NPGA chairman-elect proposes gallon challenge

In a downtown Minneapolis hotel conference room earlier this summer, Randy Thompson posed a challenge to the propane industry. A gallon challenge.

Thompson is the founder and senior adviser at Maryland-based ThompsonGas, and he’s also the chairman-elect of the National Propane Gas Association (NPGA). He’s already looking ahead to 2019 when he’ll become NPGA chairman. Thompson got a head-start on his agenda when he made his challenge public at the Propane Education & Research Council’s (PERC) July meeting.

“You’re going to hear me talk about growth in this industry like nobody has ever talked about it,” he announced.

Nearly two decades ago, the propane industry was selling more than 12 billion gallons annually. But, due in part to energy competition, customer conservation and improved appliance efficiencies, that sales volume has sunk to 8 billion gallons in recent years. Thompson says the industry, with recent supply developments, new opportunities and improved technologies, can recover those gallons. So, Thompson’s challenge was born: Grow the industry by 4 billion gallons in the next five years.

“We have to find ways to get our marketers marketing again. We have to find ways to take this industry and not look at it as taking one customer from another, but the way we used to,” while embracing new communication technologies and advances, he says.

Thompson realizes that anyone can throw out random numbers, so he provided some specific examples of how he can see the industry recovering those lost gallons.

“Right now, this industry is not growing; it’s flat to declining,” he says. “We’ve got to figure out a way to grow it. The U.S. is producing more propane than any country on Earth. We have the product to sell, so let’s go sell it. We’ve got to figure out ways to do that.”

Thompson details a multi-faceted approach, and it begins with water heaters.

“We have assets (tanks) that are deployed in the field right now where we don’t have water heaters connected to them. That’s a year-round business,” he says.

By getting the roughly 4 million homes that already have propane on-site to add propane-fueled water heaters, the industry could grow sales by 1 billion gallons, Thompson says.

“It’s going to have to be a partnership with PERC and the marketer and the consumer. Everybody has to partner together and understand the benefits of one to the other. It’s a messaging campaign,” he says.

The industry must also consider “some new things on the horizon,” Thompson says. He points to opportunities with U.S. military installations where propane can maintain critical power needs during electrical grid outages or help sustain critical missions. It’s called energy self-sufficiency. These off-grid opportunities have the potential to add 2 billion gallons to the annual load, he says.

Engine fuels make up the other billion gallons of Thompson’s plan.

“If we get more people engaged in engine fuels, we could reach the goal in a short period of time,” he says.

Thompson also sees gallon-growth potential from widespread implementation of distributed generation, on a contract basis at homes and businesses and not just for standby power, and for peak-shaving electrical utility demand.
“The electrical grid in this country is aged,” he says. “The time might be now.”

Of course, none of this will be easy. That’s why Thompson is relating and comparing the story of a Chinese bamboo tree by motivational speaker Les Brown to the industry.

The tree takes five years to grow, but it doesn’t break through the ground until that fifth year. When it appears, the tree grows 90 ft. in five weeks. Of course, that growth isn’t possible, Brown says, without the five years of watering, nurturing and preparing the tree for growth.

Thompson has planted the seed. Is the industry ready and willing to grow?