Propane’s new growth strategy, dues restructuring get the go-ahead

Just as Danica Patrick’s ascension to the pole position in the Daytona 500 had everyone talking, propane’s ongoing effort to maneuver and meet a changing energy future is garnering attention inside and outside industry circles.

It’s a race to the head of the pack between energy competitors.

Propane has long been linked in legislation with (expensive, dirty) fuel oil, but a new industry effort aligns propane with (abundant, cheap and clean) natural gas, thus improving the nation’s perception of propane and underscoring the need for these like fuels to enjoy equal treatment in public policy.

The National Propane Gas Association (NPGA) approved this growth strategy, called Vision 2014, at its winter board of directors meeting last month in Charleston, S.C. Despite a 26 percent dues increase to fund the plan – NPGA’s first dues restructuring and strategic plan since 2006 – Vision 2014 has received overwhelming membership support, at least publicly.

“Everybody realized $700,000 is a big number, but the cost of inaction is a lot more,” says Gary France, NPGA chairman-elect and executive committee chairman from France Propane Services, referencing the plan’s price tag and the industry’s need for growth after a decade of gallon sales declines.

Independent marketers are footing the majority of the increase. Of the $716,000 total cost, $240,000 is for outside lobbyists, $167,000 for agency outreach, $107,000 for communications, and $88,000 for industry analytics. Another $115,000 is included for NPGA’s annual increase in expenses.

One particular function of Vision 2014 is protecting propane from government regulations. As an example, the propane and hearth industries prevailed last month in a regulatory battle with the Department of Energy over decorative hearth products. And the industry has been fighting a 10-cent-per-gallon rate increase on the TEPPCO pipeline.

The only real concern about the plan during the board meeting came in the form of a question: How will success of such a costly plan be measured and in what time frame? Success in some cases is dependent on the processes of courts and government agencies, making timetables difficult to predict, NPGA leaders say. We do know the full plan takes effect by 2014.

More energy positioning

Sen. Lisa Murkowski, R-Alaska, released a national energy plan, called “Energy 20/20: A Vision for America’s Energy Future,” designed to stimulate discussion on how the United States should proceed with an abundance of domestic energy supplies.

“I don’t think our timing can be any better,” says Blossman Gas President Stuart Weidie, chairman of the NPGA Governmental Affairs Committee, referencing both the propane industry’s plan and Murkowski’s plan during the NPGA board meeting. “Government policy requires us as an industry to be engaged at a greater level.”

According to Murkowski’s plan, there is a consensus to make energy abundant, affordable, clean, diverse and secure. The challenge is to align federal policy with that consensus.

“When I heard the five items, I was enthusiastic because propane meets all five,” Weidie says. “Our challenge is to make sure we are included.”

Propane-fueled bobtail

Sales are open for Freightliner’s S2G propane-fueled bobtail, with the project in its final testing stages. Industry leaders are encouraging propane marketers to visit with their truck dealers – for purchase inquiries and to promote themselves as propane providers.

About 40 units had been ordered and hundreds were expected as of February, reports Tucker Perkins, chief business development officer for the Propane Education & Research Council. He foresees full production to begin by mid-summer.

The truck, with its 8-liter engine, will cost about $80,000, which is about $12,000 more than the equivalent diesel price, Perkins says.

“Over time we’ll see that price drift down and diesel prices drift up,” Perkins adds.

A demonstration unit is planned for the southeast show in Atlanta.