Propane industry looks toward opportunity in growing renewables segment

February 1, 2022 By    

If 2022 builds on the momentum of 2021, the propane industry will gain a reputation that’s cleaner and “greener” than ever.

At least, that’s the course industry leadership charted when, last summer, it debuted two messaging pillars that communicate propane’s environmental benefits in a new way:

⦁ Access to clean, affordable and renewable energy like propane ensures equity on the path to zero emissions.

⦁ Clean and renewable energy like propane accelerates decarbonization.

The messages not only inform the public about how propane contributes to a clean energy future today but also encourage propane professionals to envision new possibilities for their businesses. And the renewable component of both messages compels marketers to extend that vision right down to the molecule they distribute.

Advancements in renewables

Currently, renewable propane is available in limited quantities from select retailers, but stakeholders are working with urgency to bring it, and related fuels, to market, as evidenced by a flurry of activity reported in 2021:

⦁ Propane leaders and partners established the Renewable Propane Alliance to place renewable propane into the U.S. renewable energy portfolio.

⦁ SHV Energy and UGI launched a joint venture to advance production of renewable dimethyl ether (rDME), which can be blended with propane to create a low-carbon fuel that requires minimal modification to existing LPG infrastructure. Initial investment is set to begin in the U.K. in early 2022 and thereafter in the U.S.

⦁ Oberon Fuels began the first commercial production of rDME in the U.S. at its facility in Brawley, California.

⦁ The Western Propane Gas Association sponsored a state bill that would provide financial incentives for the production of renewable propane, including blends with renewable hydrogen or rDME.

⦁ The city of Petersburg, Virginia, welcomed its first gallons of renewable propane, supplied by Alliance AutoGas, to run 49 police and shuttle vehicles.

⦁ Suburban Propane and U-Haul extended their 2020 agreement to provide renewable propane in California.

Yet another partnership kicked off 2022: UGI entered into a 15-year agreement with California-based Vertimass to use its catalytic technology to convert renewable ethanol into renewable propane and sustainable aviation fuel.

More to learn

To be sure, more developments must occur before most propane marketers can access renewable propane and related fuels in ways that make sense for their businesses.

Source: LP Gas 2021 State of the Industry Survey_ renewable propaneLP Gas surveyed retailers to assess their interest in marketing renewable propane if it becomes available in their service areas, and 49 percent of respondents answered in the affirmative. These retailers see an opportunity to diversify and generate revenue.

One marketer based in Louisiana and Arkansas views renewable propane as a key corrective to government pressures on the oil and gas industry: “As government cracks down on drilling and fracking, it will be the go-to source of supply.”

Still, nearly as many respondents – 40 percent – are unsure and need more information about how renewable propane will be produced, purchased and distributed.

This year, expect to hear more about renewable propane from industry leadership. A task force of propane industry leaders, including Steve Kaminski of the National Propane Gas Association (NPGA) and Tucker Perkins of the Propane Education & Research Council (PERC), formed in late 2021 to develop more messaging that’s specific to renewable propane.

The task force will examine a variety of messaging approaches to bring renewable discussions to the forefront in 2022, and it hopes to initiate new conversations about the benefits of renewable propane, according to NPGA and PERC.

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