Propane marketers’ great hypocrisy toward autogas

January 7, 2019 By    
According to PERC, propane autogas vehicles cost 27 cents per mile to operate. Diesel is about 10 cents more expensive in operational costs. Photo by Joe McCarthy

According to PERC, propane autogas vehicles cost 27 cents per mile to operate. Diesel is about 10 cents more expensive in operational costs. Photo by Joe McCarthy

Most propane marketers believe autogas has significant potential to help grow the industry.

Since 2004, the Propane Education & Research Council (PERC) has spent over $30 million on new autogas technology, and currently spends about $2 million annually to develop this market. Yet, the propane industry’s adoption of autogas as fuel for its own company vehicles remains low. Herein is the hypocrisy. We want fleet owners to use propane instead of gasoline and diesel, yet the propane industry’s rate of autogas use is extremely low.

Why don’t propane marketers use propane in their fleets? What are the barriers? What’s being done to overcome these barriers? What’s the plan for reaching critical mass adoption of autogas by the propane industry? We must answer these questions because there’s little hope of developing the vast autogas market until we do.

The autogas market by the numbers

The autogas market’s gallon-growth potential is vast. Autogas represents only .1 percent of the U.S. gasoline market, suggesting that we have made minimal market inroads. Further, for each 1 percent of the U.S. gasoline market displaced by autogas, we will add 1.5 billion propane gallons, a 20 percent growth. The propane growth potential goes up even more if the diesel market is considered.

Surprisingly, autogas is insignificant to propane industry growth and is trending flat. In 2017, autogas gallons represented only 2 percent of propane industry gallons, up from 1.2 percent in 2004.

What are the causes of this lackluster performance? Certainly, a major factor is the negative testimonial by the propane marketers who are not using propane in their fleets.

Reasons propane marketers don’t use autogas

Faulty technology and installations – not propane the fuel – have eroded propane marketers’ confidence in their fuel’s reliability. A reliable fleet, especially in the winter, is foundational to a well-managed propane company.

Additionally, the autogas technical service support network is currently undeveloped. This creates a feeling of vulnerability with the propane marketer. Who wants their nearest autogas technician to be 100 miles away? As a North Carolina propane marketer aptly stated, “The propane marketer feels on their own.” These stories and feelings are shared throughout our industry and have created a “you go first” and “let someone else work out the bugs” mindset.

Finally, propane marketers receive conflicting and inaccurate information about autogas’ performance, reliability of bi-fuel systems and vapor vs. liquid injection technologies. Who can the propane marketer trust for reliable data and information?

As a result, most propane marketers use gasoline and diesel rather than propane. Their decision is justified.

What propane industry leaders should do

Form a team of passionate autogas experts who are leaders – from PERC, state associations, propane marketers, installers and equipment distributors charged with increasing autogas adoption by propane marketers.

PERC, as the industry’s collaborator, should take the lead. Specifically, this team should:

  • Be clear that autogas adoption is priority. At every opportunity, speak about their plan to remove barriers, the benefits of using autogas and the importance of its adoption.
  • Be patient, diligent and start small on the applications most likely to succeed. The team’s challenge is great.
  • Address the complex issues head-on, especially in creating a nationwide service network.
  • Synchronize activities at the national level with state association autogas committees.

The time to get started is now. Growing the vast autogas market is dependent upon the propane industry first using propane in its own fleets. This team’s success will be a major contributor in achieving incoming National Propane Gas Association Chairman Randy Thompson’s goal to grow the propane industry by 4 billion gallons in the next five years.

Randy Doyle is a propane industry veteran with over 30 years of experience, and is retired from Blossman Gas. He serves on the PERC council and NPGA board of directors.

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