FedEx Ground Joins Move Toward Propane

Federal Express (Memphis, Tenn.), known for offering overnight package and mail delivery across the U.S. and worldwide, has among its divisions FedEx Ground, which focuses on shorter-distance small package deliveries that trucks and vans handle exclusively. For the FedEx Ground division, the parent company hires independent contractors who run the operations as their own businesses.

Jon Chase, one of those independent contractors, took advantage of Federal Express’ recent offer of incentives to help contractors pay for alternative-fuel technology in their fleets. Through his company, Chase Delivery (Lancaster, N.Y.), he oversees 30 to 35 part-time and full-time drivers who operate 22 FedEx Ground trucks around a large area of Buffalo, N.Y. He used incentives from the parent company to purchase a Ford F-59 delivery truck that runs on a Roush CleanTech (Livonia, Mich.) dedicated propane autogas fuel system to serve this high-mileage route in Buffalo.

Roush CleanTech unveiled the Chase Delivery truck at the National Truck Equipment Association (NTEA) Work Truck Show in Indianapolis in March. Chase estimates his company will save substantial costs over the lifetime of the delivery truck. In addition to UPS’ announcement at the Work Truck Show that it would add 1000 propane-powered vehicles to its delivery fleet, and DHL saying two years ago that it would add propane autogas vehicles, FedEx is the latest to continue the trend of package delivery companies making a commitment to propane.

Under FedEx Ground’s reimbursement program, the company pays contractors for their fuel use and mileage according to the type of vehicle and the fuel used. As an incentive, FedEx has agreed to pay the diesel fuel reimbursement for alternative fuel vehicles. This allows Chase to pocket the difference on the savings from propane, helping to offset the cost of the truck.

 Chase spoke to another FedEx Ground contractor who saw value in that incentive. While Chase went with propane autogas, partly because the F-59 vehicle he purchased could be quickly converted to a Roush CleanTech propane autogas fuel system, the other contractor went with CNG, which did not turn out to be an easy transition.


“It was not necessarily the technology, but the company they are dealing with, as well as some logistics issues,” Chase stated. “The information I got from Roush CleanTech regarding propane and its flexibility, it’s just a matter of getting the right fittings to be able to fill your trucks up and working around the price that you might like to get.” Range issues with CNG also swayed him toward propane.

The switch to propane autogas will help the delivery drivers concentrate more on the task of transporting packages. When drivers work with the windows open for most of the year, diesel exhaust fumes from their own vehicles often waft into the driver compartment. With the low-emissions propane system, the driver won’t constantly have the light-headed feeling that sometimes comes from smelling diesel all day. Also, propane autogas runs quieter than diesel, another factor that allows the driver to focus more on the job at hand.

But the cost savings of propane autogas is the main reason Chase made the switch. A press release announcing his move to propane mentioned that his business would save about $25,000 by switching that one truck alone to propane, but Chase claims that number is “pretty conservative” because it doesn’t factor in such elements as the propane engine’s reduced maintenance cost compared to a diesel engine. He expects a less than three-year return on investment, and he plans to add three more alternative fuel trucks to his fleet by year-end.

Chase, an advocate of various alternatives to diesel, hopes the exposure from the NTEA show will push more FedEx Ground contractors that are on the fence to move to alternative fuels.  

Roush CleanTech has worked to expand the number of industries that use propane autogas. The move toward package delivery started through Roush CleanTech’s partnership with Ford dealerships across the country, and the FedEx Ground deal started through South Bay Ford in Hawthorne, Calif.

Todd Mouw, vice president of sales and marketing for Roush CleanTech, said Roush CleanTech built some demonstration units for South Bay Ford to allow customers to test the vehicles to see if they liked them. Green Alternative Systems (Chino, Calif.) installed the propane systems on the demonstration units.

Roush CleanTech and Federal Express have discussed expanding the use of vehicles beyond its FedEx Ground business, but Mouw could not provide details on those discussions. He sees additional uses for the F-59 beyond package delivery, however. Linen service companies and vending machine delivery companies have shown interest in the chassis.   

Chase currently fuels the vehicles at Rusiniak’s, a towing company and gasoline station in Cheektowaga, N.Y. that sells propane autogas. He has spoken to Federal Express’ corporate sustainability department and hopes the department will soon allow an onsite propane filling station to be built at the FedEx Ground terminal.     —Daryl Lubinsky

‘Big Brown’ Gives Propane Autogas a Big Boost

UPS photos
Millions of people see the ever-present United Parcel Service (UPS; Atlanta) “big brown” trucks as they deliver packages across the U.S. and to more than 200 countries and territories worldwide. A typical UPS truck makes between 100 and 150 delivery stops each day.

On March 5, that package delivery company gave a huge boost to the propane industry when it announced at the National Truck Equipment Association (NTEA) Work Truck Show in Indianapolis that it plans to purchase 1000 propane-autogas package delivery trucks and install an initial 50 propane fueling stations at UPS locations. Propane will get great recognition as people see “Propane Vehicle” on the side of the trucks, but the attention this deal will get from other companies that operate vehicle fleets could have an even greater impact. Tucker Perkins of the Propane Education & Research Council (PERC) believes that many companies with vehicle fleets look to UPS as a model fleet that quantifies every aspect of its business to save money and the environment.

According to Perkins, the embrace of propane by UPS —which operates what various sources list as the largest commercial fleet in the U.S. at more than 92,000 vehicles — is a momentous event. Perkins, PERC’s chief business development officer, believes the $70-million transaction is one of the largest alternative fuel deployments announced by one company at one time.

UPS also believes it is a big deal, describing it in a news release as “the biggest bulk purchase of propane-[fueled] vehicles yet.”

But although the deal was a pleasant surprise to many in the propane industry, it should not be too surprising when you look at how UPS has touted its sustainability programs for years. The company works to reduce its global greenhouse gas emissions in various aspects of its business. One initiative involved working to get UPS drivers to make more right turns than left to shorten their routes and save fuel. The company’s vehicle fleet, composed mainly of the recognizable brown trucks, is a primary area of focus for the sustainability initiative.


Prior to the March announcement, UPS operated approximately 3150 alternative fuel vehicles, including electric, electric hybrids, hydraulic hybrids, LNG, CNG, biomethane, and ethanol vehicles, in addition to a handful of propane models. The business’ global alternative-fuel fleet includes vehicles in the U.S., Germany, Canada, the Netherlands, Chile, Thailand, Hong Kong, Brazil, and the United Kingdom.

Although UPS operates 900 propane vehicles in Canada, until this past month the company had only used propane vehicles sparingly in the U.S. That changed with the March 5 announcement.

The UPS deal continues a trend for package delivery companies adopting propane for their vehicle fleets. In 2012, DHL Express launched 100 Ford E-250 vans for package pickup and delivery, equipped with the Roush CleanTech (Livonia, Mich.) dedicated liquid propane autogas fuel system. More recently, Chase Delivery (Lancaster, N.Y.), a contractor for FedEx Ground, used incentives from Federal Express to purchase a Ford F-59 delivery truck that runs on a Roush CleanTech dedicated propane system (see p. 29). The truck will serve FedEx Ground’s high-mileage route in Buffalo.

Asked when UPS began looking at propane autogas vehicles as an option, Mike Casteel, the company’s director of fleet procurement, said that was difficult to pinpoint, because the company is in constant communications with vehicle manufacturers about technological advancements. Since Freightliner Custom Chassis Corp. (FCCC; Gaffney, S.C.) was already UPS’ primary chassis provider for the delivery vehicles, it frequently discusses alternatives with the manufacturer regarding the mid-size truck market. Over the past year or two, UPS began the work of getting propane vehicles in its fleet and in recent months began working with several companies to develop an economical option to natural gas. The company last summer completed a pilot program, testing 20 vehicles on propane.

UPS tested them for performance and even installed a propane autogas station near the company’s corporate office in Gainesville, Ga. Although the pilot vehicles have run about 200,000 miles in total, the drivers in the test group quickly determined that the vehicles performed just as well as gasoline models. UPS liked various aspects of propane vehicles that the propane industry has always promoted, such as low cost of the infrastructure compared to other fuels and the lower contamination impact of the infrastructure on the ground, water, and air. Add to that the benefits of the increased range of propane vehicles and the portability of propane compared to CNG, and they saw a winner.

The completed UPS vehicle, which was on display at the Work Truck Show, is a team effort from FCCC, which builds the chassis; CleanFUEL USA (Georgetown, Texas), the liquid propane injection (LPI) fueling system provider; and Powertrain Integration (Madison Heights, Mich.), which supplies the GM 6L engine and packages the entire system into the FCCC truck. PERC provided $780,000 toward the infrastructure project and helped with vehicle certification.

Transitioning to propane autogas is “simply another part of our alternative fuel strategy that has a somewhat different deployment profile than natural gas,” Casteel added. “It’s something we’re able to take advantage of in smaller deployments in rural areas where a natural gas deployment would not be possible. Access to fuel or the economies of scale that are necessary to justify the infrastructure for natural gas is a completely different financial picture than propane.”


FCCC’s Involvement

FCCC has quite a history with UPS, building at least 25,000 trucks for that company since the 1990s, said Mike Stark, senior technical sales manager for FCCC. He notes that his company is the largest supplier of delivery vehicles for UPS, including gasoline, diesel, CNG, hybrid electric, hydraulic hybrid, and all-electric models, in addition to propane.

The groundwork for FCCC’s involvement in the UPS project was set about three years ago when FCCC began work on the S2G propane bobtail project with CleanFUEL USA and Powertrain Integration. Because the three companies were familiar with each other from working on that product, they were ready when the UPS project presented itself. FCCC began by building the chassis for the 20 prototype vehicles that UPS used for its 2013 pilot project in Gainesville, Ga.

The decision to commit to propane by what is said to be the country’s largest commercial fleet validates the propane commercial van market, said Bryan Henke, FCCC manager, product marketing. He sees the chassis being used for other markets in addition to package and delivery. Prospects include the beverage, linen, and baking and snack industries.

“Beverage I think is a good target because they need high gross vehicle weight,” Henke noted. “For people who operate vehicles in other vocations, it’s opened their eyes, ‘Wow, we could not only be more efficient with the vehicle but we could also save money on fuel, be environmentally friendly, and get a return on investment that‘s going to help our bottom line.’”

CleanFUEL USA’s Involvement

The UPS news is a celebration not just for the companies involved, such as CleanFUEL USA, but for the entire propane industry, said Curtis Donaldson, CEO of CleanFUEL USA. He remembers how the propane autogas industry was “on life support” in the 1990s and early 2000s. The growth of the autogas industry now, he added, is “a rising tide that lifts all boats.”

He agreed with Perkins about UPS’ program as a model that other fleets follow. CleanFUEL USA and all autogas industry suppliers can call on customers and say, “What is it that UPS knows that you don’t know?”

“I think the industry can claim that the world’s largest fleet has elected to go with propane. How can that not be good?” Donaldson asked.

It’s going to be good for UPS, which will initially deploy the vehicles in Louisiana and Oklahoma, and is already finalizing additional states for deployment. “Now we have to do what we committed to doing,” said UPS’ Casteel. “We will begin deployment probably sometime in the summer.”

PERC’s Involvement

PERC was involved early in the process, approving $385,000 in funding to assist in developing the UPS product; it worked with Powertrain Integration on calibration of the E78 controller for propane and with CleanFUEL USA on getting the vehicle certified by the Environmental Protection Agency and the California Air Resources Board.Involvement with UPS carries weight with fleet managers across the country because the firm quantifies every aspect of its business to save money and the environment, notes Perkins.

“So for them to ultimately come to a point where they’re making a large move forward to propane autogas, I think should speak volumes to people who watch UPS,” Perkins stated.

“I also like the intangibles that come along with that. [For example], when they start talking about how their drivers like the performance and how their mechanics like the access and [ease of repairing] the vehicles. They’ve also made clear they approve of the low-cost infrastructure and not having to worry about polluting ground, air, or water with the dispensers. UPS is a high-tech quantifying company that’s making a corporate commitment, and we haven’t seen that before in this industry.”    —Daryl Lubinsky

Low-Emitting Nozzles
Part of the Deal

UPS’ deployment of propane vehicles will involve the unveiling of new low-emission fueling nozzles, which will highlight the “man-machine interface of the fueling,” said Tucker Perkins of PERC.

PERC and UPS plan to review several nozzle models, including those now used in Europe. The top priority is to field test a nozzle that offers required safety features, is low-emitting, and is user-friendly for the staff that refuels the vehicle.  

”[The nozzle must be] easy to use. We must ensure it doesn’t open until the connection is made, and it can’t disconnect until the re-fueler disconnects it,” Perkins stated. “We’re going to use this UPS field deployment as the perfect opportunity to demonstrate this nozzle technology.”

Ultimately, PERC’s goal is to spur the adoption in the U.S. of an autogas refueling nozzle with low emissions that can be easily and quickly connected to a vehicle tank. That technology can then be demonstrated to convince state energy officers and code officials to reduce or possibly eliminate current public training requirements on fueling.

Propane Vehicles Prominent
At Work Truck Show

Also at the National Truck Equipment Association’s (NTEA) Work Truck Show in March, CleanFUEL USA announced its new vehicle offering, the GMC C2500 pick-up truck equipped with a 6.0L engine and CleanFUEL USA liquid propane injection (LPI) system. This recently updated system includes a simplified design and new fuel rails for reduced weight, yielding less heat absorption and promoting the liquid phase of the propane injection process.

CleanFUEL USA’s Curtis Donaldson said his company saw an opportunity with its propane system for the GM G4500 cut van chassis. But he believes the C2500 and C3500 3/4- and one-ton pickups are a higher-volume market. The only difference between the C2500 and C3500 and the G4500 is that the C-series required a different controller. The company was developing the E78 controller for the UPS vehicles, so it decided to use that controller to also manufacture the system for the C2500 and C3500 pickups. Donaldson noted many customers have asked for the C2500 and C3500 products, and his company is working to bring that product to market. CleanFUEL USA is expected to soon gain EPA certification for several General Motors 6.0L light-duty applications, including the 2500/3500 pickups and cargo vans.

FCCC and CleanFUEL USA also displayed an FCCC S2G with a Linebacker crane truck body at the NTEA show. Bryan Henke of FCCC told BPN that start of production for the S2G is set for mid-June, but in the meantime, he told BPN that AmeriGas would be field-testing its first S2G unit.

Marketers Get Help Managing Fleet Headaches

As the everyday responsibilities of running a propane company compound, many marketers are finding that a fleet management company can help ease some of the burdens associated with handling their fleets in the most economical and thorough manner. Many have started to hire fleet management companies to oversee the maintenance of their fleets, including bobtails and service vehicles.

They have also sought the help of fleet management firms regarding vehicle acquisition, vehicle financing, maintenance, insurance, fuel management, remarketing, and other fleet management duties. Fleet management companies can help with one or several of those duties.

While a number of fleet management companies work with all types of companies nationwide, ARI, based in Mt. Laurel, N.J., is one of the first to have stepped into the propane arena. Several years ago, it recognized that the propane industry could use fleet management services. Rob Hoysgaard oversees the company’s utility and government group as director of sales support.

The company places propane, natural gas, electric, water, and telecom companies under that category.

 “If you talk to some individuals in the propane industry, they would tell you that they wouldn’t consider themselves a utility, but because it is a highly specialized industry with unique fleet needs, much like a utility or government fleet, we rolled it into that group,” Hoysgaard noted. Hoysgaard is active within the propane industry, serving on the board of directors for the National Propane Gas Association. Bill Doman, department head, sales support, for ARI will speak at this year’s annual conference in Atlanta. ARI also recommends propane as an autogas whenever it is appropriate.

Various fleet management companies do business overseeing vehicle fleet programs for all types of companies. And, like other fleet management companies, ARI can manage the vehicles from acquisition to disposal. But Hoysgaard notes that ARI specializes in what it refers to as complex truck fleets. The propane industry’s use of vehicles with valves and hoses fit that category. ARI works with propane fleets to handle tasks such as upfitting a chassis for different applications. And once the vehicle is on the road, ARI works with the fleet to use the best providers to maintain the vehicle. That has been especially important over the past several months, when extreme weather conditions have affected much of the U.S., putting pressure on fleets and the overall supply of propane. ARI has worked with customers to ensure their fleets are well serviced and on the road, so they can focus on delivering their product and servicing their customers.

One propane marketer that uses the services of a fleet management company is Superior Plus Energy Services (Rochester, N.Y.), which hired ARI to handle various fleet management duties. Superior Plus director of business development Bruce Ruppert has seen how ARI can help a propane company manage its fleet headaches.

Over the past few years, Ruppert has been involved with Superior’s acquisitions of other businesses. He was a Griffith Energy employee when Superior Plus acquired that company in 2010. Soon after the acquisition, he was given responsibility to manage Superior’s fleet of vehicles, which included propane bobtails and service vehicles along with delivery vehicles for fueloil and kerosene. Couple that with managing vehicles for Superior Plus’ Burnwell Energy business, and Ruppert was managing vehicles for three separate companies.

“If there were three ways of doing things, we were doing all three,” Ruppert said.

In addition to the tasks mentioned above, ARI also assists Superior Plus with regulatory compliance, licensing, and accident management. ARI also manages maintenance duties for Superior’s vehicle fleet, helping Ruppert avoid one of the main headaches of managing the fleet.

Superior Plus uses ARI’s Web-based system to track maintenance issues for every vehicle. Previously, Superior used a vehicle tracking system for its Griffith Energy business in New York, but the system was labor-intensive. A Griffith employee had to enter each invoice manually, and this system had not been extended to the other states in which it did business. If someone questioned Ruppert about a specific fleet expense, he could not provide any detail. “When someone would say ‘Why is this over budget?’ it was a question I could not answer,” he said.

He can answer questions like that now. Superior Plus began a pilot program with ARI in March 2013 to manage maintenance for a small portion of its fleet in New England. That was successful enough for Superior Plus to add the program to its New York and Pennsylvania locations toward the end of last year.

Como Oil & Propane (Duluth, Minn.) is another propane marketer that utilizes ARI’s services, having ARI serve as Como’s fleet manager. Covering northeast Minnesota and northwest Wisconsin, Como sells propane and fueloil through 10 locations. In addition to managing the bobtails and service vehicles for Como’s propane business, ARI is also responsible for its oil tank wagons and its fleet of about 12 semi-tractors.

Vehicle maintenance is one of the main duties ARI handles for Como. Jim Olson, Como’s director of safety, compliance, and asset management, can look at real-time reports on his fleet by viewing ARI’s Web-based system.

“At any given moment, our managers can pull up the information and see from an administrative standpoint where all the vehicles are,” Olson noted. The reports provide information such as notifications of when preventive maintenance is due; ARI also sends him e-mail alerts on abnormal odometer and fuel consumption data.

He can create his own detailed reports, with the ability to sort by repair item such as brake jobs. He can see which of his company’s divisions might be harder on the equipment than others, and he can also review cost per mile by division, company-wide, or by vehicle.

“It’s a staggering amount of data that no one in our company could have even started to attempt to collect and collate based on our old programs,” Olson stated.

ARI will also create special reports. For his accounting department, Olson needed to summarize various categories of maintenance and repairs by division and by month. “They just plug it into the financials, and they’re done,” he said. The fleet management company also manages Como’s relationship with its vendors. ARI pays the vendors and sends Como one bill, which took a big load off Como’s accounts payable department.

Superior Plus and Como Oil & Propane are just two of several propane marketers that are clients of ARI.

In the area of maintenance, ARI will manage the work that’s done on the vehicles, making sure the propane marketer is getting the right repair at the best price, which helps control costs. ARI operates three call centers 24 hours a day, seven days a week, to ensure repaired vehicles are returned back to the marketer as quickly as possible. The company will pay all the vendors and provide the propane marketer with one monthly invoice for maintenance as opposed to the marketer receiving many invoices from many vendors. ARI can help a small marketer that might use only one repair shop, or medium to large marketers that might need help with licensing and compliance in multiple states. ARI will customize its services to meet a marketer’s needs. The fleet management company offers various services to help propane marketers manage vehicle expenses.

Maintenance

ARI’s staff manages the bid process for maintenance on Como vehicles. Como gives ARI clearance to accept bids up to a certain dollar amount, which Olson describes as a real timesaver. Once the vendor provides an invoice, ARI immediately enters it into its online fleet management system, providing him with real-time data about his fleet.

“The main issue is managing our repairs, maintenance, and tracking all the data in real time,” Olson noted.

Olson also likes the customized reporting that he can get from ARI. When he recently needed to summarize various categories of maintenance and repairs for his accounting department, and he needed it in a specific format so he could send it every month to accounting, ARI handled that. The company also helps Olson shorten the time he spends dealing with vendor invoicing issues since it sends Como one bill per month for all its maintenance. “That reduced a tremendous load on our accounts payable department; I can’t begin to tell you the time savings that provided,” Olson stated.

ARI also works with Superior Plus in the area of maintenance. “They are our advocate,” Ruppert explained. Superior deals with vendors of all sizes, and they are now all part of ARI’s program. When a Superior Plus truck breaks down, the driver of that truck now calls ARI. A representative from ARI with mechanical knowledge then deals with the repair vendor.

Although Ruppert likes to think that his vendors are honest with him at all times, he appreciates that ARI looks out for him as it negotiates with vendors to keep prices down. In the past, Ruppert had no good way of managing that process because there were so many transactions. In the past, Ruppert received hundreds of invoices every month. Now, with one bill from ARI, he saves the labor required to enter all the data. In addition, he gets detailed reporting on the repairs. If he sees a truck repair price on ARI’s reporting site that looks unusual, he can drill down almost to the nuts and bolts to see detail on the repair.

For example, Ruppert can look specifically at brake jobs. If he sees more frequent brake jobs at some locations than others, he can investigate if drivers are abusing the vehicles or if he needs to buy better brake pads. When the company receives its financial reports, questions might arise regarding items in other areas of the business. “But there are no questions on the vehicles because we’ve got that all figured out by the time the financials come off,” he stated. “That’s a much better world for me to live in.”

He appreciates the improved control he now has over expenses, and he likes that his location managers also have some control over the process. He has given ARI the authority to approve any repair items up to $1000. The fleet management company sends an email to the location manager and copies Ruppert for any repair over that amount. He likes that his managers can control the bottom line for their specific locations.

Fuel Management

Ruppert’s one bill per month from ARI includes his company’s gasoline and diesel costs. Superior Plus drivers use a Voyager fuel card, and transactions on that card go through ARI’s online tracking system. He can determine just how much each location spends on fuel, and email alerts enable him to get a handle on driver behavior and possible issues quickly by notifying him if a driver using a truck with a 50-gal. tank purchased 60 gallons of fuel in one transaction, for example.

Inventory Management

ARI tracks vehicle inventory for Superior Plus. The online system includes each vehicle’s identification number, fuel tank capacity, and license plate number, and shows when the vehicle is due for registration and preventive maintenance. It also reports when his bobtails and tank wagons are due for their visual and leak tests.

“We’re actually having locations key in their mileage every week for the trucks so we can have that mileage for tax reports, and sometimes you need that for registration,” Ruppert stated. “Once I have mileage, if I’m trying to do periodic maintenance on a vehicle every so many miles, I know when that’s due.”

Other Services

ARI assists companies on the vehicle acquisition side, facilitating bids, obtaining financing, and working with the bank in processing payments. The company offers additional services such as leasing and financing, vehicle equipment and remarketing, risk management such as motor vehicle record checks and online safety training, and accident management and subrogation.

Although Ruppert and Olson use only a few of the services, they are sold on the concept of propane marketers using a fleet management company. “I think you will see this gain more popularity in the next couple of years as people see the true benefits of it,” Ruppert noted.     —Daryl Lubinsky

Odorized Propane Sales Tumble; Overall NGLs Edge Up

State and PADD data gathered on odorized propane markets in 2012 show total U.S. sales tumbled nearly 12.9% compared to 2011, a loss of more than 1.14 Bgal. year over year. According to the American Petroleum Institute’s (API) “2012 Sales of Natural Gas Liquids and Liquefied Refinery Gases” survey released early this year, odorized propane sales in the nation stood at nearly 7.74 Bgal. in 2012 as opposed to the almost 8.9 Bgal. sold a year earlier.

The latest loss, as reported by API, follows a 3.3% decline in 2011 compared to 2010, about a 7.6% drop in 2010 from 2009, a 4% dip in 2009 from 2008, and a deficit of 3.4% in 2008 compared to 2007. The last year sales showed an improvement was in 2007 over 2006, when volumes rose 7.8%. For the five-year period—2008 through 2012—included in API’s latest report, sales figures show an erosion of more than 2.2 Bgal. that represents a near-22.2% retreat.   

The news was a bit better for U.S. sales of natural gas liquids and liquefied refinery gases—butane, ethane, pentanes plus, and propane—which edged 2% higher from 2011. However, propane, which represents a 40.5% slice of the overall NGL pie, came in 0.7% lower in 2012 from a year earlier. Butane, with a 15.9% share, gained 4% in sales in the most recent year surveyed. Ethane, 35.2% of total NGLs, edged up 3.1%, and pentanes plus (natural gasoline and other heavier hydrocarbons), with 8.4% of NGL sales, climbed 7.6%.

At the same time, total propane sales of all types dipped about 0.7% in 2012 from the prior year, shedding nearly 1.3 MMgal. to stand at just under 17.8 Bgal., which was down from the almost 17.9 Bgal. sold in 2011. PADD 1, the East Coast, gave up 3.7 MMgal. to fall almost 11.7% for the year. PADD 2, the Midwest, shed 3.9 MMgal. to slide 12.5%. Conversely, PADD 3, the Gulf Coast, captured an additional 9.4 MMgal. to advance 10.3%. PADD 4, the West Coast, Alaska, and Hawaii, sloughed off 5.7 MMgal. to flatten 12%. PADD 5, the Rocky Mountain region, was 1.5 MMgal. lower for a loss of nearly 12.7%.    

API state rankings for 2012 odorized propane sales show Michigan leading the nation in the residential sector, representing 7.1% of the segment with 2.88 MMgal. sold. Close behind is California with 2.14 MMgal. and a 5.3% residential market share. Following are Wisconsin, 2.07 MMgal. and 5.1%; Illinois, nearly 1.94 MMgal., 4.8%; and Minnesota, 1.8 MMgal. and a 4.4% slice. Together, the five states represented 26.6% of the residential sector in 2012 with 1.08 Bgal. sold.

Leading the commercial sector was California, with Florida, Texas, North Carolina, and Pennsylvania trailing. California, with 9.35 MMgal. sold, captured 6.3% of the market, with Florida, 9.13 MMgal. in sales, garnering 6.2%. Texas posted 7.57 MMgal. of commercial sales and held 5.1% of the market; North Carolina, 7.53 MMgal. and just under that 5.1% mark; and finally Pennsylvania, almost 7.05 MMgal. with 4.8%. The 4.06 MMgal. sold cumulatively by the states represented 27.4% of the commercial market.

Number one in the agricultural sector was, once again, Iowa, with North Carolina, Minnesota, California, and Illinois in pursuit. Of the 38.9 MMgal. sold and a 48.2% market share for the five states, Iowa reeled in 12.0 MMgal. and 14.9% of agriculture sales. North Carolina took 12% with almost 9.7 MMgal.; Minnesota, 8.7%, 7.03 MMgal.; California, 6.5%, 5.24 MMgal.; and Illinois, 6.2%, with nearly 5 MMgal.

In terms of overall odorized propane sales in all categories, California for the second year, was ranked first, followed in descending order by North Carolina, Michigan, Illinois, Texas, Iowa, Pennsylvania, Minnesota, Wisconsin, and New York. Of those 10 leading states, however, and not surprisingly, none exceeded prior-year sales and all posted declines.

By sales sector, API sees residential numbers off 19.2% in 2012 compared to 2011, down nearly 9.7 MMgal. Commercial sales dropped 4.9% to give up about 7.6 MMgal. Sales to retailers plunged 26.75% to hollow out volumes by nearly 9.2 MMgal. Industrial sales, meanwhile, cratered 21%, approaching 1.36 MMgal. On a brighter note, the internal combustion sector marked a 24.8% upswing for the year that represented more than 12.2 MMgal. of additional sales. Agricultural sales also rose, but modestly, edging nearly 0.74% higher year over year, a rise of a little over 5.9 MMgal.

For a further breakdown on U.S. sales of odorized propane, go to www.bpnews.com.

An Arctic Blast… And Then Some

The exceptionally cold start to this winter has had a strong impact on dealers, as well as the energy market in general in many states. Although residents in various cold-weather states are accustomed to dealing with extreme temperatures, residents of Oklahoma might typically see only a couple of cold-weather spurts each winter, and usually not in early December.



This past December was different, as Oklahoma saw temperatures fall into the teens, and the chilly weather continued in January. The conditions prompted Oklahoma Gov. Mary Fallin on Jan. 6 to declare a Liquefied Petroleum Gas Emergency and issue an exemption to 49 CFR 390-399, which includes hours-of-service (HOS) regulations.