Finding a Path Forward for Propane — Working With Regulators & Governments

While I realize that my last article for BPN (featured in this year’s April issue) could have been read as a bit of a downer — and perhaps apocalyptic — there is nothing that I enjoy more than trying to remain positive. It is strange that I am often accused of being a grim reaper-esque figure within the industry, but I actually like to think of myself as a hopeless optimist who just so happens to have his eye strongly facing toward reality.

What is that reality? Our industry is at a crossroads on energy policy that most of us have never had to experience before in our lives. Propane country was considered to be something of an afterthought in public policy: rural Americans dealing with rural American issues on their own dime and own time. However, we have seen that there has been rapid shifting of propane country in the last several decades, from increasing suburbanization, increasing polarization within our politics and the expanding reach of government regulators. The fuel that drives industrial, rural and suburban America — propane — is now coming into crosshairs with increasing frequency. The reason is there are fewer and fewer targets to hit for doing things like “saving the environment.”

Like squeezing blood from a stone, there is only so much more that can be done to further reduce carbon emissions and other emissions without pain. That has meant that propane, a historically clean, safe, reliable and affordable fuel, has now become public enemy No. 1 (or public enemy No. 2) in many regions of this country.

The California Air Resources Board (CARB) is one of the single-biggest headaches that our industry faces within California. But as I pointed out in my last article, what starts in California does not end in California — so they are your headache as well.

However, just because there are activists who want to see us disappear — along with any combustion fuel — there are a number of opportunities for our industry to take the reins and prove that we need to be at the forefront of the future of energy in America. Even in California, there are opportunities presented to our members and those who are willing to take on new challenges to provide fuel for generations to come and do so in a way that grows gallons and protects the future of the industry.

For example, the South Coast Air Quality Management District is one of the largest regional air regulators in the country and serves the smoggy basin of Los Angeles. The propane industry provides gallons that go to logistics and forklifts, space and water heating at residential and industrial scale, and goods drying on a massive scale across the greater Southern California area.

Interestingly, South Coast has come to our industry time and time again to provide innovative solutions that minimize emissions and maximize economies of scale to transition their regulated entities using diesel products to propane products, improving air quality in the Southern California region. They have even gone so far as reaching out to their local electric utility, Southern California Edison, and requesting that Edison use our marketers to help improve their generators and other electrical transmission infrastructure and transition to propane because it would be “better for the air and the environment.”

What we are seeing here in California, as I have said repeatedly, will eventually make it to you elsewhere in the country. Just like there will be a lot of challenges and struggles to overcome for the industry, there are going to be significant opportunities for proactive marketers and savvy operators to find innovative ways to displace dirtier, less reliable fuels for propane.

A number of environmental regulators across the country are looking for solutions to help them. The propane industry can provide off-the-shelf, ready-to-use technologies that have immediate benefits for environmental and energy regulators desperate for solutions.

Many regulators are looking to reduce emissions associated with diesel, including particulates, sulfur oxides and harmful black carbon. In addition, because diesel is stored in a liquid form, it also creates significant possibilities for groundwater contamination. In parts of the country that are heavily reliant on groundwater stores, including the Midwest and Great Plains, the groundwater risk alone could be a deciding factor for how or why a fuel or technology is regulated.

We as an industry understand the value our fuel provides and the benefit it creates for the environment when compared against all potential sources of fuel and energy. Unfortunately, finding a path forward to work collaboratively with regulators and government means we as an industry are going to have to take the first step.

Sadly, the activist community does not always see us as a partner or our fuel as a solution to the problems that are facing this country for our energy consumption. While we can be disappointed in that, it does not change the fact that the impetus lies with us to help steer this conversation. The propane industry absolutely must be the arbiter of its own future. And there is no better way to protect ourselves than to have the awkward conversations that must be had with the government entities that regulate us and our competitors.

Steps to a Solution

The best first step we can take is working with our state and regional associations, the National Propane Gas Association, and the Propane Education & Research Council to find the opportunities that exist within our local governments or state governments and determine how we can provide these solutions. Once we understand good opportunities to get more propane equipment into the market to displace other technologies, then we can start explaining to governments — and in particular, regulators — how they could be going about transitioning to cleaner, safer technologies like ours.

The propane industry already recognizes the value of incentivizing consumers to make some of these switches through things such as the Propane Farm Incentive Program, the Forklift Incentive Program, or the Clean and Safe Appliance Rebate programs that many states already operate to incentivize consumers to switch out older, dirtier equipment for newer, safer propane-powered appliances.

The natural next step is not only talking to consumers about the values of our products and incentivizing them, but to also have a conversation with regulators about the value of our fuel and how it could be used today to assist these agencies in meeting their environmental, climate or social justice goals.

What are some examples of how we can steer governments to work with us instead of against us? If you’re in Nevada, it might be getting Nevada mining interests off of diesel equipment and on to propane equipment — a growth market, to be certain. Along the Gulf Coast, it could be setting new standards for emissions at ports and warehouses that could be met by propane-powered equipment. In the Midwest, it could be pulling dirty and riskier diesel irrigation engines out of fields for long-storing, convenient, accessible propane-powered irrigation engines. In the northeast corridor, it could be getting folks off of heating oil and transitioning to cleaner, safer propane for their home heating needs during peak winter season.

In some states the solution may lie with an environmental regulator. In others it may be through direct legislative action, working with allies in a statehouse to find solutions that will work for the most people and our industry. These are the conversations that we as an industry must have in order to kickstart how far we are willing to work with our regulators.

There’s an old saying in politics: If you’re not at the table, then you’re probably on the menu. It is time for the propane industry to take our rightful seat at the table.