The Future of NPGA—Smart Advocacy

As most of you know, 2006 is the National Propane Gas Association’s (NPGA) 75th anniversary. For 75 years, our industry's trade association has been there for us. We have all reaped the rewards of being part of a national organization instead of facing our collective battles alone.

Seventy-five years is a long time, with many achievements marking the passage of these years. From the early days, when it took much work to get our association steadily growing through the Great Depression and World War II years, through the 1970s, when bad government energy policy helped put some marketers out of business, to today’s modern advocacy-focused NPGA, whose work over the last 10 years has saved the industry millions of dollars, we've all been through a lot. And we’ve achieved a lot, too.

In my opinion, our association's biggest achievements have come in the last decade.

The biggest accomplishment was the multi-year reorganization of NPGA into the primary source of solutions for marketers facing aggressive legislators, regulators, and trial attorneys. Although NPGA maintained a Washington, D.C. office since the early 1960s, much of the association's resources were diffused among other non-advocacy programs.

Focusing on advocacy while maintaining leadership on industry safety issues—and creating the Propane Education & Research Council (PERC) to increase the resources spent on non-advocacy issues like marketing, education, and research and development—has paid off in spades for the industry. NPGA's actions over the past decade have led to victories such as the exemption gained from the EPA’s Risk Management Program, regulatory victories at DOT, chemical security exemptions in Congress, and industry-specific tax breaks such as those obtained last year in the energy and transportation bills.

The passage of the Propane Education and Research Act (PERA) in 1996, which established PERC, certainly has been one of NPGA’s top achievements. If not for the tireless efforts of NPGA and its members, this act would not have passed and our industry would still be struggling to promote our product to a national audience. For many years, NPGA worked very hard in the area of market development. But with our limited resources, we were unable to devise an advertising or marketing program that could make an impact. Throughout the 1980s and early 1990s, NPGA’s marketing budget averaged just $235,000 per year. This year, PERC’s marketing budget for consumer education alone is an extraordinary $23,600,000. With PERC’s massive marketing efforts over the past few years, I firmly believe that the typical consumer today is much more aware of propane and its benefits than they were 10 years ago. PERC has allowed the industry to build new markets, develop new technologies, and reach more consumers.

On the association’s diamond anniversary year, I become NPGA’s newest volunteer chairman of the board this month.

My number one goal this year is to implement the new strategic plan. There is much for the association and the leadership to accomplish with our new set of goals and objectives. I would like to work toward implementing the plan’s new partnership agreement between NPGA and PERC. We need to eliminate any redundancies between the organizations and work together to expand our industry.

I believe our new plan also has a larger legislative goal. Our top legislative objective should be to make NPGA capable of responding to the broader external challenges that the industry will face over the next few years. Washington’s focus on a safer post-9/11 America has spilled into our industry’s world and will not stop with the security measures and regulations that have been put into place over the past three years. NPGA must be proactive to prevent initiatives that threaten to over-regulate, over-burden, or over-price our valuable commodity.

I’m concerned that propane will be included in security legislation that will place unreasonable requirements on the industry. As you know, in today’s world, every time a propane cylinder or bobtail is stolen the media is quick to link the theft to a possible terrorist plot. Every time there is a fire or accident involving propane, we read about the “possible” doomsday event that “could have occurred.” Just recently in my state of Georgia a small plane crashed, narrowly missing a propane bulk plant. The big news was not the tragic plane crash or resulting fatalities, but the speculation on what might have happened to the neighboring area if the plane had hit the propane tanks.

Even with all of our efforts to educate the public on the advantages of propane, we have not done a very good job educating the public on the many safety measures we have to ensure that propane is a safe fuel. And I include in this educational effort our federal and state legislators. In my Congressional visits during Propane Days, it amazes me how uninformed our Congressmen and Senators are about propane. We in the industry live with the product and understand why we have relief valves, emergency shutoff valves, and myriad other safety equipment and training we use every day. But the public has no clue about any of this. The public’s perception of propane must change, and it will be up to NPGA's and PERC’s leadership—and all of us in the industry itself—to help educate the public, including the legislative and regulatory communities, about our safe product.

I am a second-generation Rutherford in the propane industry and my son, Mike, is a third. Many of us are second- or third-generation propane people. Would we encourage our children to come into the industry if we did not believe that the future is bright? As the population continues to grow worldwide, the demand for energy will continue to grow. We all should be able to participate in this growth.

We need to understand the global forces affecting our industry today. Today’s high petroleum and natural gas prices are the result of many outside forces acting on the marketplace. Some forces we can control, but we have to also understand that there are some forces that we cannot control. It is up to NPGA to rally the industry around programs that can build markets and resist those who would tell us how to run our businesses.

We must also continue to use our PERC and federal research money to develop new products that create new markets for our fuel. There is much NPGA can do to use its advocacy prowess to help create these new markets. Our association and our industry have, for the last 75 years, risen to the task to overcome our challenges—and we can certainly meet today's obstacles with the same tenacity and ingenuity.

I look forward to my year as NPGA chairman during this anniversary year. I know by this time next year I will be able to write about NPGA’s and PERC's joint successes in expanding the propane market and allowing the propane marketer to function in a business environment conducive to making money!

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