Putting pen to paper on propane topics in Portland

Propane and the Pacific Northwest went hand-in-hand in October when the National Propane Gas Association (NPGA) and the Propane Education & Research Council (PERC) held back-to-back meetings in Portland, Ore.

The industry can cover a lot of ground in five days and offer a wealth of material for an editor’s notebook. Propane leaders must now take this information back to their companies, states and organizations and put it to use for the benefit of the industry.

As Tucker Perkins, chief business development officer at PERC, noted during one of his presentations: “From attention, we need action.”

Sorting through my endless pages of notes, I can tell you:

■ Propane-fueled commercial lawn mowers continue to be a hot topic. 

The industry has partnered with 18 OEM mower and engine manufacturers to help grow this market, complemented with purchase incentive and dealer demo programs.

Even with these partnerships, propane owns only 1 percent of the OEM mower market; about 180,000 total commercial units are sold each year, says Jeremy Wishart, senior programs manager at PERC. Another factoid: A recent Wall Street Journal article noted about 10,000 propane mowers are in use today.

“We have an opportunity to surround it, put our arms around it and make it ours,” says PERC President Roy Willis of the mower market. “I will not be satisfied with 3 percent [market share] in the next two to three years. I would like to get 3 percent next year and double that the following year.”

The aftermarket for mowers is another growth opportunity but also a challenge; only two companies offer EPA- and CARB-certified conversion kits, and PERC hopes to increase that number.

■ The residential and commercial markets have not been forgotten.

A group that calls itself the Residential and Commercial Growth Coalition was formed in April 2012 with the goal of jump-starting these key markets. Combined, they make up about 70 percent of industry gallons. The group’s motto: There’s no reason for an all-electric home in this country.

Discussion among about 20 meeting attendees in Portland centered on marketer mindsets, the importance of selling and servicing propane-fueled appliances, and training the younger generation of decision makers so it will consider the benefits of propane over electric.

“We have to go back to the basics,” says Dayne Brady of Tarantin Industries. “We’ve become so focused on being efficient that we forgot how to market propane.”

PERC is also putting a greater emphasis on the commercial market, including the restaurant, hospitality, education and retail segments.

■ The industry is taking notice of record-setting propane exports – a daily average of about 250,000 barrels, reports Ron Gist of IHS – and wondering what impact they are having on businesses.

This high level of exports is causing some concern in the industry. Some in Portland wondered whether NPGA should play a role in gathering information on exports as well as providing supply and demand projections for the industry – the idea being that any additional insight on supply and pricing factors will help marketers with business decisions.

Export policy has been a “front-and-center issue,” says NPGA President Rick Roldan, and some meeting attendees even wondered whether the industry should work to curtail propane exports.

Back to Gist’s report to the (newly named) NPGA Propane Supply and Logistics Committee in Portland: Propane production from gas plants is also at record levels – about 800,000 barrels per day. So while propane is leaving our borders at record rates, domestic production continues to run strong.

■ Also highlighted in my notes: NPGA is looking for ways to boost its Propane Days event; attendance has flattened at about 250. … The association has chosen Capitol Tax Partners as a tax lobbyist in the area of alternative fuels. … And it’s close to finalizing Fairmont Specialty as its new member liability insurance provider.