Retailer brings autogas to Nebraska

November 14, 2016 By    
Photo courtesy of Otte Oil & Propane

From left, C.A.F.E. Nebraska’s Lenny Hernoud, Cubby’s Sean Juett and Otte Oil & Propane’s Jake Otte, Trish Harding and Jessica Otte at an autogas station just west of Cubby’s, a convenience store. Photo courtesy of Otte Oil & Propane

As farm co-ops became more competitive within Nebraska in the 1990s, Otte Oil & Propane diversified its propane business into cylinder exchange.

The change proved positive, as Otte Oil & Propane now exchanges about 125,000 cylinders per year, according to operations manager Jake Otte.

The company embarked on yet another diversification strategy a few years ago, moving into propane autogas as a means to grow margins. Last year, Otte Oil & Propane sold 70,000 gallons in vehicle fuel to the market around Lincoln, Nebraska, and the company has positioned itself for growth in the coming years behind several infrastructure investments.

“We’ve got five stations now that are open 24 hours a day,” says Otte, who runs the company with his sister, Jessica Otte.

Four of Otte Oil & Propane’s stations reside in Lincoln, while a fifth is located to the north in Columbus, Nebraska. The company has plans to add two more stations within the region, as well.

“We’ve been trying different dispensers,” Jake Otte says. “We have three different styles at five stations. We’re trying to figure out which works best.”

Simplicity is the key to an effective dispenser, he adds.

“We’ve been in this four years, and it just gets easier every time we do it,” Otte says. “All of the dispensers in Lincoln have the Euro-[style] nozzle, which is more user friendly.”

According to Otte, autogas hasn’t taken off in Nebraska and surrounding states as it has in other parts of the United States because the factors driving growth in some regions aren’t as pressing in Otte Oil & Propane’s region. Still, Otte expects his market to soon catch up with other parts of the nation.

“We don’t have the pollution problems like the West Coast and East Coast,” he says. “We don’t have a Clean Cities Coalition like a lot of states do.”

But Otte Oil & Propane has taken steps to build local awareness of autogas. It partnered with Zebulon Innovations, the North American importer and distributor of the Zavoli LP gas vehicle conversion system. Otte Oil & Propane also works closely with C.A.F.E. Nebraska, which sells and installs the LP gas vehicle conversion system for Zebulon.

“There’s been talk of an autogas committee where Zebulon, me and maybe some other retailers could get together to really push this,” Otte says.

Educating locals about autogas as a safe alternative fuel for vehicles is one task that lies ahead, he adds.

“There are a lot of misconceptions about propane and how people think it’s dangerous,” Otte says. “A lot of people aren’t educated about it. The dangerous factor is something that gets brought up quite often.”

But that hurdle can be cleared with time and effort.

“We finally got the fire marshals on board,” says Otte, who adds that Otte Oil & Propane currently fills about 40 autogas vehicles. “They were hesitant at first and didn’t know anything about [autogas] when setting up a station in town.”

More on Otte Oil & Propane

OWNER: John Otte
LOCATION: Davey, Nebraska
PROPANE SALES: 2.5 million annual gallons

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About the Author:

Kevin Yanik was a senior editor at LP Gas Magazine.

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