A Big Step

By Roy Willis, CEO, Propane Education & Research Council (PERC)

The Propane Education and Research Enhancement Act of 2014 (PEREA) was signed into law by President Obama on Dec. 18. It capped a successful legislative year for the National Propane Gas Association and the propane industry.

RoyWillis 250The new law changes a key propane price input into determining whether the activities of the Propane Education & Research Council (PERC) will continue to be restricted to research and development, training, and safety matters, as they have been since 2009. The restriction of our consumer education activities will remain in place until the Commerce Department conducts a new analysis that uses that key price input and finds that propane prices are below the statutory threshold.

Unless the department changes the underlying formula for the price analysis, I’m confident the restriction will be lifted using the new propane price data. For PERC, removal of the restriction would open the door to a more robust communication strategy with consumers in each of our market segments.

We’ve begun looking at our existing programs and how they might be modified, made more efficient, or replaced once the restriction is lifted. We also have started considering ways to use an unrestricted public education authority to support expanded use of propane in residential, commercial, agriculture, autogas, landscaping, and other off-road market segments.

Under restriction, PERC’s outreach in the residential market is primarily training programs for construction professionals, participation in homebuilder trade shows and conferences, an appliance incentive program, and a cost-sharing effort with the states for appliance rebates. If the restriction is lifted, PERC will consider new communications outreach to people buying, building, and renovating homes.

What is certain is that growing gallons through greater off-peak and year-round demand is vital to the long-term economic viability of the retail propane business.

With that reality in mind, the Council, the Advisory Committee, PERC staff, and key contractors will be considering options and developing proposals that, ultimately, we will present to the industry for its input. Our aim is reaching a consensus on the best path forward.

Passion for Propane — Commentary By Charles Robertson

What do I love most about our propane industry? The relationships that are built from conducting business, and the friendships that are fostered as we all strive to do our best for our families, our neighbors, and the teams we create within our businesses. At the end of each year, we know as an industry that we heated millions of homes, carried people and products safely throughout this great land, and did it more efficiently and with lower pollution levels than many other energy products. Propane—what an amazing product!
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The technology improvements in the propane autogas industry are simply impressive. Great advancements continue in the larger truck engines. The small-engine enhancements that are being utilized for lawn and irrigation are second to none. We are truly coming into our own as an industry with better products that are environmentally superior. It is our time!

However, this great product is being challenged on many fronts—government restrictions, permitting issues, hours-of-service restrictions, driver training, supply constraints, pipeline tariff increases, and crane training, to name a few. None of these challenges are insurmountable, and I would strongly suggest we can turn many of them into opportunities. The million-dollar question is, how do we accomplish that?

Our industry continues to struggle as we have such a small voice in the “Energy World” when compared to coal, natural gas, nuclear, or the electric industries. Even the not-yet-efficient solar and wind industries have caught the eye—and ear—of government. Billions of dollars have been allocated to support their growth. Does anyone doubt that solar and wind would be severely challenged on their economics if not for government handouts? I am not proposing government handouts for propane, but what I am suggesting is for us to get more involved — to get more involved in the one organization that is battling on our behalf, the National Propane Gas Association (NPGA).

I have to admit, when a supplier from the past approached me to get involved on an NPGA committee, the Propane Supply and Logistics Committee, I was hardly chomping at the bit to join that group. I have been blessed with being involved in our industry for over 25 years, but not previously with NPGA. My prior perception held that NPGA was simply a group of retailers that got together to discuss our challenges with few, if any, real results coming from those talks.  

I write this article to inform you that I was simply wrong—something we consultants do not admit very often. After attending my first set of meetings, I was very impressed. NPGA, led by Rick Roldan, is a well-oiled machine. The experience, leadership and organization, integration with our retail network, and the never-ending communication that I see between NPGA, our state associations, and government agencies is — to steal a word from my son — awesome. I am proud our company has recently joined the NPGA as a member, and even more proud now to have been asked to serve on a committee.  

By understanding our challenges, and working directly with government agencies, we have a voice. As I mentioned in my opening, what I love most about our industry, and what makes it so unique from others, are the relationships that are built from the work we do together and the accomplishments we relish as we get through the battles we face as an industry. NPGA is forging relationships with senators, House representatives, and their staffs. These decision-makers are being made aware of our challenges, and can either assist us in overcoming them or at least not create more impediments that limit us.

We have just had an opportunity to vote in our mid-term elections. I hope you got involved and voted. I hope you wanted to be part of a process that helped create and keep our country strong. I believe the message of the vote’s outcome was to “not continue on our current path.” The Senate has changed hands. There will be new people in office and new committee leadership that I believe will be friendly to our cause—because we have a good story to tell.  

With this change and current opportunity, our industry must do more to build on relationships. Many of us have family members that may have a desire to continue the family business. I would submit that with strong, professional representation we can secure that future for those following us. So my message is to get involved—join your state association and support NPGA, our voice in Washington. Getting involved in NPGA will prove to be a worthy investment.


Charles Robertson founded Twin Feathers Consulting (Overland Park, Kan.) in 1998. The company is entrusted with managing more than 150 MMgal. annually, focusing on clients’ supply security and margin enhancement. Robertson began his propane career in the NGL department at Amoco. He has more than 25 years of experience in the propane industry.

Acquisition Expands Westport’s Stake In Direct-Injection Technology

Westport Innovations (Vancouver, B.C.) is expanding its stake in the propane direct-injection market for trucks and passenger cars as a result of the natural gas vehicle company’s December acquisition of Prins Autogassystemen (Eindhoven, the Netherlands). Responding to BPN’s questions regarding the business transaction, Westport executive vice president Mehran Rahbar said Prins has made major investments in direct-injection technology, and that the shift to this technology in the passenger car market has just begun.

“We foresee a very good opportunity for growth in numbers and market share in this market,” Rahbar said. “Furthermore, with the experience and strength of both companies, introduction to new markets with existing products will be faster and more efficient. Our combined engineering resources will keep a faster pace in technology and innovations and further refine the current product lineup for introduction to new or existing markets. This strategy applies to both passenger car and truck markets.”
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Westport Innovations Inc., which engineers natural gas engines and vehicles, announced on Dec. 2 that it acquired Prins Autogassystemen Holding B.V. for approximately $15.1 million. Prins’ operations in Europe will be combined under the Westport Applied Technologies business unit.

Utilizing its extensive experience with natural gas direct injection, Westport will offer two products from Prins that Rahbar noted will “cover all direct injection needs.” Those are the DLM 2.0 system, which provides liquid propane injection through high-pressure original equipment gasoline injectors; and the VSI 2.0 system, which provides vapor propane indirect injection. Prins recently won the World LP Gas Association’s Innovation Award for its development of the Prins Dieselblend 2.0 system. The dual-fuel diesel blending technology creates an average blend rate of 20% to 30% propane and 70% to 80% diesel (BPN, October 2014, page 29).

Bart van Aerle, CEO of Prins, said about the acquisition, “Together, we can create the best-in-class alternative fuel systems across multiple fuel platforms and deliver on superior technology and performance characteristics.” Prins offers alternative fuel systems for bi-fuel, mono-fuel, and dual-fuel applications using LPG, CNG, and LNG. Westport recognized Prins’ “deep engineering and research and development capabilities—extensive multidisciplinary knowledge of systems, software, engineering, electronics, testing, calibration, and certification.”

The Prins vapor sequential injection system is offered in the United States by Alliance AutoGas, a national consortium of propane marketers, equipment providers, and certified conversion centers to encourage companies to add propane-fueled vehicles to their fleets. Rahbar reiterated to BPN that the Prins/Alliance partnership will continue. Stuart Weidie, president and founder of the alliance, agreed, telling BPN, “Blossman Services Inc.’s long-term agreement as the United States importer of Prins vehicle technology remains in place, and activities related to expanding our portfolio of certified vehicle platforms will continue.”

Westport and Prins are already familiar with one another. During the past year, the two companies have worked as a “supplier-customer” partnership on an original equipment manufacturer (OEM) project, although Westport would not elaborate on details of that partnership. However, the relationship led directly to mutual interest for closer technology collaboration. This seems to be a natural transition for Westport, as two Italian companies in Westport’s applied technology group, Emer and OMVL, have been active in the LPG business for several years.

“As 60% of the world propane is derived from [natural gas], and with production of bio-propane in coming years, the availability of propane will grow,” Rahbar noted. “This will provide a good foundation and prospect for propane as a good alternative, and more viable source of energy for engine combustion and its related technologies. For passenger cars, the storage of propane is simpler, fueling duration is shorter, infrastructure is less costly, and system costs are lower compared to CNG. In parallel, the characteristics of propane, as fuel, [are] very similar to gasoline.”

Roush F-650 Propane-Fueled Bobtail On the Road; F-750 Coming Soon

What options does a propane company have when it does not need a propane-fueled bobtail as large as 33,000 GVW with a 3200-gal. barrel? Several smaller, independent propane marketers are now using the new F-650 propane-fueled bobtails from Roush CleanTech (Livonia, Mich.) in their delivery fleets. Roush’s F-650 handles barrels up to 3000 gallons with a GVW up to 30,000 lb. For those that need the larger bobtail, Roush plans a September release of an F-750 propane-fueled bobtail with the higher GVW and that can handle the larger barrel.
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“A lot of propane marketers run a 3000-gallon-or-smaller barrel on their bobtail, so [for them] the F-650 works just fine,” said Todd Mouw, vice president of sales and marketing for Roush CleanTech.
 
Williamson LP Gas (Dayton, Texas) is a good example of a company that uses the bobtail delivery trucks with barrels smaller than 3200 gallons. It has been in business since 1953, and all of its propane delivery trucks have run on propane since its inception. Williamson has outfitted its Roush propane-fueled bobtail with a 2600-gal. barrel.

“We’ve always run propane, and we wanted to stay with propane because that’s what we sell,” said route manager and driver Richard Till. “We carry our fuel on the back of our trucks.”

Till, whose company has owned the Roush bobtail since October and had put about 2500 miles on it as of mid-December, stated that the bobtail “does everything we want it to do.”

The F-650 bobtail has been in the works at Roush for about two years. Although the company knew the vehicle was on the small side for what many of the larger propane companies wanted, it also realized that Ford would not offer a 33,000 lb GVW vehicle with a 6.8L, 3V engine until 2015. Recognizing the potential, Roush released its F-650 for the smaller bobtail market about a year ago. “In 2015, Ford will introduce the F-750 on gasoline with the gas prep package for propane, which we’ll then convert to propane, which will get us to that magical 33,000 GVWR number,” Mouw noted. The 6.8L 3V engine and commercial grade 6R transmission will power the F-650 and F-750.

The bobtails feature the same engine and transmission combination available in more than 4200 propane-fueled Bluebird school buses on the road today, which are rated at 33,000 GVWR. Mouw stated that because the engine and transmission combination is in many of the Ford commercial products, that large volume of production translates to significant price advantages for the Ford chassis over competitive class 6-7 chassis.

Roush has produced the bobtail with price in mind for cost-conscious propane marketers. At the vehicle’s launch date, the company offered two tank configurations. One features tanks on the passenger and driver’s side, with 45 total usable gallons, while the second includes dual tanks with 83 usable gallons. And recently, in response to customer requests, Roush added a third option with a single long tank on the driver’s side offering 50 usable gallons. The single-tank option provides an additional advantage for cost-conscious marketers. The price will be under $68,000 for the base chassis with the Roush CleanTech fuel system, which Mouw noted is at least $2000 less than a comparably equipped diesel chassis from one of Ford’s competitors in the Class 6-7 space.

Because some marketers might still be skeptical about purchasing a propane-fueled bobtail after the technological issues that occurred in the past, Roush has worked to alleviate those concerns. It invested more than $35 million to make its technology robust enough for the toughest duty cycles. The same engine/transmission combination worked well for school buses, so Roush is confident it will work well in the bobtail application. More than 375 Ford repair locations are capable of repairing the vehicles. Mouw believes the F-650 competes well with the 30,000 GVW option of the Freightliner S2G propane-fueled bobtail, and the F-750 will also compete well with the S2G’s 33,000 GVW version.

Williamson LP Gas has had a good experience with the Roush vehicle so far. “It’s got all the power you want,” Till stated. His company’s driving routes include many stop signs in heavy residential traffic, and the truck’s automatic transmission has worked well in those situations.

“With a standard transmission, a lot of times you can’t get across, and you’ve got to sit there and wait until you have enough time to get across and shift gears,” commented Till, who has been with the family-owned business since 1991. “But with the automatic transmission, you have the get up and go.” The company does not have an on-site fueling station, simply fueling the vehicle from the barrel when needed.

“We’ve mostly had Chevys. This is our first Ford,” remarked Till. “We haven’t had to do any mechanical work, but it seems to be easier to work on, with access and things like that. The Ford is a lot cheaper than the Freightliner. You have to look at economics and make sure the vehicle can do what you want it to do for you. It’s done everything so far. We’re pleased with the truck.”

Growing Gallons With The Outdoor Room Trend

Outdoor kitchens and outdoor rooms have been a growing concept, having become one of the most desirable amenities for new home buyers and home remodelers. With people leading ever busier lives, they appreciate their time at home.

“You’ve heard the term, ‘staycation.’ That’s part of the trend,” said Jerry Scott, senior vice president for RH Peterson (City of Industry, Calif.), which sells home products such as grills, fire pits, and gas logs that run on propane or natural gas. “What they are doing now is making their home a nicer, more enjoyable place to be, and the outdoor room is part of that concept.” He notes that the outdoor room evolved from an outdoor grill to an outdoor kitchen with cookers and refrigerators, and now to an outdoor room with a dining area and various fire features to augment the outdoor stay.
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The company’s customers choose the propane option over natural gas for those products about 70% of the time, although those who are undergoing a major remodel or landscaping project or building a new home choose natural gas more often. But with most of the customers placing hearth products into an existing yard and wanting to enhance that setting, propane is a much more convenient choice to fuel outdoor products in that situation.

Although RH Peterson does not sell patio heaters, Scott sees a continuing trend toward patio heaters using propane. “Even gas lights can be propane operated,” Scott stated. “So there is a lot of added applicability in a residential setting for propane, even if the customer has natural gas service.”   

To take advantage of the outdoor living trend, marketers should let their customers know about the availability of the products that use propane. That can be done with a bill stuffer stating something to the effect of “Enhance your back yard living experience.” Another method would be to make a flyer available that technicians can provide to customers on service calls.

Scott noted that his company provides bill stuffers and other promotional products propane marketers can use to steer their customers toward appliances that run on propane. “One thing we found is that propane companies have a high level of trust, much like other utility companies. If they are promoting or supporting these propane products, homeowners are more likely to listen to that than it would be for us, because we’re in business to sell those products.”

Customer newsletters can be a great tool to discuss the benefits of outdoor products that use propane. Marketers could offer incentives to customers, such as a free tank of propane if they purchase a new grill.

Fireplaces using propane fueled logs are another product that has seen increased sales in recent years. Burning gas in a fireplace is much more economical than wood, Scott pointed out, and it’s more convenient. With a wood fire, the homeowner must clean out his fireplace from the previous use, then bring more wood in, and start the kindling. When he is done using the fireplace, he must be cautious until the fire goes out completely.

“With a gas log set, when you want it burning, you turn it on. When you’re done with it, you turn it off. There’s no hassle and no ashes to worry about, and people who switch from burning wood to burning gas in their fireplace find that they use their fireplace much more often because it’s much more convenient.”

Environmental benefits are well-documented. RH Peterson hired a researcher to conduct a study comparing the emissions of wood fire to a gas log fire. It showed that gas logs eliminate 99% of the particulate matter and toxins that a wood fire produces.  

“A gas log is much more friendly to them than a wood fire because of the odors and smoke that tend to spill out into the room,” Scott added. “Here’s an area that’s not your traditional appliance for burning gas, but it’s one that the homeowners enjoy and it’s another burner tip for the home.”