warm thoughts

Concerns about a ripple effect of oil and gas prices this winter were triggered Monday after Russia said one of its main gas supply pipelines to Europe would be shut indefinitely. European gas prices immediately shot up 30% higher on the news. On Friday, prices were up after Russia said that a leak in Nord Stream 1 pipeline equipment would keep it shut beyond a three-day maintenance halt.

Europe has accused Russia of weaponizing energy supplies in retaliation for Western sanctions imposed following the invasion of Ukraine. Russia claims the West has launched an economic war and sanctions have hampered pipeline operations.

As noted two weeks ago, concerns over natural gas supplies in Europe present another huge challenge as demand for U.S. propane to replace natural gas in Europe would likely be a big factor for U.S. retail propane marketers. EIA inventory data last week showed propane at 72.2mmbbls, up from 68mmbbls a week earlier. Year ago levels were at 69.3mmbbls. Analysts see little downside for winter propane prices even if temperatures remain warmer than normal but note that a bump up of a dollar or more could result from strong demand both in the U.S. and Europe. Coverage of all fixed and capped sales is strongly urged by consultants as always but especially given the current situation.

By P3 Safety

Running a propane business means juggling a lot. Daily operations, customer service, safety training, you name it! There’s plenty to think about and meeting regulatory requirements is just one top priority along with a very long list of other priorities. The good news is that there are tools you can use to make meeting your propane regulatory requirements simple and efficient; for example, meeting your DOT 5-year cylinder requalification requirement. Here’s how you can make sure you’re staying compliant with DOT requirements and making the best use of your team’s time and efforts.

What is the DOT 5-year cylinder requalification requirement?

According to 49 CFR § 180.205 from the Department of Transportation, propane cylinders must be requalified or replaced every 5 or 10 years depending on the cylinder type, condition, and previous requalification method. (Ref. 49 CFR § 180.205(d) and 180.209(e)). There are several types of DOT cylinder requalification requirements with varying frequencies, and cylinders that fall under the 5-year DOT requalification requirement are one of the most common for propane companies.

How can I meet DOT 5-year cylinder requalification requirements efficiently?

The best way to streamline the process is by using mobile software to document your propane cylinder requalification requirements. Instead of dealing with paper forms that can easily have errors or be lost in the shuffle, mobile cylinder requalification takes away most of the hassle.

Techs save time in the field by completing mobile forms on a tablet
Error-recognition technology flags any incomplete or inaccurate form fields
Mobile Professor provides an explanation of the code
Techs receive immediate correction and education if needed
Mobile forms are automatically stored in your electronic database
Management receives automatically generated reports for review and proof of compliance
Related Post: Why Policies & Procedures Are So Important for Propane Companies

What’s the next step?

Contact P3 Propane to request a free demo to see how we can change the way you meet your DOT 5-year requalification requirements for good. Click here to request a demo and chat with a team member today.

By ROUSH CleanTech

District: Randolph Township School District

Industry: Education

Location: Randolph, New Jersey

Vehicles: (33) Blue Bird Vision Propane, Type C school buses

Fueling: On-site propane autogas station

Challenge

Randolph Township School District’s concern with oncoming emissions requirements in the shop led the district to replace its diesel bus fleet with an emissions-reducing fuel.

By the Numbers

100% bus routes using propane.
15,000 miles per bus, per year.
81,000 gallons of propane per year.

Researching Alternatives

Randolph Township School District serves about 4,300 students with its 36-bus fleet. In 2011 John Aymil, Randolph Township’s transportation director, started investigating alternatively fueled buses to address concerns of new diesel emissions standards. “Our mechanics had questions about the upcoming diesel emissions on diesel school buses,” said Aymil. The district’s bus dealer, Hoover Bus Sales, recommended propane autogas.

That initial research led to the district being the first to purchase propane buses in the state of New Jersey. Now, the district operates 100% of its route buses on propane, keeping two gasoline buses and one diesel bus as spares.

Budget Benefits

On average, propane autogas costs about 50% less than diesel. Maintenance service and costs are reduced due to propane’s clean operation. The savings help Randolph Township operate leaner.

Randolph Township did not take advantage of grant funding to purchase the buses, although state and federal funding is available. For example, the Environmental Protection Agency’s Clean School Bus Program provides $5 billion between 2022 and 2027 to replace existing school buses with low- and zero-emission school buses, including propane.

Hundreds of school districts across the nation have reported savings of up to $3,700 per bus per year due to lower fuel and maintenance costs compared with diesel.

Driver Feedback

Aymil noted that it took the drivers a little time to get used to the propane buses. “Our older diesel buses are transit style and the drivers had to adjust to driving the conventional-style school bus,” Aymil said. “But after the break-in period, there were no issues.”

The bus drivers appreciate the unexpected benefit of a quieter ride. “The propane buses are much quieter — which is great because of the number of residential houses in our staging area,” Aymil said. “Drivers can hear the students onboard while still focusing on the road.”

Also pleasing to those around the buses, including bus drivers and technicians, is the lack of diesel odors in the shops. “The propane fuel does not smell bad in the garage like the other fuels,” Aymil said.

Straightforward Maintenance

With propane autogas, no exhaust after-treatment or diesel emissions fluids are required to meet today’s strict emissions regulations. Plus, propane uses less engine oil.

“The propane bus maintenance parts cost less, plus, oil changes are significantly less expensive,” Aymil said.

The techs also noticed that the propane buses do not need heat in the engine block during the winter months. “The warmup time is almost non-existent on the propane,” Aymil said.

The technicians received trained from Hoover Bus Sales, along with bus manufacturer Blue Bird and propane fuel system manufacturer ROUSH CleanTech. Aymil also regularly trains the drivers on propane fueling safety.

Emission Benefits
School buses that run on propane emit fewer greenhouse gases, smog-producing hydrocarbons, nitrogen oxides and virtually eliminate particulate emissions compared with conventional fuels. According to a West Virginia University study released in 2019, propane autogas school buses reduce nitrogen oxides by at least 95%.

“New Jersey does not check emissions on propane buses because they run so clean,” Aymil said.

Lower bus emissions also can help inside the classroom, according to a 2019 Georgia State study, which shows how diesel school bus fumes drive down test scores. The study correlated increased academic performance when children were exposed to lower levels of school bus emissions. Student test scores improved in both math and English.

Fueling Partnership

The district worked with propane fuel supplier Amerigas to install fueling infrastructure and supply fuel. The district started with a 1,000-gallon tank, adding a second one in 2017 to allow for two buses to fuel at once. The second station cost the district about $38,000. Building a propane station costs less than any other fuel source, including diesel, gasoline, CNG and electric.

Aymil suggests districts start with a propane fueling site that can handle a future propane bus fleet. “It will make it easier to grow your propane bus fleet without the inconvenience of longer fueling times,” he said. Propane buses can travel about 400 miles between fueling.

Turnkey Solution

What started with Randolph Township addressing emission requirements led to myriad benefits for the district, including student health, reduced costs, ease of maintenance, less noise and no harsh odors. Propane is also a domestically produced fuel, with more than 90% of the United States propane autogas supply produced in the U.S., and an additional 7% from Canada.

More than 1.3 million students across the nation ride to school in propane autogas school buses each day.

Webinar to be Hosted by Gray, Gray and Gray Tuesday, September 27, 2022 1:00-2:00 pm EDT

Join Bill Constantopoulos, Director of Gray, Gray & Gray’s Sage Intacct Advisory Practice, for a guided tour through the best practices of report creation and analysis using industry-leading Sage Intacct technology designed for financial professionals. You will learn about:

Essential visibility – Creating multiple points of accessibility, anytime and anywhere
Financial reports and charts – Getting the real-time data you need, right when you need it
Activity-specific reporting – Using task-centered data collection focused on selected functions
Ad hoc reports – How to create cross-data reports from multiple sources
Robust permissions – Boost security and clarity by sharing only what is needed, with only those who need it
Customized reporting – How to break out of the “report rut” and collect and report on information specific to your organization and its needs

Bottom Line: Plan ahead for peak demand.

A strong supply plan includes open and frequent communication with your suppliers, transportation providers, and storage assets. This dialogue will help members be more prepared for the challenges associated with peak demand. Learn more during the Peak Demand webinar.

Preparing for Peak Demand, September 7, 2:00 pm ET, Register in advance

Bottom Line: The development of the 2023 edition of NFPA 58 has taken a giant step towards completion with the passing this week of the committee ballot to approve the second revisions.

From NPGA Bobtail

Every revision that was proposed by the NFPA Technical Committee on LP-Gas was ratified by ballot. Therefore, the only opportunity to change the first and second revisions proposed by the technical committee will be through the NITMAM process (Notice of Intent to Make a Motion), which is the ”appeal” process NFPA has implemented. Any such notice must be formally submitted and accepted by NFPA by the November 2 deadline.

NPGA’s proposals fared extremely well during this revision cycle and some of the new concepts will be introduced, including requirements that would allow the general public to refuel propane-powered vehicles; a new piping material called “reinforced thermoplastic piping” that can be used for piping liquid underground; and, new concepts that rely less on excess flow hardware and more on supervision and keeping internal valves closed when a bulk plant or industrial facility installation is not actively moving product. For more information, please contact Chief Technical Officer, Bruce Swiecicki, at bswiecicki@npga.org.

We are pleased to announce the release of this year’s Energy & Propane Industry Survey results!

This year, our survey looked at challenges resulting from the Russia/Ukraine conflict and how companies like yours have adapted. Additionally, the data collected this year has again been augmented by financial and operational data developed by Angus Energy, a respected energy services firm.

“Energy and propane dealers were facing pressure from multiple sources during the last heating season, but most saw their way to a successful year,” said Marty Kirshner, CPA, MSA, Partner and Chair of Gray, Gray & Gray’s Energy Practice Group. “Inflation, lingering pandemic restrictions, pricing uncertainty due to the Russian invasion of Ukraine, hiring problems – it has been one thing on top of another over the past twelve months. But energy and propane people persevere, they adapt, they manage. Their optimism comes through in our survey results.”

We invite you to download the complete results online today and compare these “industry average” results with the performance of your own business.

2022 ENERGY SURVEY RESULTS

2022 PROPANE SURVEY RESULTS

For additional information or help in using the survey results to measure your company’s performance, please contact Gray, Gray & Gray’s Energy team at (781) 407-0300.

The first annual National Propane Day will be held on Oct. 7 from 5 a.m. – 5 p.m., symbolizing propane’s placard number, 1075.

Join PERC in celebrating our industry with a month of giveaways and contests. Starting Sept. 6, we’ll be holding contests every Monday and Wednesday leading up to National Propane Day.

Monday contests will feature a question that companies can answer on social media; be sure to tag PERC’s accounts (listed below) in your posts. Wednesday contests will be instant giveaways with the first respondent who correctly answers the propane trivia question posted on PERC’s social media channels winning a prize.

We’ll celebrate National Propane Day in person at our October Advisory Committee meeting, with a livestream of the event. The festivities will culminate on Oct. 7 when we post the winners of the grand prize giveaway and a propane ally makes a special appearance! We can’t wait to see your submissions starting after Labor Day!

PERC Instagram

PERC Facebook

PERC LinkedIn

A new report provides architects and engineers with data on the emissions performance of different types of generators.

As climate change and resulting extreme weather events wreak environmental and economic havoc on the globe, power outages have become one of the most direct and dire problems to solve.

In California, for example, public safety power shutoffs have been implemented as a stopgap measure for mitigating wildfires that have greatly intensified in recent years because of climate change. And the U.S. as a whole isn’t faring much better, with the country enduring more blackouts (both unplanned and scheduled) than any other developed nation.

To deal with the increase in power outages, much of the focus has turned to power generators as a partial solution. But with all the options available, which fuel source is ideal? Power Generation: The Emissions Shifting Problem, a new report from the Propane Education & Research Council (PERC), sheds light on this question with evidence that shows propane can provide emissions and resilience benefits, particularly compared with diesel.

“Replacing diesel assets with propane-powered equipment will continue to push us toward significant air quality improvement and decarbonization,” says Gokul Vishwanathan, author of the report and director of research and sustainability at PERC.

As architects and engineers evaluate power generation solutions that can provide resilience in the face of outages — and help in the battle against climate change — this report provides clear data to help inform their decisions. Here are some of the highlights.

1. Propane can displace diesel generators in many markets and significantly improve air quality, mainly by lowering the release of nitrogen oxides (NOx) and particulate matter into the air. The use of backup generators has surged in recent years. In California, for example, the number of backup generators has increased 34 percent from 2018 to 2021 in the Bay Area Quality Management District and 22 percent from 2020 to 2021 in the South Coast Air Quality Management District, according to M.Cubed, an economic and public policy consulting group. Currently, 90 percent of the backup generators in both the districts are powered by diesel.

But this prevalence of diesel generators doesn’t mean they’re the best choice for architects and engineers worried about air quality. Propane engines can improve air quality by providing significant particulate matter and NOx emissions reductions relative to diesel, according to the PERC report. Depending on whether the engine is optimized for propane, propane generators can also provide CO2 emissions reductions. (See the report for the full comparison data.)

2. Dedicated propane engines and renewable propane can help with decarbonization. Unlike generators that have been retrofitted to work with propane, dedicated propane engines are designed to work with the fuel from the start and are optimized to reduce CO2 emissions while increasing efficiency.

And there’s more than one type of propane available to put in that generator. Renewable propane, produced from renewable feedstocks such as used cooking oil and animal tallow using hydrotreated vegetable oil process, is identical to conventional propane structurally and functionally. But it can lead to a 50–70 percent reduction in lifecycle CO2 emissions compared with conventional diesel and can accelerate deep decarbonization. And to add to the fuel’s flexibility, blends of conventional and renewable propane are also practical solutions for accelerating the crucial process of decarbonization.

3. Combined heat and power (CHP) solutions provide significant reductions in NOx, particulate matter, and CO2 emissions. CHP systems generate power with higher efficiency by reusing the engine’s exhaust to create heat for buildings or hot water. Propane is used for several CHP solutions in the 1 kilowatt–1 megawatt range. Typically, the engines employed have higher thermal efficiency (more than 30 percent fuel to electrical conversion efficiency), higher durability (40,000–60,000 hours), and low emissions. And depending on the unit, a 16–43 percent reduction in CO2 emissions can be achieved.

When considering resilience, CHP solutions are a great fit for residential, commercial, and industrial applications by providing not only electricity but also heat, hot water, and cooling during power outages, depending on the model and setup. When used in CHP mode, these solutions can have more than 80 percent fuel conversion efficiency to electricity and useful heat.

In addition, propane opens the door for fuel cells, a technology that boasts high efficiency and low emissions — and that seldom runs on diesel.

For a deeper dive into these insights and more, download the full report: Power Generation: The Emissions Shifting Problem.

Known as “The Space Gal,” Emily Calandrelli, MIT graduate and Emmy-nominated host of ‘Emily’s Wonder Lab’ on Netflix, this week spoke with 45 TV and radio outlets nationwide about propane school buses.

As part of PERC’s annual Back to School communications program, Emily shared the science about propane buses so parents, school transportation directors, and administrators can make informed choices about buses that produce fewer emissions for ultimately cleaner air.

A partnership with Emily allows the message of propane buses to extend to her social media audience and educate more people about the benefits of clean, reliable, and affordable propane buses.

Follow The Space Gal on any social platform and be sure to share her content on your own social channels for your customers and potential customers to see.

Watch the Interview.

Kansas City, August 30, 2022 – Lettermen’s Energy Holdings (LEH), one of the nation’s fastest-growing propane platforms, announced today the acquisition of Victory Propane. Based in Northbrook, IL, Victory significantly expands LEH’s operational footprint in the key cold-weather markets of Ohio, Indiana, Pennsylvania, and Michigan. Terms of the deal were not announced, though Victory’s principal executive leadership, Gregg Falberg, Eric Falberg, and David Florsheim, will join LEH in advisory roles and assist the company with future strategic initiatives.

“Victory’s is a remarkable business and is further testament to our desire to grow by aggressively pursuing and acquiring well-run propane companies that fit our strategic model,” said Lettermen’s Chief Executive Officer Steve Wambold. “Victory has a well-earned reputation for growth, safety, and overall excellence. This is a great operational fit for us and we’re proud to welcome everyone at Victory to Lettermen’s.”

Victory’s area of operation, which include its headquarters in Northbrook and field offices in Cleveland, Toledo, and Dayton among others, provide an excellent complement to the LEH’s already robust Midwest presence and position the company well for further expansion.

“Lettermen’s approach toward owners, its emphasis on continuity for the entire Victory team, the value of the legacy of our brand, and its focus on our customer/employee relationships made us confident that this is truly the right fit for the entire Victory Propane family,” says Gregg Falberg, co-founder of Victory. “We know our people will be in good hands, and we look forward to helping Lettermen’s grow.”

About Lettermen’s Energy Holdings

Headquartered in Kansas City, Lettermen’s Energy Holdings has acquired several local and regional brands since its formation in 2021, quickly becoming one of the fastest-growing consolidators in the American propane industry. With the addition of Victory, Lettermen’s offers service to more than 30,000 residential, industrial/commercial, agricultural, and autogas customers in fourteen states. More information is available at www.lettermensenergy.com.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law. The IRA includes a multi-year extension of the Alternative Fuel Tax Credit, retroactive for 2022 and through 2024. NPGA’s legislative team worked diligently to educate Members of Congress on the importance of this credit and the critical role it plays in incentivizing Americans to adopt alternative fuel vehicles. This credit provides a 37 cents per gallon excise tax credit on the sale of propane when consumers use it in a motor vehicle or forklift. In the near future, NPGA will provide additional information to association members on how to claim this credit retroactively for 2022 and prospectively through 2024. If you have any questions, please contact Michael Baker, NPGA Vice President of Legislative Affairs, at mbaker@npga.org.

On Tuesday, U.S. natural gas prices moved above $10 per mmBTUs for the first time since prices spiked above $13 in June and July of 2008. The move up came this week after Gazprom announced it would shut down flows through the Nord Stream pipeline, which connects Russia’s oilfields to Europe, for three days at the end of August. The Nord Stream supply had previously been reduced to 20% of its prior volume, adding pressure to European Union countries needing fuel for the winter.

While Russia has been the provider of nearly half of Europe’s natural gas in 2021, recent exports of LNG from the United States represent 75% of U.S. LNG, a strong increase from 34% in 2021. Total U.S. exports of propane were up last week to 1.722mm bbls per day, a number which caught traders’ attention when data was released yesterday. “This may be the winter of natural gas concerns,” Jeff Thompson of Propane Resources told a group of retail propane marketers last week. “Reductions in natural gas could drive world propane demand up,” he noted.

While propane has seen some pullbacks this year along with other commodities, there is a concern that bullish factors could push prices back up. Last year, inventory levels for propane were almost identical a year ago this week at approximately 68mmbbls. Nonetheless, mild weather played out the first several months after a fall season of very limited crop drying. This year could bring some crop drying and the possibility for a more normal to colder fourth quarter with higher propane prices as a result. “This is a winter where prices may have a chance to pull back 10 cents per gallon if temperatures are mild but could surge higher by a dollar or more in a higher demand scenario,” Thompson said. “It is definitely a winter to have fixed sales covered.”

Keeping up with the rapidly changing state of M&A propane and fuel oil markets can be daunting for business owners. The Cetane team of experts will host a concise 30-minute update on today’s M&A status and the effects of inflation, EBITDA multiple drivers, and specific operating expense items on potential transactions. The webinar will take place on September 14. Tamera Kovacs will moderate a panel of Steve Abbate, Jeff Brunner, and Barrett Conway.

For more details and registration, click here.

Recently, Tucker Perkins, President and CEO of the Propane Education & Research Council (PERC) spoke on his “Path to Zero” podcast about some exciting new findings from the recent NREL study which took over a year to complete. He began his podcast with these remarks:

“Typically, I have a guest with me but today, I’m flying solo for a very specific purpose. I’m going to talk for just a few minutes about Renewable Propane, and right off the top, I’ve got some news I want to share with you. PERC, in collaboration with the National Renewable Energy Lab – we also call it by its acronym, NREL – recently published a study regarding renewable propane, and it ended with some surprising conclusions. The study asked the question to bio-refiners: Is it in your financial interest to produce and sell renewable propane to marketers and markets, like transportation –– or –– is it financially smarter to use renewable propane within your refining processes as an on-site fuel or even as a feedstock for creating hydrogen?”

The full recorded podcast and the text can be found here.

More details on the NREL study are in the adjacent article here.

Major Refiners like Chevron see value in commercializing renewable propane

From the Propane Education & Research Council

Washington, D.C., August 17, 2022 – A new study by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) shows biorefineries can increase their financial returns by selling renewable propane versus using it as a processing fuel or as a hydrogen feedstock. The financial findings complement the proven carbon reduction benefits of renewable propane for the transportation, commercial, agricultural and residential sectors.

“Our models show that capital expenditure investments have the potential to be returned in as little as two months for large biorefineries or up to 14 months under the worst-case scenario,” said Bob Baldwin, NREL principal scientist and lead author of the study. Baldwin along with NREL researchers Mark Nimlos and Yimin Zhang spent six months studying the economic feasibility of recovering renewable propane from HEFA biorefineries. HEFA stands for Hydroprocessed Esters and Fatty Acids and refers to vegetable oils and fats used to produce renewable fuels.

The NREL study considered several alternate use cases for renewable propane at biorefineries, including using it as a process gas, using it to produce renewable/green hydrogen or selling it to a propane marketer or retailer. The study concluded that when sold as a fuel, biorefineries would receive significant revenue by leveraging renewable fuel credits even without a premium on the price of wholesale propane.

“NREL’s study shows the financial upside of renewable propane for refiners, but the carbon footprint story is even more exciting,” said Tucker Perkins, president and CEO of the Propane Education and Research Council (PERC) that commissioned the study. “When you realize the carbon intensity of renewable propane is significantly lower than grid electricity and other fuels, it is a clean energy breakthrough.”

Biorefineries around the country are being retrofitted to use feedstocks like soybean oil, camelina seed oil, field crop stover, animal tallow and used cooking oil to produce renewable fuels. Renewable Energy Group (REG) headquartered in Ames, Iowa and recently acquired by Chevron is one biorefinery of several that is committed to increasing production of renewable propane. In 2021, REG opened a new facility to ramp up production of renewable diesel from 90 million gallons per year to 340 million gallons. This translates to 30-34 million gallons per year of renewable propane, and similar expansions are taking place in other HEFA biorefineries that could easily quadruple this number.

Renewable propane is already available in every state in the U.S. In Sacramento, California, the Elk Grove School District has been using renewable propane for the past few years.

“Not only do renewable propane-powered school buses perform well, but they are also helping us achieve our carbon reduction goals,” said Anthony Willis, supervisor of Fleet Maintenance for the Elk Grove School District in California. “We’re currently running about 20 to 30 of our school buses on renewable propane and will consider transitioning to more of them as older buses are retired.”

The World LP Gas Association estimates renewable propane could meet half of the world’s propane demand by 2050. Today’s U.S. biorefineries have the potential to produce 40 to 50 million gallons of renewable propane annually.

Resources
NREL Study: Techno-economic, Feasibility, and Life Cycle Analysis of Renewable Propane

Quick Facts about Renewable Propane

Path to Zero Podcast: Reducing Carbon Intensity with Renewable Propane

City of Petersburg, Virginia Renewable Propane Ribbon Cutting

Propane B-Roll