faced by, you know, everything power,
04:56whether it's data centers, whether it's expansion of EV charging, you know, EV penetration,
05:03electrification, all that is still going to need energy in some form. And propane has
05:09a real role to play. And it happens to be one of the cleanest sources of fossil-based energy,
05:18because it's a byproduct of refining and processing. So you're going to have it whether
05:22bad carbons are taken out. Well, how careful do you have to be? I was telling Tim, I sail and,
05:29you know, we've used propane on a boat, but you have to have the tanks above decks in the cockpit.
05:34You
05:35don't want the propane. It's a heavy gas, if you will. And you don't want that going to the builds,
05:40right? Because you can blow up your boat. So there are risks. So how do those, that's extreme
05:45risk. But we've been, you know, you never put the propane down below. So I'm just wondering,
05:51does that limit how you guys can use it or no? Because you have the tanks outside and
05:56you can kind of put it anywhere. Yeah. I mean, first of all, we don't like to talk about things
06:02blowing up, but... Hey, I don't either. All I know is my husband, we're pretty stern with anybody,
06:09like with the propane tanks. But actually, if you think about all the uses, and what's
06:15unfortunate is propane is not well understood. And it's really our job to do a better job of advocating
06:20for propane in so many versatile uses in so many settings. So it really is an energy source that
06:30a lot of people touch and are accustomed to utilizing. It is very safe. The scenario that
06:39you're talking about, the tanks, as long as nothing's leaking and they don't find an ignition
06:45source, then they're safe. Generally, we don't necessarily advocate for utilizing the tanks
06:54indoors. But, you know, the reality is the appliances that are running on propane are indoors
07:01as well. So, you know, safety is our highest priority.
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