The propane industry’s 2018 year in review

December 6, 2018 By     0 Comments

We can’t close the books on 2018 without looking back on the year in propane, which brought major opportunities and challenges, and forced industry members into action.

So, here’s our year in review – everything you need to know about the propane industry in about 700 words.

Dominant issues

The VW settlement scenario continued to unfold, with some propane leaders saying the industry has never seen a better opportunity to secure funding for propane autogas projects.

VW had contributed $2.9 billion to an Environmental Mitigation Trust as a result of its 2016 emissions cheating scandal settlement. We reported in October that propane vehicles are competing for up to $1.3 billion of that total.

National Propane Gas Association (NPGA) leaders and industry members waged a long battle against the Occupational Safety and Health Administration’s (OSHA) crane rule, requiring costly third-party certification for crane operators. OSHA released a new final rule in November, giving the propane industry some clarity.

The industry continues to monitor the situation concerning Line 5, a 65-year-old oil and natural gas liquids pipeline that runs under the Straits of Mackinac in Michigan and serves as a key source of propane in the state and surrounding regions.

Environmental groups, residents and state officials have pushed to take the pipeline out of service for safety reasons. Recent agreements between pipeline owner Enbridge Energy and the state of Michigan – the latest coming in October for Enbridge to fund and build a multi-use utility tunnel beneath the Straits to replace the current segment of Line 5 – seemingly ensured the future operation of the pipeline. However, prior to press time on our December issue, there was a flurry of activity behind the scenes. Included in the discussions was what entity would manage the new utility tunnel, says Derek Dalling, executive director of the Michigan Propane Gas Association. Proposed legislation would create a new authority to oversee the new tunnel.

Clearly, this story is not over.

Marketers on the move

Major players in retail propane made moves in opposite directions this year.

NGL Energy Partners exited the retail propane business to focus on crude logistics and water solutions. In April, it closed on a $200 million deal to sell a portion of its retail propane business to Ireland-based DCC. Then in July, NGL Energy Partners closed on a deal to sell its remaining retail propane business to Superior Plus Corp. for $900 million.

With the NGL acquisition, Superior Plus became one of the largest propane retailers in the United States. The Canadian company with U.S. operations in Rochester, New York, could vie for the top five in our Top Retailers list after ranking 14th this year. Interestingly, the company behind it, Energy Distribution Partners, had a busy 2018, marking its 20th acquisition since 2012. You’ll want to check out our new retailer rankings in February.

Notable events

The World LPG Forum, hosted by the World LPG Association, returned to the United States for the first time since Miami hosted in 2014. Houston drew about 1,400 total attendees from 76 countries to the October event.

The NPGA’s Southeastern Convention & International Propane Expo returned to Atlanta in April after a two-year stint in Nashville, Tennessee. Prior to Nashville, the show had been held in Atlanta for more than 60 total years. Industry members who preferred Nashville can rest easy because the show heads back to the Music City in 2020.

At the Propane Expo, we held the first LP Gas Rising Leaders Roundtable, gathering the industry’s bright, young leaders to talk about key issues. We did it in partnership with the Propane Education & Research Council, which hosted its first Can-Do Conference in July, focusing on marketing best practices, in Chicago.

Here at LP Gas, we launched a print magazine redesign in March to provide a more modern look and feel, and help bring you more of the content you desire each month for your business operations. We’re always interested in hearing from you, so please stay in touch in the new year.

*Featured Photo: Photo courtesy of Enbridge

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