Shut Down

The propane industry’s four-year push to tap into the lucrative indoor cabinet heater market came to a screeching halt when the National Propane Gas Association’s (NPGA) board of directors on Feb. 12 voted 88-1 to suspend any further expenditure of resources to move the contentious issue forward.

The vote effectively kills all hopes of gaining access to a virgin propane market that could burn between 11 million and 30 million gallons the first year and 322 million to 523 million gallons after 20 years, according to a market study funded by the Propane Education & Research Council (PERC).

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Both NPGA and PERC have been pushing hard to develop a cabinet heater for indoor use using composite cylinders.

PERC already has invested $1.3 million to study the market, develop product listing standards, fire-test cylinders and address concerns of fire service organizations. Another $300,000 has been set aside for outreach to consumers and propane industry personnel.

Meanwhile, NPGA orchestrated an outreach to the national fire safety community seeking changes needed in the NFPA 58 fire code that prohibits the indoor use of the heaters. A basic tenet of NPGA’s proposal was that the new resin technology makes the cylinders safer because propane diffuses through the melted outer jacket walls during a fire. In theory, firefighters are spared the danger of exploding steel cylinders or a concentrated stream of burning gas from a relief valve.

A proposal to amend the fire code to allow the application was scheduled for a NFPA meeting last June. However, NPGA’s Executive Committee chose to withdraw support for the proposal. The next vote is scheduled for 2009.

The Great Debate

Propane industry officials were struggling to sway their own marketers, let alone a conservative fire service community opposed to the changes.

The industry disagrees on using composite cylinders indoors. (PROPANE EDUCATION AND RESEARCH COUNCIL)

Lengthy and impassioned debates on the issue have taken place at Marketers Section meetings over the last year, including the day before the NPGA board vote.

Many marketers expressed concern about changing their decades-old stance against customers bringing propane cylinders indoors. They also share concerns by NFPA and Underwriters Laboratories that customers will try to trade the safer, but more expensive composite cylinders for steel ones once the need for winter heat arrives.

“If you approve this, you are legitimizing all of the improper indoor uses that we all know exist,” argued Dean Haldeman of Blue Flame Inc. in Berkeley Springs, W.Va.

“I believe it’s morally, ethically and culturally wrong to say it is OK to bring cylinders indoors. Customers aren’t smart enough to differentiate between good and bad cylinders.”

Others worried that cabinet heaters would steal gallons from home furnace loads and generate substantially more liability – and perhaps higher insurance premiums – for marketers.

Still others contend the remaining research and promotion investment should be left to the companies that manufacture, distribute and sell the appliances and cylinders.

Advocates noted that much work already had been done to make the units as safe as possible, including equipment designs that incorporated oxygen depletion safety shutoff system, restrictive connectors and anti-tip measures.

“It’s hard to give up on a 400 million gallon market with a track record in Europe, but we need more facts in order to make a decision,” says AmeriGas President and CEO Gene Bissell.

Joe Armantano, CEO of Paraco Gas Corp. in Rye Brook, N.Y., was clearly unhappy that the industry’s best guess of the potential cabinet heater market ranges from 11 million to more than 500 million gallons per year.

“I am very disappointed that, a year and a half into this debate, we still don’t know the facts about the size of the market. It’s a flawed process, and we need to examine how new products are brought to the market,” he says.

“The result does not diminish NPGA’s commitment to market-driven advocacy,” says NPGA President and CEO Richard Roldan, who noted that there seemed to be consensus when cabinet heaters were made part of the association’s recently updated strategic plan.

“I continue to believe one of the most important things we can do for the membership is prioritize goals according to their potential to open markets,” Roldan said.

PERC President Roy Willis says the industry must continue to seek opportunities to grow markets, examine the potential impact that new appliances and equipment have on existing markets, and study potential risks to consumers and the industry.

“Occasionally, as with cabinet heaters, there will be different opinions about roles or the path forward, and we all respect that. So long as the industry has a candid and open conversation about the issues, that’s progress,” Willis said.

“The great debate for 2008, in my view, is about what more can we do to build propane markets. That’s where PERC is focused.”

Composite Cylinder Impact

Darrel Reifschneider, CEO of composite cylinder manufacturer The Lite Cylinder Co., was sorry to see progress halted. He recognizes that much time, effort and money have been spent on exploring the cabinet heater issue and hoped the industry would have continued its push.

“It’s a big disappointment,” he says, although he wasn’t surprised with the outcome of the NPGA meeting.

“I saw at the last board meeting that was the way it was going to go. The handwriting was on the wall,” he says. “I didn’t think they were going to kill it. Some people just can’t get past the issue of putting a cylinder in the house.”

Asked about the product’s safety, Reifschneider notes the widespread use of cabinet heaters outside the United States. In fact, an estimated 450,000 households in New Zealand have cabinet heaters, according to information on www.cabinetheatersafety.com, and many are used around the world.

“It’s a safe product,” he says.

But it stands minimal chance of moving forward, Reifschneider adds.

“Not in my lifetime,” he says when asked whether the project will be revived at some point. “It’s a dead issue. We had enough trouble getting past the fire committee, but when you can’t agree among yourselves, you have no chance.”

Lite Cylinder will not pursue the project single-handedly, Reifschneider says when asked about the possibility.

“The fire community is so big that you need the muscle of an association like PERC,” he says, adding the company would be willing to work with others to pursue the cabinet heater project.

Headquartered in Franklin, Tenn., Lite Cylinder continues to manufacture 10- and 20-pound composite cylinders, but its 33-pound forklift cylinder has been stalled indefinitely.

The company was forced to shut down for 99 days last spring after five 33-pound forklift cylinders ruptured while in storage.

Cheryl West Freeman, from the Office of Hazardous Materials Technology for the DOT’s Pipeline and Hazardous Materials Safety Administration, says Lite Cylinder remains under review. She is uncertain when the company will be authorized to manufacture the 33-pound cylinder again.