Women in Propane-Sponsored "Defining Moments In Leadership" Huge Success at NPGA Southeastern Convention

At the recent NPGA Southeastern Convention & International Propane Expo industry trailblazers shared with a well-attended audience "defining moments in leadership" from their personal and professional journeys at the Women In Propane-sponsored roundtable and networking event.

The "Defining Moments In Leadership" speakers included Miriam Cavagna, Marketing & Communications Director, Cavagna Group; Peter Gibbs, CEO, Touchstar Corporation; Natalie Peal, Publisher, Butane Propane News, and Alison Abbott, Communications Director, World LP Gas Association.
Alison Abbott WIP2015

In addition to hearing inspirational, touching and sometimes humorous examples of leadership challenges speakers had encountered and conquered during their careers, attendees also gained insight into several personal experiences that had strengthened speakers’ leadership abilities from Cavagna, Gibbs and Peal. Ms. Abbott discussed the progress currently underway to launch a Global Women In Propane Network. Speakers also shared with the audience leadership traits they believed were necessary to be a successful leader. 

Following the four inspiring speeches, participants split into small groups to define and discuss the various characteristics and values exhibited by leaders. Roundtable groups were moderated by Women in Propane (WIP) members representing different segments of the propane industry - family businesses, association leadership, suppliers, and small and large marketers. Each shared their key discussion points and best practices with the full group. A networking reception concluded the event.
Natalie Peal WIP2015

The Women in Propane Council was established to provide positive opportunities for all members of the industry to support the advancement and success of women in every scope of business operation and professional development.

WIP Reception

Breaking News: PERC Restriction Lifted

Propane Education & Research Council (PERC) President & CEO, Roy Willis, announced at the National Propane Gas Association (NPGA) Southeastern Conference on Saturday, April 11, 2015, that the U.S. Department of Commerce restriction on PERC's consumer education programs had been lifted.
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BPN will feature expanded coverage of this news in the coming days along with other exciting convention coverage.

Program Keeps Marketer Stocked Up

In early 2014, Blossman Gas (Ocean Springs, Miss.) began looking for ways to ease its locations’ work in managing inventory. Andy Carnes, area sales manager for Bergquist and project manager for Blossman’s inventory replenishment, explains that each Blossman location is unique, with different inventory needs. In this case, each location needed to be looked at individually, and an overlying plan put in place that would handle the requirements of its numerous outlets.
Bergquist Blossman

Bergquist, a wholesale propane equipment company distributor headquartered in Toledo, Ohio, went live in September with a proprietary stock replenishment program for Blossman Gas to keep propane products in stock and limit the time customers must wait for equipment. The program involves use of a computerized replenishment application that manages inventory. But even before setting up the program, the two companies had to work out minimum and maximum levels for each piece of equipment in stock.

The process starts when Bergquist ships inventory to the Blossman locations, where employees use the application to track daily use. The system stores the information and transmits it in a batch once a week. An invoice is automatically created once the batch is received and is used to send a monthly invoice to Blossman. As needed, Bergquist will replenish the inventory at the office.

To use the program, an employee at the location employs a hand-held scanner and a tablet, or the system can operate on a mobile phone. The employee logs in to an inventory warehouse that shows stock levels of equipment such as brass fittings, ball valves, regulators, pipe and pipe fittings, copper tubing, tank valves, gauges, and other installation equipment. The employee then submits batches with stock-level information to Bergquist. Blossman submits the batch once a week, and the system produces a replenishment order.

“This stock replenishment program is a perfect example of a customer having a need, going to a supplier with that need, and the supplier doing everything in their power to meet that need,” said Randy Doyle, CFO of Blossman Gas. He added that by this time next year, Blossman hopes to have the program fully integrated throughout the entire company.

Dean Moulder, branch manager for Blossman’s Crystal Springs, Miss. location, said the system has worked well so far. “It’s nice to have parts and regulators all the time and not worry about a job coming up and not having the parts.”

Odorized Propane Sales Jumped 14.1% in 2013

Sales of odorized propane in the U.S. climbed by double digits in 2013 compared to the previous year and rose 14.1%, according to the “2013 Sales of Natural Gas Liquids and Liquefied Refinery Gases” survey recently released by the American Petroleum Institute (API). API reports sales jumped to more than 8.83 Bgal., up from 7.74 Bgal. in 2012. The year-over-year increase broke a six-year losing streak for sales, which last registered an improvement in 2007. For the five-year period from 2008 through 2012, sales figures showed an erosion of more than 2.2 Bgal., representing a 22.2% retreat.

Residential propane, which includes recreational vehicle sales, grew to 4.84 Bgal. from 4.07 Bgal., and were up nearly 18.9% for the year. Commercial sales, at about 1.66 Bgal. in 2013, increased from 1.48 Bgal. and showed growth of almost 11.9%. Agricultural sales posted a sharp 31% jump for the year, stretching to 1.06 Bgal. compared to 80.9 MMgal. in 2012.
API OdorizedPropaneSales

However, not all sales segments were winners. Sales to retailer dispensers — sales to bottle fillers, cylinder exchange programs, campgrounds, and hardware stores, among others — trailed 2012 by 10.8% and fell from 25.08 MMgal. to 22.4 MMgal. Surprisingly, internal combustion sales also declined, sliding 6.9% to 57.3 MMgal. in 2013 from 61.5 MMgal. a year earlier. Industrial sales were off 6.3%, dropping from 50.8 MMgal. to 47.6 MMgal. year over year.

States leading residential odorized propane sales for the most recent reporting period were Michigan with 39.1 MMgal. sold, representing 8.1% of the U.S. residential market. Wisconsin was second with sales of 27.8 MMgal. and a 5.8% market share, followed by Illinois, 26.8 MMgal. and 5.5% of residential sales. California was fourth with 22.0 MMgal. and a 4.6% share. Michigan placed fifth with 21.1 MMgal. and a 4.4% share. Combined, the five states represented 28.3% of U.S. residential sales in 2013 with a total of 1.37 Bgal. sold.

Commercial sector leaders were California, Florida, Pennsylvania, Texas, and Maine. California, with nearly 89.0 MMgal. in odorized sales, held a 5.4% share, while Florida, 85.0 MMgal., had 5.1%. Pennsylvania was next with a 5% share and 83.1 MMgal. in sales, followed by Texas, 82.0 MMgal., 4.9%, and Maine, 77.6 MMgal, 4.7%. Together, the states represented 25.1% of the commercial market and nearly 41.7 MMgal. sold.

Agricultural odorized propane sales in 2013 were led by Iowa, standing tall with a 17.1% U.S. market share and more than 180.1 MMgal. sold. Minnesota was next with 11.6% of the total and 122.5 MMgal. in sales. Illinois tallied nearly 83.3 MMgal. sold and 7.9% of the market, followed by North Carolina with 82.2 MMgal. in sales and a 7.8% share. California sold almost 54.8 MMgal. and represented 5.2% of the market. The five states represented nearly half of agricultural sales at 49.4% and sold more than 52.3 MMgal.

State and PADD statistics showed Arizona the leader in the odorized internal combustion category with 64.0 MMgal. sold. Texas was second with 42 MMgal. in sales. Illinois placed third with 41 MMgal., trailed by Michigan, 26.3 MMgal., and Missouri, 24 MMgal.
API OdorizedPropaneSales2a
The API survey shows the average U.S. residential account in 2013 used 394 gallons of odorized propane, up from 362 gallons in 2012 for an 8.8% gain. Commercial accounts were credited with using an average 1984 gallons, a 7.5% increase from 2012’s 1846 gallons. Sales to retailers in 2013 averaged 1134 gallons, off from 1547 gallons a year earlier for a 26.7% decrease. Internal combustion fuel sales, at an average 3180 gallons, fell from 3927 gallons in 2012, registering a 19% decline. Industrial odorized propane sales averaged 3021 gallons per customer account for the most recent reporting period, rising 7.7% from 2803 gallons in 2012. The average agriculture account sale in 2013 was pegged at 3364 gallons, rising from 2669 gallons the previous year to climb 26% year over year.

The Midwest far outpaced other regions in sales to residential customer accounts in 2013 with an average of 623 gallons sold. The Rocky Mountain region placed second with 454 gallons, followed by the West Coast (including Alaska and Hawaii) with 357 gallons. The Gulf Coast and East Coast were in a virtual tie with 294 and 293 gallons, respectively, according to API. With the exception of the West Coast, which saw average residential sales decline, all other regions posted year-over-year residential sales gains.

In the commercial account sales category, the Midwest led once again with an average of 2283 gallons sold. The Gulf Coast was close behind with 2221 gallons. Those regions were followed by the Rocky Mountain region, 2186 gallons, the West Coast, 2091 gallons, and the East Coast, 1823 gallons. Again, most regions showed increased sales compared to 2012. However, 2013 Rocky Mountain commercial sales trailed the prior-year total.

The Rocky Mountain region was number one in average gallons sold in the sales to retailer customer account category with 1749 gallons. The West Coast tallied 1433 gallons and the East Coast 1431 gallons, while the Midwest and Gulf Coast were nearly tied with 759 and 728 gallons, respectively. In a year-over-year comparison, only the Midwest recorded an increase in sales, which was minimal. All other regions’ average sales to retailers declined.

As noted, overall average internal combustion customer account sales were down 19% in 2013, and all regions reflected that loss by posting lower year-on-year numbers. Nonetheless, the Gulf Coast placed first with an average 4061 gallons sold, followed by the West Coast, 3540 gallons, Midwest, 3221 gallons, East Coast, 2792 gallons, and Rocky Mountain, 2020 gallons.

The industrial account sales leader was the West Coast with an average of 3471 gallons sold per account. Runners up were the Gulf Coast, 3299 gallons, Midwest, 3184 gallons, East Coast, 2536 gallons, and Rocky Mountain, 1959 gallons. While average industrial customer account sales dipped in the Rocky Mountain region, all other regions in 2013 posted higher numbers compared to 2012.

Finally, the Midwest edged out close competition to place first as the agriculture customer account leader with an average 3772 gallons sold. Not far behind was the West Coast with 3399 gallons and the Gulf Coast with 3394 gallons. The East Coast trailed with 2802 gallons, followed by the Rocky Mountain region with 2511 gallons. With the exception of the East Coast, which experienced a modest decline, all other regions showed improved annual growth.

The institute reports that overall sales of all natural gas liquids and liquefied refinery gas totaled 46.8 Bgal. in 2013, representing an increase of 6.5% from 2012. Propane sales of all types, which represented 41.1% of all liquids sales, the largest proportion, climbed 8.2% from 2012 to reach more than 19.2 Bgal. Ethane sales, which held a 34.5% share of all liquids, grew 4.3% to stand at 16.1 Bgal. Butane sales climbed 11.2% and settled at 7.7 Bgal., representing a 16.6% share of liquids. Finally, sales of pentanes-plus—natural gasoline and other heavier hydrocarbons—at 7.9% of total NGL and refinery gas sales, lost ground and dipped 0.9% to 3.67 Bgal.

The annual “Sales of Propane” survey is sponsored by API, the Gas Processors Association, the National Propane Gas Association, and the Propane Education & Research Council (PERC). The survey provides the oil and natural gas industry detailed data regarding how and where odorized propane is used. Because of the wide variety of uses and dramatic changes that are taking place in consumption patterns, the analysis is aimed at understanding gas liquids markets so strategies can be put in place to ensure availability and operate companies efficiently.

In addition, under the Propane Education and Research Act, the national legislation that created PERC, 20% of assessment collections are eligible for rebate back to the states. Each state’s allocation of rebate funds is based on the latest API data for residential, commercial, industrial, internal-combustion engine fuel, agricultural uses, and sales to retail dispensers that are compiled using responses to the survey. API holds data provided in strict confidence, and only aggregates of three or more companies’ data is published.    —John Needham

Creating Market-Based Opportunities for Clean Cooking

There’s a nation right here in the Americas with less than a 5% share of LPG use among its population of 10.3 million. Competition from natural gas doesn’t factor, even in urban areas where the majority of the populace resides. It isn’t available. LNG import infrastructure is being constructed, but it’s aimed at serving the industrial sector. In fact, 95% of households still cook exclusively with charcoal. And with less than 2% forest cover remaining across the Caribbean nation, and 30 million trees being cut every year, there is urgency for wide adoption of an environmentally clean alternative energy source.

The market opportunity for LPG, therefore, seems evident, especially since domestic cost comparisons between charcoal and LPG are favorable. But there are obstacles, or more appropriately, barriers, to expanding the fuel’s use in Haiti. Purchasing power is circumscribed, with 76% of citizens living on less than $2 a day. Further, there are no credit mechanisms for purchases of stoves and tanks. On the commercial side, equipment isn’t widely available at retail, the distribution cylinder exchange network is weak, and cylinder inventory is old. Finally, the government cannot afford broad subsidies, and the lack of a transparent regulatory program acts to discourage private investment in the sector.

Confronting those challenges is SWITCH, an organization laboring to break barriers blocking clean cooking and enable the francophone country to passons au vert — go green. Its goal: establish a durable and profitable mechanism that allows most Haitian households to permanently convert to LPG, thereby improving livelihoods, health, and the environment. The social marketing and manufacturing enterprise, which seeks to provide a market-based solution to empower women and families by substituting propane for charcoal as a cooking fuel, does not typically operate with donations, but rather with the support of remittances from the Haitian diaspora, largely based in Florida.

SWITCH outlines that transfers to Haiti amounted to $2 billion in cash and an additional $600 million in other in-kind contributions in 2013. More than 3 million Haitians live abroad, 400,000 in Florida alone. The goal is to create an extensive national redeeming network in cooperation with Haitian gas stations and other retail locations, among them hardware stores and food warehouses, wherein family members and designated beneficiaries can access LPG equipment and fuel through offshore remittances.  

The business model includes selling stoves — all with cylinders — to Haitians abroad to be delivered to residents in their home country, thereby overcoming the primary barrier to LPG entry for most Haitian families — the cost of an LPG starter kit. Offered is a complete kit for $100, as well as a premium upgrade for $160. SWITCH, a partner in the United Nations’ Global Alliance for Clean Cookstoves, which supports clean cooking solutions worldwide, has teamed with Island Television, a company that produces and airs programming for the Haitian diaspora on cable and via online livestream in South Florida, to promote its efforts. In total, there are 10 available stove models, modified and designed to fit Haitian needs. Btu-efficient burners, which are imported, are chosen to win a comparative cost to charcoal. Complete kits include accessories and a filled 20-lb tank.

Lending is also in play. With financing key for working-class households to acquire cooking equipment, SWITCH has partnered with a bank to offer green credit. In addition, employers can enroll their employees in a plan for 10 monthly payments, with employers guaranteeing the loan by direct payroll withdrawal.  

Speaking at October’s World LP Gas Forum in Miami, including its Women in Propane panel and “The Future Starts Now” session, Kalinda Magloire, SWITCH SA board chairwoman, outlined that Haiti is an early-stage market with annual consumption pegged at about 2.8 kg per capita. The island nation imports 28,000 tons of LPG a year versus the more than 1 million tons its immediate neighbor, the Dominican Republic, receives to serve its population, which is roughly equal to Haiti’s.

Reached at SWITCH offices in Delmas, Haiti, Magloire elaborated that many in her nation have informal, rather than concrete home addresses, and no land telephone lines. As a result, lending institutions are reluctant to extend credit absent fixed means of contact, whether by phone or permanent address. Credit, therefore, is expensive, if it’s available. It follows that costs exceed the budgets of most households. As well, Haiti has no credit bureau, and an extremely low credit portfolio.

“The idea behind SWITCH is to meet the most important need — access — through credit, remittances, and some subsidies,” she said. “The state of Haiti cannot tackle the problem. We are introducing a market-based solution.” She adds that Haitians are knowledgeable and accepting of LPG and its advantages, but nevertheless lack access. Further, the fuel lags in its exposure and ready availability at neighborhood mom-and-pop stores, whereas charcoal is handily available and omnipresent at such neighborhood retail centers, ubiquitous gathering places for purchasing and information sharing.  

This lack of credit access was made worse recently. A massive magnitude-7.0 earthquake struck the country in January 2010, with an epicenter just 15 miles west of the capital, Port-au-Prince, the nation’s most populous region. Estimates placed more than 300,000 killed and some 1.5 million left homeless.

SWITCH isn’t just serving households. The organization has a manufacturing arm that fabricates stoves for street vendors, as well as making bases for small imported models. Assembly is also provided for imported household units. Goals are set. Progress is measured. SWITCH is targeting 8000 to 12,000 street vendors in the metropolitan Port-au-Prince area alone, and has set a goal of switching 1000 a year from charcoal to LPG. So far, 750 have received appliances equipped with cylinders in just over a year’s time. The program offers three types of stoves, at a lower price than market value, payable over a year.

In addition, the organization’s schools and orphanage program is focusing on 800 facilities, and in partnership with the nongovernmental organization (NGO) World Central Kitchen and the United States Agency for International Development (USAID), among others, is subsidizing conversions. World Central Kitchen chefs are training meal preparation personnel at schools and orphanages. As of late last year, 30 schools had been converted from charcoal to LPG with heavy-duty stoves, with another 90 applications in the pipeline.

World Central Kitchen, founded by Spanish-American celebrity chef and international restaurateur Jose Andres, is the sponsor of Haiti Breathes, which provides funds for the equipment needed for fuel conversion in schools and orphanages. In Port-au-Prince, the NGO has joined with the Zamni Beni orphanage to launch a sustainable bakery that will produce various types of bread products and generate revenue for the orphanage. Among its numerous other activities, in the mountains of Haiti, World Central Kitchens is training a community on cleaner methods of cooking, in addition to constructing a canteen where the community can cook and feed children attending a nearby school. At October’s World Forum in Miami, Andres and World LP Gas Association (WLPGA) president Kimball Chen signed an agreement whereby the association and World Central Kitchen will work together to create good-practices guidelines for the conversion of institutional kitchens from biomass to LPG.

SWITCH, in yet another collaborative initiative, has joined with the government of Haiti and USAID to establish the Charcoal Free Villages program, targeting 2750 social housing areas. The integrated approach includes a cylinder warehouse onsite, training on safe handling of LPG, best practices, and social adaptation to the new fuel. The organization as of the end of 2014 had already converted 1150 social housing areas, with the charcoal-free project aimed at serving as a pilot initiative to draw lessons learned for a future LPG penetration strategy, this for the country as a whole.

With localized cylinder warehouses, SWITCH hopes to establish a widespread distribution and refill strategy in the heart of bidonvilles—impoverished areas just outside cities. The first phase of the project targets urban areas only, wherein small, local franchisees are guaranteed exclusivity to build and retain customers. Such franchises are being prioritized and adapted to locales adjoining the pervasive network of gas stations throughout the country, hardware stores in secondary cities, and small shops with trained staff, with a minimum of 25 bottles in populous areas. Proximity to the consumer is key, and partnering establishments vary.

SWITCH acknowledges that there are challenges in the future, among them competent inventory management, changes in a national policy framework, legal enforcement and standards for wood cutting in Haiti, and securing partnerships with financial institutions. Immediately, the clean-fuel marketer is seeking partnerships for cylinder provision and a partner for inventory refilling, in addition to know-how regarding those two areas of expertise. Moreover, the future success of SWITCH initiatives depends, not only on the support of the Haitian diaspora, but also on the adoption of LPG as the primary cooking method by Haiti citizens. To this end, education and social sensitizing are critical to success, and a major emphasis.

The economic argument is in LPG’s favor. WLPGA and SWITCH report that charcoal is more expensive than LPG in Haiti, while underscoring that charcoal use is unsustainable. Currently, a household gathers two cans of charcoal a day, with mothers, ever at the forefront of domestic cooking, and their children walking long distances to garner two cans of charcoal a day. For one day’s cooking, the cost is $1.50. LPG use, conversely, costs $1 a day, so potential savings of $175 a year are possible. Fuel gathering consumes a great deal of time for women and children, limiting other productive activities and takes children away from schoolwork. WLPGA adds that households switching to LPG will also contribute to gender equality and help empower women, freeing up their time for income generation and education.

Added to the benefits of switching to LPG is household health, in Haiti and elsewhere. Cooking for Life, a global campaign of WLPGA — SWITCH is a partner — comments that the global health community has largely overlooked the burden associated with indoor air pollution. A white paper published by the association reports that, worldwide, indoor air pollution is among the top 10 leading causes of avoidable deaths. Among environmental causes of death, it is second only to contaminated waterborne diseases.

Additionally, the World Health Organization (WTO) reports that health risks include long-lasting effects on overall health and well-being because of stifled lung development in children. Other health risks include respiratory infections, pulmonary disease, and lung cancer. Emerging evidence also shows that indoor air pollution increases the risk of asthma, tuberculosis, cardiovascular disease, and low birth weight.

Gathering traditional solid fuels is a risk in itself. Those collecting the fuel are generally women and children. The result is children being taken away from activities like studying or attending school. Women, the primary fuel gatherers, are distracted from duties such as childcare, therefore the potential to generate extra income does not exist, concludes the WLPGA white paper. In some areas, like Haiti, gathering biomass also leads to deforestation and a loss of tree resources, causing, according to SWITCH, extreme vulnerability, and accordingly, destruction of cattle, private homes, and infrastructure. In that nation’s case, a permanent loss of 3% of the nation’s productive land a year is in order.

Two million people die each year because of pollution from traditional cooking methods involving solid fuels such as wood and charcoal. That is more than the combined deaths of malaria, HIV/AIDS, and tuberculosis. Burning such fuels releases pollutants into the air, which can cause respiratory infections, pulmonary disease, and even lung cancer. Other risks associated with traditional fuels include deforestation, soil erosion, and risky fuel wood collection, notes Cooking for Life.

Key facts: Around 3 billion people cook and heat their homes using open fires and simple stoves burning biomass — wood, animal dung, and crop waste — and coal. More than 4 million people die prematurely from illness attributable to household pollution from cooking with solid fuels, WTO maintains. More than 50% of premature deaths among children under 5 are due to pneumonia caused by particulate matter (soot) inhaled from household air pollution. Finally, 3.8 million premature deaths annually from non-communicable diseases, including stroke, heart disease, chronic obstructive pulmonary disease, and lung cancer are attributed to exposure to household air pollution.

WLPGA notes that its global campaign, Cooking for Life, seeks to introduce LP-gas as a clean and safe alternative to traditional, yet harmful, fuels used for cooking in developing countries. The initiative aims to involve governments, public health officials, global NGOs, and the energy industry to provide expanded access and support for use of the most-advantaged cooking fuel — LPG. Using LP-gas for indoor cooking ensures healthy air with no pollutants because it is a clean, non-toxic fuel. If a leak were to occur, LP-gas would not contaminate the soil or aquifers in the affected area.

However, in many cases, financing the switch from traditional or established fuels to LP-gas requires backing and funds, the association acknowledges. Countries without stable governments will have difficulties establishing and launching solid conversion programs. Infrastructure is key for LPG distribution, a challenge for many developing nations. Additionally, social norms and tradition play roles in transitioning. Therefore, people need to adapt to new cooking habits.

That transition from traditional solid fuels — wood or charcoal — to modern fuels will bring about the largest reductions in exposure to indoor air pollution. Modern alternatives include non-solid fuels like kerosene, biogas, natural gas, and LP-gas. Among them, LP-gas remains the best option due to its large reserves, minimal environmental impact, and affordability. That last criterion is the driving factor for LPG adoption in the developing world.
Further, in the past, because LPG is a product of both crude oil refining and natural gas production, prices were most closely linked to oil. However, increasingly, this correlation will decline as LP-gas, a natural gas liquid, more commonly becomes associated with production of natural gas. Fortunately, LP-gas is an accessible and easy-to-use fuel, and the transition from charcoal is simple.  —John Needham