Propane Fuels America: Indiana

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 Indiana.

Total odorized propane demand (2019): 259 million gallons

U.S. rank for gallons sold: 13

Gallon sales trend: Indiana has been on an upswing since selling 195 million gallons in 2017 and 233 million in 2018.

Census region/division gallons: Midwest: 4.13 billion/East North Central: 2.19 billion

Propane autogas school buses: Out of an estimated 13,134 school buses in Indiana in 2020, 539, or 4.11 percent, were fueled by propane.

Market Pointers

⦁ Indiana’s pro-small business, pro-energy environment lessens some of the regulatory and legislative hurdles seen in other states. This allows leaders to focus more on propane-specific issues like supply and pricing, and winter preparedness. Indiana Gov. Eric Holcomb signed legislation earlier this year that protects propane from municipal gas bans.

Propane AutoGas LLC, a division of Propane People Inc., provides fuel for more than 150 propane school buses operated by districts across Indiana, including those of DeKalb County Central United School District. Photo courtesy of Roush CleanTech

⦁ Indiana sells about 60 percent of its propane gallons into the residential market. The industry is also gaining traction with consumers who seek resiliency, reliability and energy security in the face of a sometimes-unstable electric grid, says Matt Solak of the Indiana Propane Gas Association.

⦁ The state has performed well in grant funding opportunities through the Volkswagen settlement program. Now in the third round of funding, schools in Indiana are projected to receive 74 propane-fueled buses for about $2.3 million. By comparison, the program is funding four electric school buses for about $1.2 million. In the first and second rounds, propane made up 17 of 62 total projects.

⦁ In recent years and prior to the COVID-19 pandemic, Indiana was among several Midwestern and Southern states where manufacturing accounted for the largest share of the state’s employment. Columbus, Indiana, is home to global engine manufacturer Cummins Inc., which is partnering with the Propane Education & Research Council on a propane-fueled engine for propane delivery and other applications.

⦁ Only five U.S. refineries can process more crude oil than Indiana’s Whiting refinery (435,000 barrels per day), the largest inland oil refinery in the nation. Refineries in Indiana produced 35 million gallons of propane in 2018.

Fast facts

State association affiliation: Indiana Propane Gas Association (IPGA)/indianapropane.com

Programs: The association offers $150,000 in appliance rebates a year, says Matt Solak, executive director of IPGA. Consumer-facing programs for furnaces and water heaters have been most successful.

Marquee events in 2021-22: Summer convention in French Lick, Indiana; hybrid fall board, membership and committee meetings in November in Carmel, Indiana; and next year will co-host the Great Lakes Propane Convention with Michigan and Ohio on July 26-28, 2022, in Grand Rapids, Michigan.

Before COVID-19: The propane industry in Indiana had contributed about $1.2 billion to the 2018 state economy. It’s too early to assess COVID-19’s impact on the state’s gross domestic product.

“We’re really using that program to develop our relationship with HVAC associations and the industry, marketing propane to them and to builders. It’s been a big project for us recently – coalition building and piggybacking on the success we had with ‘ban the bans’ legislation and turning that into long-term growth relationships for the industry.” – Matt Solak, IPGA, on its furnace and water heater rebate program

What’s the weather?

Average temperature (2020): 53.3 degrees F

Annual heating degree-days five-year average (2015-19): 5,448
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; Indiana Propane Gas Association; U.S. Energy Information Administration’s State Energy Profiles