An Entrepreneurial Spirit For 3 Generations

For the past 75 years, three generations of the Nicholson family have worked to make Eastern Propane the thriving propane business that it is today. Like many propane companies that were founded in the 1930s and '40s, it was the result of fulfilling a necessity, whether due to the population expansion that created more homes in rural locales or to facilitate the use of new appliances for cooking and water heating.

Today, Eastern Propane serves more than 15,000 residential, commercial, and industrial customers in northwestern New Jersey, northeastern Pennsylvania, and southern New York. However, when Robert Nicholson Sr. started the company in 1938, he did so to make sure that his restaurant would never be caught short of propane.

The First Generation
His son, Bob Nicholson, current chairman of Eastern Propane, tells the story about his father noticing his propane cylinder was empty when he started the range to cook dinners in his restaurant. That was on a Friday, but his propane supplier told him that the earliest a new tank of gas could be delivered would be the following Wednesday. Thinking he could provide better service than that, the senior Nicholson decided then to go into the retail propane cylinder business.

His company was named Modern Gas. It opened in 1938 and was renamed Cyl-Gas later that year. Its main business was selling 100-lb propane cylinders to residents of summer vacation home bungalows. Most of the company's propane business activity took place in the summer.

"When we went into business, [my father] said he would never go to sleep at the end of a day unless everyone had a supply of gas," Bob Nicholson noted.
That would be but one of several business ventures for Robert Nicholson Sr., who became a land developer, home builder, and kitchen installer, and owned Bob's Service Station with a Studebaker automobile dealership.

The War Years
Because the founding of the propane business coincided with the beginning of World War II, the business endured some unexpected challenges early on. It faced a period of product rationing that was required to fuel the war effort. Businesses had trouble buying metal, which was needed for bullets and military vehicles. In turn, gas companies had trouble buying metal cylinders.

As the war wound down, Cyl-Gas continued delivering 100-lb cylinders and propane for gas ranges at the summer bungalows. At the same time, Servel gas refrigerators were growing in popularity. After the younger Nicholson came out of the Navy, he installed a double-door Servel propane refrigerator with an ice cube maker. And that was just the beginning of another facet of the Cyl-Gas business — as electric refrigerators became more popular, people from the city would purchase an electric model and would ship their gas refrigerator to their summer home. Cyl-Gas would then connect them to propane, further increasing the company's summer load.

However, as the years went by, the elder Nicholson grew disappointed in the company's lack of winter business. It was then decided that Cyl-Gas should sell space heaters and floor furnaces. Father and son sold products to the bungalow owners by telling them that with these products, they could get more vacation time out of the bungalows. That part of the business grew, and the company began offering volume discounts for the gas.

"A competitor objected to us discounting the gas, but we only did it because of volume," stated Bob Nicholson. "Everyone does it today, but we were one of the first to discount for increased volume."
The senior Nicholson served on the West Milford Ration Board, which determined how materials were rationed in his area of New Jersey during the war. His business contacts from his real estate transactions, including his association with contractors, helped him grow the propane business. "The more people you know and are in contact with, the more business you will gain," his son stated.

As the father-son team worked to obtain more winter residential heating business, the younger Nicholson talked to three housewives who used electricity for cooking and fueloil for home heating. When he asked one why she chose those fuels over propane, she responded, "I don't want an ugly, rusty, above-ground tank in my back yard, next to my swimming pool, my lawn, and my landscaping." This prompted Nicholson to call his propane company competitors and pretend to be a customer asking for an underground propane tank. They all tried to talk him out of it.

The Future Is Set
"I then knew that Eastern Propane had its destiny set," Bob Nicholson stated. He and his daughter, Debbie, an attorney, worked on a customer agreement for Eastern Propane to retain ownership of the propane tank. He became trained through the National Association of Corrosion Engineers in cathodic protection to eliminate mill scale that causes rust and corrosion, and he eventually started a tank painting company, ABR Technology (Abrasive Blasting Restoration). He believes Eastern Propane was among the first to offer underground propane tanks to residential builders.

"I believe we put in more underground tanks in the '70s, '80s, and '90s than our competition," he claimed.
Nicholson continued the company's commitment to safety and is pleased to note that the NFPA 58 Liquefied Petroleum Gas Code now requires the use of cathodic protection. He adds that tanks must undergo periodic inspection and propane companies must keep proper records to prove to the authority having jurisdiction that the tank was properly installed.

As part of his commitment to safety, he developed an emergency response kit, which he describes as a toolbox that helps a bobtail driver or service technician stop a propane leak and take other steps to avoid accidents.
Through his tank painting business he discovered that he could not paint underneath the steel data plate on the tank. As part of the National Propane Gas Association's Technology Standards & Safety (TS&S) committee, he worked with others to enact an NFPA 58 requirement that every ASME tank's data plate must be stainless steel and seal-welded to prevent rust underneath it.

Bob Nicholson has been active in training first responders, and because of his safety knowledge, responders have sometimes called him to help at an incident site. He became aware that if a propane marketer attempted to help another propane company involved in a propane safety incident, that helpful marketer could also be charged with being involved in the accident. Because of that, he worked to develop the first state Good Samaritan Act in the 1970s. As a result of his efforts, various states across the country later passed their own Good Samaritan laws.

He has also continued the entrepreneurial spirit of his father, founding Lakeland Bank in 1969, which now operates 53 branches. In the mid-1980s, the Nicholsons acquired Diversco, an equipment distributor for Fisher and Blackmer. Soon after, ProChem, a distributor for RegO and Corken products that also performs bulk plant installations and fabricates bulk trucks, was purchased.

Bob Nicholson attributes much of his success to industry involvement such as serving on the TS&S committee, as a National Propane Gas Association (NPGA) director, and president of what was then the New Jersey Liquefied Petroleum Gas Association (now the New Jersey Propane Gas Association), and as a member of the Propane Education & Research Council's (PERC) research and development committee. NPGA presented him with a Chairman's Citation Award in 2008 for his safety, association, and industry contributions. In addition, he spearheaded the propane industry's centennial celebration in 2012 and has also worked to preserve and promote the industry's history through his involvement with the National Museum of Industrial History in Bethlehem, Pa.

"Our industry members can become more successful if they involve themselves in PERC and NPGA projects," he said. "They learn more about what goes on in the industry before it actually happens."

A Third Generation
Although Rob Nicholson, current president of Eastern Propane, was just 10 years old when his grandfather, Robert Nicholson Sr., died in 1974, he has fond memories of his grandfather, founder of the family propane business in Oak Ridge, N.J.
"Any time anything broke in the house, we would set it aside, and we would visit on Sundays," Rob Nicholson reminisced. "I'd gather broken things from my friends, and we would fix them together. He could fix anything."
"I worked in the cylinder plant around 1975 when I was 11. The cylinder plant was a fun place."

After Rob Nicholson graduated from college in 1986, his father asked him to help out with the family business for six months. But he never left. He went on to serve as company treasurer, and in 1988 became company president at age 24.
The following year the company sold its Diversco and ProChem businesses to gas equipment distributor Ray Murray Inc. (Lee, Mass.), allowing the young Nicholson to focus on the retail propane business exclusively.

In December 2005, a new segment of the company was spawned as Rob Nicholson expanded further into the rail terminal business. Targa Midstream Services LP built a new rail terminal on 5.6 secure acres in Sparta, N.J. owned by Eastern. The facility features four 60,000-gal. Trinity storage tanks, eight railcar unloading stations, four transport loading stations, one transport unloading station, four bobtail loading stations with methanol injectors, and one truck scale. Eastern Propane's wholesale sister company, Eastern Liquids LLC, is the sole operator and Targa, which has a long-term lease and operating agreement with Eastern, exclusively controls supply in and out.

This keen businessman has followed in his father's footsteps when it comes to industry involvement, serving on the NPGA board since 1990, being a member of the TS&S and governmental affairs committees, and is very active with the New Jersey Propane Gas Association.

Last year, the New Jersey association asked Nicholson to chair the association's relief efforts for Hurricane Sandy. The Red Cross and other agencies requested the association's help in getting propane to Red Cross centers and emergency responders, and he spearheaded the efforts to provide aid.

More recently, Eastern Propane's president has increased the company's focus on propane autogas. It joined Alliance AutoGas, a coalition of companies including conversion centers and propane marketers for a complete program to help companies with vehicle fleets transition to autogas. He says his company "walks the talk" in the area of autogas, with about 85% of its vehicle fleet operating on propane. The business has several Freightliner S2G propane bobtails on order, and a propane-powered Hummer and the Ford Roush F-250 are his vehicles of choice.

He stresses the importance of community involvement for all businesses, noting Eastern's work with programs for groups such as United Way, the American Red Cross, and the Boy Scouts. "If you have residential customers, you will find many of them involved with these organizations as well," Rob noted.

He also attributes the last 25 years of the company's success to "a seasoned management team and a great group of hard-working and dedicated employees."

The Future
Robert Nicholson feels it is unfortunate that the smaller propane companies are selling out to the larger ones, and he believes creativity will be necessary for the propane industry to thrive in the future. He sees great potential for propane use in co-generation or combined heat and power units.

In addition, he is currently working on a program to make propane generators a profitable product for the propane industry. "With Hurricane Sandy, a lot of people woke up to the fact that propane generators are really important," he stated, adding that more than 1000 Eastern customers use propane generators. He also believes there is a good future for propane mowers.
"If enough people with initiative and ambition pursue these new items, I think there's a good future for propane." —Daryl Lubinsky