The 2026 State of the Propane Industry — What You Need to Know

2025 was a year of change — for the propane industry, for the United States and for the world. The variables of positive, negative and neutral change are on display in the 2026 State of the Propane Industry update, particularly on the topics of regulation and propane’s position in the energy market, much of which has been top of mind for the industry in the first year of President Donald Trump’s second term. To help understand how the events of 2025 could affect business in the new year, these industry leaders lent us their insights on the state of the market at the top of 2026 and how economic and political shifts may affect the industry in the year to come.

• D.D. Alexander, president, Global Gas
• Lindie Honsberger, senior vice president of propane, Foster Fuels
• Kevin Jaffe, COO, Mopeka Products
• Scott Pearson, vice president of propane, CHS Inc.
• Tucker Perkins, president and CEO, Propane Education & Research Council
• Colin Sueyres, president and CEO, Western Propane Gas Association
• Tamria Zertuche, president and CEO, Ferrellgas

1. What regulations are you preparing for or watching in the coming year?

With exports being such a significant volume of the amount of the entire U.S. production, I am watching export tariffs on propane. If tariffs were put on propane and propane suddenly became uncompetitive on the world stage, that would cause all kinds of havoc in the propane market.

Honsberger: In 2026, we are monitoring regulations tied to energy choice and electrification mandates as federal and state policies push for lower-emission solutions and debate propane’s role in clean energy. With states like New York requiring all-electric heating and cooking in new residential buildings, only time will tell if other states push electrification in the same way.

Jaffe: From Mopeka’s vantage point, preparing for these regulatory developments means:

• Ensuring our sensors and monitoring solutions meet or exceed all relevant safety and compliance requirements under NFPA 58, OSHA (for industrial/commercial users), and any adopted state-level regulations, including those around cathodic protection and monitoring that are being discussed broadly at a state and federal level.
• Proactively adapting product offerings to support emerging global LPG markets — for example, maritime LPG bunkering or marine-fuel tanks — which might have different requirements for monitoring, leak detection and safety oversight.
• Working with regulatory bodies, industry associations and customers to stay ahead of code updates or shifts, helping customers remain compliant while leveraging Mopeka’s technologies to reduce risk.
• Building flexibility and scalability in our technology (sensors + cloud/mobile monitoring) so we can address future regulatory demands, such as tighter safety standards, leak detection thresholds or enhanced reporting/recordkeeping (particularly if LPG’s role expands globally).

Pearson: At CHS, we are watching developments across the country around low carbon fuel standards (LCFS), especially in states across our trade territory like Illinois, Minnesota and Colorado. Each state implements their LCFS programs differently, which creates unique compliance challenges for us and marketers in those states. These programs could also influence propane pricing and customer costs in those regions, so staying ahead of these developments is critical.

Perkins: Regulations we are watching most closely are the emissions regulations for cars, trucks and nonroad equipment like power generators and port tractors. Changes in emissions regulations are filtering in slowly from the EPA and CARB and look for clarity as we provide equipment that meets or exceeds the standards, and position propane versus diesel or gasoline equipment.

Sueyres: We are closely engaged on efforts to regulate gas-powered appliances out of existence. Despite a great number of wins in deep-blue California, the opponents of propane are not going away. There is still a statewide rule moving to phase out gas space and water heaters that may include propane; we have successfully carved propane out of similar regional rules. We are also seeing a shift away from direct regulations — which keep failing — to things like Indirect Source Rules which set a general limit on all emissions at a particular commercial or industrial site, forcing the property owner to reduce their own emissions or face steep fines. We killed an effort to create statewide authorities on that last year, but no bad idea is ever completely dead in California.

Zertuche: We pride ourselves on staying closely connected to the developments that may affect the propane industry, our customers and the communities we serve. Through active involvement of our employee-owners in industry organizations and state associations nationwide, we advocate for propane at the national, state and local levels. We believe propane is an important part of any energy conversation. That said, we closely monitor energy choice bills and any policies that may limit consumers’ ability to choose the fuel or appliances that best meet their daily needs. For example, we are pleased the state of New York agreed to a stay of enforcing their anti-choice bill pending the coalition partner’s appeal. We are also watching evolving emissions regulations. As a logistics-based industry delivering portable energy to people in need, emissions play a role industry-wide. Specifically, we are closely following the amendments to the California Air Resources Board. On a federal level, I’m optimistic that the Department of Justice is reviewing anti-energy choice laws, which could lead to deregulation that may positively impact our industry down the line. I’m also pleased that lawmakers are now advancing the Energy Choice Act, which we supported at NPGA’s Propane Days last year.

2. What key trends have emerged over the past year, and how are they shaping the propane market?

Alexander: Everything — due to the significant volume of exports — revolves around exports. If exports are high, they pull our inventories down. When the exports are reduced, they build our inventories. This has a significant effect on our propane prices. The other large price factor is the price of crude. Propane has been following crude up or down. The Russia/Ukraine conflict has had a premium in crude. If the conflict is settled, we could see crude come off even more. This is due to Russia’s crude being free to move into the global market. There has been excess crude in the market that is keeping the price relatively low. This excess inventory is believed to run through 2026.

Jaffe:

• Rapid digital transformation of propane operations: The industry is moving quickly toward smart tanks, IoT monitoring, integration to other technology platforms and real-time data. Customers expect visibility into levels, leaks and usage, [which makes] monitoring solutions central to future propane logistics, safety and automation.
• Strong global growth as LPG becomes a transitional low-emission fuel: More countries and industries are turning to LPG as a cleaner, flexible alternative — especially in emerging markets and infrastructure-limited regions.
• Increasing regulation for safety, traceability and environmental compliance: Governments are pushing for tighter safety standards, improved leak detection and digital documentation. Monitoring systems help distributors and customers meet these requirements.
• Rising demand for operational efficiency and automated distribution: Distributors are under pressure to cut costs, manage labor shortages and optimize operations. Accurate tank data enables predictive routing, automated scheduling and smarter inventory management.
• Expansion of LPG use in maritime, off-grid, defense and industrial sectors: New high-value markets — including marine fuels, industrial heating, mining, defense and remote operations — are adopting LPG. These sectors require robust, hardened and advanced monitoring solutions.

Pearson: A trend that we continue to watch is the dynamic of increasing exports and their impact on the domestic market. We do not see global demand diminishing anytime soon, so this will continue to dominate conversations into the new year and beyond. One thing we have seen more recently is a shift toward consumption-based billing. More marketers are exploring metered billing models, similar to a lot of natural gas utilities. Instead of customers buying propane in bulk, they pay as they consume. This billing method allows marketers to fill tanks when prices are favorable, improving efficiency and customer experience.

Perkins: A key trend emerging is the rising cost of electricity and the lack of reliability in the electric grid. This makes for a great opportunity for the whole propane home with generators, commercial opportunities for prime propane power, and opportunities across all markets as the cost of electricity and the lack of reliable energy cast a spotlight on propane in homes, farms and businesses and providing decentralized power where it is needed.

Sueyres: The massive, booming growth in energy demand out West. After decades of stagnant energy demand, the push for data centers, technology-related projects and on-site power generation has created a demand surge that the electric utilities have failed to meet — when they aren’t gouging consumers. The result is that there is a pathway for massive growth across every segment of the industry — from residential generators to massive, industrial-scale combined heat and power systems.

Zertuche: A recent real estate report suggests more people are becoming interested in living off the grid — a choice that propane’s versatility, reliability and portability directly supports. Propane can provide consistent, reliable energy in essentially any situation. So, whether you choose to live on a homestead, want to break away from grid-generated energy or just become more self-sufficient, propane can provide a consistent energy option.

We’re also seeing more interest in autogas, and that’s important because as consumer needs change, so must the propane industry change with them. More people are looking for environmentally friendly, budget-conscious ways to fuel their fleet vehicles.

Interest in autogas is also increasing because the federal electric vehicle tax-credit program underwent substantial changes in 2025 — including eliminating a financial incentive that encouraged many people to buy these types of vehicles. Autogas offers an affordable, alternative option to electric.

3. How would you gauge propane’s position in the U.S. energy market at the top of 2026?

Alexander: Crude is cheap with plentiful inventories. Propane is relatively cheap with plentiful inventories. Marketers should enjoy good margins. As far as the political world, propane has not been under fire with the current administration like it was under the prior administration. Before, it was ‘electrify everything.’ Now, consumers and regulators alike are seeing the costs and lack of reliability in electricity, and propane has been the winner in that change of thinking.

Honsberger: Propane’s position in the U.S. energy market at the top of 2026 is expected to be strong. As the demand rises for cleaner and more efficient energy sources for residential heating, industrial processes and transportation, propane provides a safe, reliable and affordable option. Propane is domestically produced and serves residential, commercial, agricultural and transportation sectors across the United States.

Jaffe: As we enter 2026, propane maintains an increasingly strong and stable role in the U.S. energy mix. Even as electrification and renewable growth accelerate, propane continues to be essential in rural, commercial, agricultural and off-grid applications where reliability, portability and energy independence are critical. Propane’s appeal remains rooted in its resilience, cleaner-burning profile and ability to serve sectors that are difficult or costly to electrify.

At the same time, the industry is steadily modernizing, with increased focus on digital tank monitoring, enhanced safety practices and better asset management — areas where Mopeka sees sustained growth and adoption. In parallel, there is rising industry attention on tank longevity and corrosion prevention, including renewed interest in cathodic protection for underground and long-life storage systems. As propane infrastructure continues to evolve, proper monitoring and maintenance — including corrosion and level-monitoring technologies — will play an even more important role in optimizing a measurable drop in risk-associated spending, whilst ensuring safety, operational efficiency and compliance. Overall, propane enters 2026 as an increasingly dependable, lower-emission and strategically important energy source, supported by ongoing modernization and growing expectations for technology-driven safety and efficiency across the supply chain.

Pearson: Propane’s role in the U.S. market is evolving as natural gas dynamics and electrification trends continue and will likely impact propane pricing. If natural gas prices rise above propane, propane could become the more economical choice, which would be a reversal of historic norms. There is also the potential for propane in power generation. In certain scenarios, propane could compete with natural gas for electricity generation, which would be a monumental shift in the energy landscape.

Perkins: I anticipate 2026 to be a year where the reliability and affordability of propane is recognized by specifiers and those who are considering purchasing. Many issues are aligning to spotlight the advantages of propane.

Sueyres: We are sitting on the precipice of growth that the industry has not seen in decades. There is still a strong demand by consumers and the public to move away from diesel-based technologies, but the electric and natural gas utilities have struggled to expand rapidly enough to keep pace. The result is that propane — a clean fuel that can go anywhere, last forever and do just about any job — is the last man standing. If, of course, we can capitalize as an industry.

Zertuche: Natural gas prices are expected to increase in 2026 as demand outpaces supply. That’s partly thanks to significant upward pressure from global LNG markets and domestic data center growth. Because of that, along with grid instability, I think that propane is gaining popularity. People are looking for ways to ensure their homes and businesses have the energy they need when and where they need it. That’s where propane comes in. It continues to gain momentum as people look for more consistent, reliable ways to fuel their lives.

4. What’s on your mind/what are you most concerned about going into 2026?

I would like to see the federal government regulate consumer choice when it comes to energy choice. If we can get that done on the federal level, it alleviates all the state and municipalities coming up with their own energy choice constraints.

Jaffe: As we look toward 2026, our attention is centered on three priorities: safety/risk management, compliance and operational efficiency across the propane industry. First and foremost, we’re focused on how the industry continues to strengthen safety and risk management practices — from tank integrity and corrosion prevention to accurate monitoring and leak detection. With more propane systems in the field and growing demand for reliable fuel access, ensuring that storage, handling and maintenance are done correctly is more important than ever. Technologies like real-time tank monitoring play an increasing role in supporting that safety foundation.

We’re also mindful of the evolving regulatory and compliance landscape. New standards around tank inspection, documentation and digital oversight are emerging across the country at a state and federal level. Our goal is to stay ahead of these changes and participate — making sure our products, customers and partners have the tools they need to meet and exceed requirements without adding unnecessary complexity.

Finally, we’re thinking a lot about efficiency — for distributors, drivers, technicians and customers. Labor constraints, rising costs and tighter delivery expectations mean the industry must operate smarter. Better tank visibility, smarter routing, predictive fills and automated alerts can make a meaningful difference in day-to- day operations.

Overall, Mopeka enters 2026 focused on helping the industry operate safer, more compliant and more efficient while continuing to support customers with the tools, knowledge and technology they need to succeed in a rapidly modernizing energy environment.

Pearson: A big concern in our world is always going to be the weather. Mild winters reduce demand significantly, and we have had several years of mild winters in a row now. We are also keeping our eyes on export-driven supply pressure. Continued strong export demand could tighten domestic availability and impact pricing.

Perkins: As we go into 2026, I am most excited about how our industry responds to the opportunity right in front of us — to fill the void created by the lack of affordable or reliable power. That should translate to tremendous opportunity and market growth, if our industry responds to that opportunity. There is a lot of work involved to make that next step, as we open new supply chains and educate ourselves on selling, installing and servicing. So, while the opportunity exists, it takes effort to get there.

Sueyres: While the ‘global energy transition’ may seem like a crock to many, the reality on the ground is that every energy consumer now has access to more data at their fingertips than at any point in human history. Carbon emissions, retail pricing, customer service complaints, dollars-per-Btu and more are right there in front of them. The propane industry needs to understand that it has to look beyond just its own industry as competition. Natural gas, electric, diesel, hydrogen, wind, solar, heating oil, nuclear — it does not matter; energy is energy, and consumers will go to whomever is cheapest, cleanest and safest with quality service to match.

Zertuche: Like many people, we are very mindful of our customers and their budget. It’s no secret that the cost of nearly everything has increased — from groceries to transportation. The good news is propane remains an affordable energy option for American families. Whether you live in rural America or have selected a newly built neighborhood in the city, propane is a fuel that delivers consistent, reliable energy when and where you need it.

5. Have you experienced any challenges related to tariffs or price increases? If so, what strategies have been effective in navigating these changes?

Alexander: So far, propane has been exempt from tariffs; hence, we have not been affected as of yet.

Honsberger: While many of the hearth products we purchase are assembled within the United States, certain components are sourced internationally and have been impacted by tariffs. To combat these increases, we have open lines of communication with each of our vendors, monitor changes regularly and make adjustments as needed.

Jaffe: Over the past year, we’ve seen some modest upward pressure on component and logistics costs, influenced by a mix of global supply-chain factors — including tariffs in certain categories, raw-material pricing and transportation fluctuations. While these factors have not been disruptive to our overall operations, they do require thoughtful planning. To manage these changes effectively, Mopeka has focused on several proactive strategies:

• Diversifying supply partners to reduce exposure to any single region or tariff environment.
• Improving operational efficiency, including streamlining production processes and optimizing inventory planning to minimize cost volatility.
• Investing in product design enhancements that reduce reliance on cost-sensitive components while maintaining high performance and reliability.
• Strengthening long-term relationships with key suppliers, enabling more stable pricing and predictable lead times.
• Leveraging scale and forecasting to secure better contract terms and mitigate short-term pricing swings.

Overall, while tariffs and price shifts have created some background challenges, they have also encouraged Mopeka to build a more resilient, flexible supply chain — one that ultimately supports more stable product availability and consistent quality for our customers.

Pearson: The biggest impact tariffs have had on our business has been prolonged periods of uncertainty, specifically with Canadian rail supply, and steel and other metal pricing that impacts propane tanks and other energy equipment. We spent a lot of time working through contingency planning to keep customer disruption to a minimum should the tariffs have had a significant impact on Canadian supply.

6. Has AI changed how you do business? Do you have any thoughts (positive, negative or neutral) regarding its use in the industry?

Alexander: We do use AI in our business, but it is more on an administrative, sales and marketing level. It can make these tasks simpler and more effective than without it. It really relies on the user to decipher what is credible and what works where.

Honsberger: AI has impacted our business in numerous ways. AI cameras within our fleet have improved our safety by analyzing footage in real time, monitoring driver behaviors such as phone usage, drowsiness, seatbelts, etc., and delivering instant alerts and feedback in the cab. AI is also reshaping the marketing and advertising landscape by introducing new challenges in SEO and digital engagement. There are shifts industry-wide in how users access information and search behavior. AI-generated summaries often deliver answers directly within search results, reducing traditional website traffic and limiting click-through opportunities. As these dynamics evolve, maintaining visibility in AI-driven search experiences remains an essential focus for sustaining website traffic, reach and engagement.

Jaffe: AI is starting to play a helpful role in our business, mostly behind the scenes. It hasn’t changed what we do, but it has improved how we do it. We’re using AI to better understand tank-usage patterns, support customers more quickly and streamline some internal processes. We see AI as a positive tool when used responsibly. In an industry built on safety and reliability, human judgment still matters — and AI should support that, not replace it. As the propane sector becomes more digital, we expect AI to help with things like forecasting, risk management, routing, and diagnostics, and Mopeka is ready to leverage it in ways that make operations smarter and customers’ lives easier.

Pearson: At CHS, we have been using AI to help automate routine tasks, freeing up time for value-added activities like strategic planning.

Sueyres: While I cannot speak to AI usage by marketers, I can say that AI is here to stay. The latest generations of AI technology are so far advanced from just a few short years ago that the technological leaps that are yet to come will make the AI of today seem quaint. The reality is that the U.S. business environment is not a safe one for luddites; whether it is routing, tank monitoring, customer service, back-office work or more, AI is here to stay and it is incumbent on marketers to consider how best to engage the technology.

7. What are you most looking forward to in 2026?

Most of the new export capacity will be on line. Inventories should still stay at a healthy level. Marketers should have good margins and, hopefully, it is a very cold first quarter of 2026.

Pearson: I am looking forward to seeing how we can continue leveraging technology for better forecasting and weather modeling. Enhanced modeling could help improve supply planning. I am also looking forward to some CHS operational milestones like the Missoula terminal coming online and the [NPGA] Southeastern Conference in Nashville, which is always an enlightening event.

Sueyres: I’m looking forward to the advances in propane-powered technologies that are hitting the market! From LPG-powered vehicles like NEXIO’s to the latest home tech like Rinnai’s to brand-new, LPG-specific power turbines like Enchanted Rock’s — it’s a very fun time to be a gear geek in this industry.

8. Any additional thoughts you’d like to share?

Alexander: I will put on my NPGA hat here. Please get involved with an NPGA committee. We have had so much success on the federal level with our NPGA initiatives. If we all work together, we will accomplish even more.

Pearson: Winter is coming. We hope.