Propane Fuels America: Iowa

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 Iowa.

Total odorized propane demand (2019): 544 million gallons

U.S. rank for gallons sold: 4

Gallon sales trend: Iowa saw substantial growth in retail gallon sales for two consecutive years. Sales spiked 32 percent from 353 million gallons in 2017 to 465 million gallons in 2018. Then, from 2018-19, sales grew another 17 percent due primarily to a highly active crop drying season.

Census region/division gallons: Midwest: 4.13 billion/West North Central: 1.94 billion

Propane autogas school buses/districts and contractors: 314/55

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Market pointers

• Large residential and agriculture markets secure Iowa’s position among the Top 5 states for retail propane gallon sales. Residential accounted for 50 percent of gallon sales in 2019, followed by agriculture at 37 percent. Iowa has the sixth-largest residential market of any state nationwide.

• Iowa’s agriculture market for propane is the largest of any state in the U.S. Iowa is the leading corn producer in the U.S., so grain drying generates most of the demand in this space. Propane is also commonly used to heat hog, chicken and turkey confinements.

• In August 2020, a derecho devastated many acres of corn in Iowa, leading to a slower grain drying season in 2020 compared to the highly active season of 2019, says Deb Grooms, CEO of the Iowa Propane Gas Association (IPGA).

• Iowa’s governor signed into law legislation that prohibits cities and counties from regulating propane and natural gas hookups. IPGA and its members lobbied for the bill in what Grooms calls a “proactive move” to prevent gas bans like those proposed in other localities across the country.

• Iowa’s propane industry has found success in promoting Volkswagen (VW) settlement funds for propane school buses. IPGA worked with the state’s department of transportation and the Iowa Pupil Transportation Association to get the message out about the funding, says Grooms. Investing in clean-burning, cost-saving propane buses with VW funds was a “no-brainer” for many schools, says Todd Pellett, Iowa state director for the National Propane Gas Association.

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Fast facts

State association affiliation: Iowa Propane Gas Association (IPGA)/iapropane.org

Programs: Iowa has a state PERC checkoff program for one-tenth of a cent of odorized propane. With state PERC funding, IPGA sponsors appliance rebates for high-efficiency propane furnaces and water heaters, pays for propane for fire schools around the state and produces duty-to-warn safety brochures. IPGA was also able to hire a director of safety and compliance through the Iowa PERC. The association owns a training center where it conducts safety training classes.

Marquee events in 2021: IPGA is partnering with the Minnesota and Wisconsin propane associations to host the North Central Convention & Trade Show in La Crosse, Wisconsin, on Aug. 24-26.

Before COVID-19: The propane industry in Iowa had contributed $1.9 billion to the 2018 state economy. It’s too early to assess COVID-19’s impact on the state’s gross domestic product.

“VW settlement funds were a catalyst that allowed us to shine a spotlight on propane school buses so people could see they’re a great alternative to diesel.” – Todd Pellett, Iowa state director for the National Propane Gas Association

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What’s the weather?

Average temperature (2020): 49.2 degrees F

Annual heating degree-days five-year average (2015-19): 6,744
U.S. average: 4,090

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