Propane Fuels America: Alaska

LP Gas’ yearlong Propane Fuels America series takes a deep dive into how each state benefits from the propane industry. Here’s our report on Alaska.

Total odorized propane demand (2019): 15 million gallons

U.S. rank for gallons sold: 50

Gallon sales trend: Annual sales have been steady around 14 million to 15 million gallons from 2017-19.

Census region/division gallons: West: 1.71 billion/Pacific: 910 million

Propane autogas school buses/districts and contractors: 30/3

Market pointers

Crowley Fuels is one of the state’s largest propane providers. Photo courtesy of Crowley Maritime Corp.

⦁ Strong commercial propane market in terms of gallon sales, tripling its residential sales. The lack of infrastructure in the state makes propane a good fuel source for commercial businesses. The rural nature of many homes makes it a strong market for growth in the residential sector.

⦁ Propane’s limited penetration could provide an opportunity for growth in on-site generators or onboard cooking and heating for boats in the fishing industry.

⦁ Good mix of propane marketer types – from small independents, especially in the Juneau area, to larger companies in Anchorage. Crowley Fuels is one of the state’s largest propane providers.

⦁ The industrial sector is the largest energy consumer in the state, followed by transportation consumption.

⦁ Propane’s positive cold-start properties benefit autogas bus customers in Alaska’s climate and should incentivize conversion of existing diesel buses. The Denali National Park concessionaire, Doyon/Aramark Joint Venture, has 29 propane-powered buses, according to the National Park Service.

Fast facts

State association affiliation: Pacific Propane Gas Association (PPGA)/pacificpropane.org

Programs: Rebates for marketers and propane customers. Most utilized are customer rebates, including on-road vehicle incentives and safe appliance installation program. PPGA provides a $1,500 incentive on a newly purchased propane vehicle or conversion on an existing vehicle with a propane system. The safety appliance program covers most types of appliances with rebates up to $500. Visit ppgarebates.com.

Marquee events in 2021: PPGA is a partner at the Western Propane Trade Show & Convention in Reno, Nevada. Annual meeting planned for Kauai, Hawaii, following NPGA Propane Expo in October.

Before COVID-19: The propane industry in Alaska had contributed about $300 million to the 2018 state economy. It’s too early to assess COVID’s impact on the state’s gross domestic product.

“Alaska is very different – not quite as concerned about fossil fuels as a major oil and gas producing state in our country. We tend to not have too much stress up there when it comes to regulatory challenges. It tends to be a fairly favorable legislative and regulatory environment. … Alaska gets to be the winner of the group and not have those same challenges, but Alaska is also our smallest state.” – Matt Solak, executive director, PPGA

What’s the weather?

Average temperature (2019): 32.2 degrees F

Annual heating degree-days five-year average (2015-19): 12,424 
U.S. average: 4,090

Sources: Propane Education & Research Council’s U.S. National and State Propane Market Profiles; Annual Retail Propane Sales Report; propane.com; Pacific Propane Gas Association; U.S. Energy Information Administration’s State Energy Profiles