Propane Fuels America: Minnesota

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 Minnesota.

Total odorized propane demand (2019): 559 million gallons

U.S. rank for gallons sold: 2

Gallon sales trend: Minnesota is on the way up, having sold 444 million gallons in 2017 and 498 million gallons in 2018. The state finished runner-up to Michigan in 2019 gallon sales.

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

Propane autogas school buses/districts and contractors: 960/44

Market pointers

• Frigid Minnesota sells nearly 60 percent of its gallons into the residential market, while about another quarter is used in agriculture. The Minnesota Propane Association (MPA) reports new load for secondary building heat – cabins, garages, farm shops, for example – and for new construction.

Lakes Gas is among a handful of Minnesota retailers in LP Gas’ Top Retailer rankings. Photo courtesy of Lakes Gas

• A handful of Minnesota companies are listed in LP Gas’ Top Propane Retailer rankings, starting with CHS at No. 8 with 105 million gallons in annual sales. The others are Lakes Gas (No. 15/63.5 million), Federated Co-ops (No. 19/30.7 million), Superior Fuel Co. (No. 34/9.4 million) and Northern Star Cooperative Services (No. 36/8.6 million).

• With 960 on the road, propane-fueled school buses are a success story in Minnesota. “Other autogas adoption is slow, but we’re in it for the long haul,” says MPA Executive Director Dave Wager. He adds, “Autogas dispensers are going in at a pretty good clip.”

• The propane industry in Minnesota is monitoring legislation related to energy conservation programs and clean car standards and working to ensure propane doesn’t take a back seat to electricity. Minnesota is the only state in the nation with a divided legislature – a Democratic House and Republican Senate.

• Minnesota has two oil refineries. The Pine Bend refinery, located in the Minneapolis-St. Paul suburbs, is the nation’s largest oil refinery located in a non-oil-producing state, processing about 320,000 barrels of crude oil per calendar day. Its other refinery, St. Paul Park, is located along the Mississippi River.

Fast facts

State association affiliation: Minnesota Propane Association (MPA)/discoverpropanemn.com

Programs: Consumer appliance rebate program, contractor appliance rebates, and Rinnai water heating and home heating product rebates, as well as rebates for propane engine fuel and infrastructure. The MPA offers Certified Employee Training Program classes mainly between March and October, and works to accommodate special requests. “We try to go to members as much as possible versus them coming to us,” says Wager.

Marquee events in 2021: MPA open house May 26 at its new facility in Zimmerman; North Central Convention with Iowa and Wisconsin Aug. 24-26 in La Crosse, Wisconsin; the MPA also secured a “premier spot” May 15-23 at the Twin Cities Auto Show, Minnesota State Fairgrounds, where it looks to showcase propane vehicles and other equipment. The MPA hosts a winter convention every January. Check with the association for the latest details.

Before COVID-19: The propane industry in Minnesota had contributed about $2.5 billion to the 2018 state economy. It’s too early to assess COVID-19’s impact on the state’s gross domestic product.

“Our members are reporting strong demand for new gallons. They say they’re setting a lot of tanks for new load … and not trading tanks with neighbors.” – Dave Wager, executive director, MPA

What’s the weather?

Average temperature (2019): 42.4 degrees F

Annual heating degree-days five-year average (2015-19): 8,210
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; Minnesota Propane Association; U.S. Energy Information Administration’s State Energy Profiles