Oil Majors Join Lobbying Push for U.S. Carbon Tax

(June 24, 2019) — Bloomberg reports that oil companies, automakers, and consumer products manufacturers are poised to launch a campaign for a U.S. tax on carbon dioxide emissions, even though it may lead to higher prices for their products. BP and Royal Dutch Shell are reported to be contributing $1 million each to the Americans for Carbon Dividends advocacy campaign, underwriting efforts to persuade Congress to enact a carbon tax-and-dividend plan. Ford Motor Co. is said to be signing on as a founding member of the group and its underlying initiative, the Climate Leadership Council.

Carbon tax proposals by major oil companies impact propane indsutry Bpn reports in Weekly Propane Newsletter June 24, 2019At the same time, dozens of corporations, including Capital One Financial Corp., software company
Salesforce.com Inc., and health care giant Kaiser Permanente will also be lobbying Congress for a carbon tax, according to Bloomberg. Leaders of Public Service Enterprise Group Inc., consumer products maker DSM North America, and Nature’s Path Foods Inc. were scheduled to appear at a news conference on Capitol Hill before meeting with lawmakers on the issue.

The news agency comments that fossil fuel companies have been shifting their positions on climate change, namely in response to pressure from investors and growing public alarm about what is purported and widely believed to be Earth’s warming temperature. Further, economists have long favored a carbon tax as a simple, predictable approach to establishing a price for greenhouse gas emissions, which are said to drive climate change.

“Shareholders, younger Americans, and Americans who live in coastal communities who are especially exposed to climate change are demanding action by the government and also by leading corporations,” said former U.S. Rep. Carlos Curbelo, a Republican from Florida who sponsored a carbon tax bill before losing his House seat in 2018. “American companies want predictability and sustainability, and this is the most efficient way of reducing carbon emissions while protecting economic growth.”

Nonetheless, Bloomberg observes that carbon tax efforts face headwinds on Capitol Hill, where Republicans have repeatedly voted against the concept of a new tax on carbon dioxide. During a May House Ways and Means Committee hearing on climate change, Texas Republican Kevin Brady summed up his position: “We believe a carbon tax is not the solution to address our environmental challenges.”

But some companies are hedging their bets. A new coalition of corporations and environmental groups calling itself the CEO Climate Dialogue outlines its ambitions for long-term federal policy “to protect against the worst impacts of climate change” without insisting on a carbon tax. Conversely, BP and Shell’s contributions are benefiting a campaign for a carbon tax-and-dividend plan that’s already being underwritten by ExxonMobil Corp., renewable power producer EDF Renewables Inc., and nuclear power generator Exelon Corp. The moves follow Shell’s recent decision to abandon a refining trade group over its climate change policy stance, and BP’s lobbying this year in support of a cap-and-trade plan in Washington state.

The initiative backed by the two oil companies would impose a nationwide price on carbon dioxide emissions—starting at $40 per ton—with the promise of deeper reductions in greenhouse gas than would be achieved through existing laws. For businesses, the plan also promises two potent prizes: a shield against climate-
related lawsuits tied to past, legal emissions and the end of federal regulations targeting greenhouse gas releases.

Under the plan, carbon tax revenue would be redistributed to households in the form of quarterly divi- dend checks, an idea endorsed by economists as a way to help insulate poor and middle-class Americans from the resulting higher energy costs. The initiative has emerged as a favored business alternative to the more aggressive Green New Deal, the plan championed by environmental activ- ists and Democrats to rapidly decarbonize the U.S.

(SOURCE: The Weekly Propane Newsletter, June 24, 2019. Click to receive a subscription directly to your inbox each week.)

Crystal Flash Inks 12th Acquisition With Kohley’s Propane In Michigan

(June 20, 2019) – In an effort to expand its footprint and capabilities along Michigan’s western lakeshore, Crystal Flash (Grand Rapids, Mich.) has acquired Muskegon, Mich.-based Kohley’s Superior Propane. The transaction was finalized on June 7, 2019. Terms regarding the deal were not disclosed. The acquisition provides employee-owned Crystal Flash with more than 1700 additional home heating customers. Two Kohley’s Propane team members will join Crystal Flash.
Crystal Flash acquires Kohley’s Propane, the 12th acquisition for Michigan-based propane company since 2011 as reported in BPN's WEekly Propane Newsletter Crystal Flash plans to expand its reach across Michigan's Lower Peninsula and into northern Indiana June 20, 2019.“Finding companies with a mission and values similar to ours is key when we look at an acquisition,” said Tom Olive, Crystal Flash president. “Kohley’s fit this bill perfectly. Our shared heritage as proud, independent propane retailers with a commitment to strong customer relations drove our decision. We look forward to having Kohley’s team join our employee-owned company and to serving customers along the lakeshore.”

The purchase marked the 12th acquisition for Crystal Flash, a leading independent distributor of propane, gasoline, and diesel in Michigan. Since being founded in 1932, the company has grown to have more than 280 employees and 15 locations across the state to power homes, fleets, construction, farms, and businesses.

Crystal Flash has completed 11 other acquisitions of Michigan-based companies since 2011 to expand its reach across the state’s Lower Peninsula and into northern Indiana. They include Drakes Fuel Services in Schoolcraft, Elliott Gas & Oil in Gladwin, Leelanau Propane in Northport, Heartland Propane in Hart, and CA Murphy in Sturgis. Others are C. Barron & Sons Inc. in Monroe, Owens Petroleum Inc. and Owens Propane Service Inc. in Albion, Brenner Oil’s home heat division in Holland/Muskegon, Richardson Oil in Lawrence, Lenawee Farm Bureau Oil Cooperative Inc. in Adrian, and Knapp Energy Inc. in Kalamazoo.

(SOURCE: The Weekly Propane Newsletter, June 24, 2019)

Deadline Nears For Millions In Federal Grant Funding For Clean Propane Buses

The U.S. Department of Transportation's Federal Transit Administration (FTA) has announced the opportunity to apply for approximately $423.3 million in Fiscal Year 2019 competitive grant funding for transit bus projects. The Grants for Buses and Bus Facilities Program is authorized to improve the condition of bus infrastructure by funding the replacement and rehabilitation of buses and related facilities.
Deadline Approaches for Millions of dollars in Federal Funding for clean fuel propane autogas near-zero emissions buses
Projects eligible for this funding opportunity include those that would replace, rehabilitate, lease or purchase buses and related equipment. Other eligible projects involve purchasing, rehabilitating, constructing or leasing bus-related facilities, such as buildings for bus storage and maintenance.

FTA will award the grants to eligible recipients, including fixed route bus operators, states and local governmental entities that operate fixed route bus service, and Indian tribes.  Projects will be evaluated by criteria outlined in the Notice of Funding Opportunity. As required by law, the program allocates a minimum of 10 percent of its funding to rural bus needs. The application period will close on June 21, 2019, at 11:59 p.m., Eastern Time.

Click here to visit the Notice of Funding page

Propane People "In The News"

Propane People In the News announces Cory Grimm has been promoted by Cargas Energy Systems reports BPN June 2019(June 18, 2019) — Cargas Systems (Lancaster, Pa.) has promoted Cory Grimm to director of consulting. In his new role, Grimm will expand his management responsibilities leading Cargas Energy’s systems consultants and project managers, as well as focusing on scaling the team’s implementation methodology and strategic initiatives such as new product releases. Prior to joining Cargas, Grimm was an operations analyst for the federal government, a financial advisor, and served in the active duty Air Force. Since joining Cargas in 2013, he has served as a trainer, consultant, and project manager. 

Propane People In the News announces Dan Boyd Anderson joins Energy Distribution Partners (EDP) reports BPN May 2019Dan Boyd has joined Energy Distribution Partners (EDP; Chicago) as General Manager for Anderson Propane Services. Anderson Propane serves residential and commercial customers in the Caldwell and Uhrichsville, Ohio, areas.

Propane people in the news announces Clayton Cook joins Energy Distribution Partners (EDP) May 2019Clayton Cook has joined EDP as General Manager for United Propane, which serves residential, commercial and agricultural customers in a seven-county area surrounding Lancaster, Ohio. United Propane was formerly part of United Landmark, which included propane, agronomy and retail sales.

Propane People In the news Travis Dunham joins Energy Distribution Partners reports BPN May 2019Travis Dunham has joined EDP as director of supply and logistics, with responsibility for working closely with EDP’s field executives to secure supply for its growing retail operations nationwide. Dunham was most recently director of wholesale at Ferrellgas. He began his career in the propane industry in 2005 as a wholesale representative for Ferrellgas, covering the Ohio Valley. Since, he served in positions of increasing responsibility, managing supply and procurement for Ferrell’s retail operations as well as independent propane marketers.

BPN's Propane people in the news announces Keith Barker joins Energy Distribution Partners (EDP) June 2019Keith Barker has joined EDP as general manager of Carolina Propane in Orangeburg, S.C., and Carmichael Propane in Walterboro, S.C. Carolina Propane serves residential, commercial, and agricultural customers in the Orangeburg and St. Matthews area, while Carmichael Propane has a primarily residential propane customer base and serves South Carolina’s Low Country. In addition to maintaining the current residential and agriculture markets in the service areas, Barker is responsible for growing the two companies across all of their business segments. He started in the industry in 1987, in the Carolinas and Virginia. Baker joined Davenport Energies, an independently owned fueloil and propane dealer with 30 convenience stores. More recently he held management positions with Blossman Gas & Appliance, Heritage Propane, AmeriGas, and Piedmont Propane Services.

Marlo Young, co-founder of Energy Distribution Partners (EDP) and long-time propane industry veteran passes away 062019Marlo Young, co-founder and COO of Energy Distribution Partners (EDP; Chicago), passed away in late April. He was a long-time propane industry leader, as well as a key member of EDP’s team since its founding in 2012. Mr. Young had extensive experience in the energy sector and previously served in operating and executive roles with Ferrellgas, Cornerstone Propane, and Inergy Propane. Tom Knauff, CEO of Energy Distribution Partners, commented, “He was recognized throughout the propane business for his wise counsel and positive leadership.”

BPN announces Propane People In the News Carl Kaplan joins Ferrellgas as Acquistions director June 2019Carl Kaplan has joined the Ferrellgas (Liberty, Mo.) Acquisitions Department as a business development executive serving the Northeast U. S. He previously spent more than 10 years in natural gas origination with companies headquartered in Connecticut and New York. In his new position at Ferrellgas, Kaplan will be based in Connecticut and cover a territory that encompasses 17 states and the District of Columbia.

BPN's Propane people in the news announced that Tom Dudycha has retired from Independent Technologies June 2019Tom Dudycha, marketing manager for Independent Technologies Inc. (Blair, Neb.), retired the end of April. He was hired in 2008 by the late Daryl Ingalsbe.

Edwin Ludvik, formerly of Ludvik Propane Gas (Walsenburg, Colo.), passed away April 9 at the age of 66. He began his career as a CPA in Denver in 1974 before transitioning to vice president of finance and administration of a publicly traded company, and a number of other executive positions. He later entered the family business, Ludvik Propane Gas, taking over the company in 1997 and eventually selling the operation in 2010. He was a member of the National Propane Gas Association and the Colorado Propane Gas Association (CPGA). In 2011, CPGA honored him with the first annual “Pioneer” award, which it established to recognize those who helped build the propane industry in Colorado.

BPN's Propane People in the news reports that John Ihler has been named interim CEO of MFA Oil June 2019The MFA Oil Co. (Columbia, Mo.) board of directors has named Jon Ihler interim CEO. He will be responsible for overseeing the company’s day-to-day operations of the refined fuel, propane, Petro-Card 24, Break Time, Big O Tires, and Jiffy Lube operations across an eight-state region. Ihler succeeds Mark Fenner, who had served as president and CEO since 2014. Ihler joined MFA Oil in 2001 working in Big O Tires and Jiffy Lube before leaving to own and operate his own franchised automotive business. He returned to MFA Oil in 2006, serving as business development manager and director of sales and marketing before being promoted to vice president of sales and marketing in 2014, overseeing sales, marketing, and distribution.

BPN announces Propane People In the news Dave Wager has joined the Minnesota Propane Association 052019The Minnesota Propane Association (MPA) has named Dave Wager as its next executive director. He will work with the current director, Roger Leider, until Jan. 1, 2020, when he will assume full responsibility as executive director. Wager has been in the propane industry for the past 32 years, starting with Cannon Valley Cooperative in 1987, through its many mergers, to form Central Farm Service. He became active in the industry 20 years ago, working in the Hall of Flame building at the state fair, as well as other association activities. He has served on a number of MPA committees, most recently the successions committee that hired its new training company and trainer. Wager was a member of the executive committee, has been active on the board of directors since 2010 and served as association president in 2015.

BPN's Propane people in the news reports Tyler Lawrence has joined the National Propane Gas Assoc as new legislative aide June 2019Tyler Lawrence has joined the National Propane Gas Association (NPGA; Washington, D.C.) as manager of legislative affairs, where he will work with Michael Baker, director of legislative affairs, on federal level priorities. Previously, Lawrence was Honda’s federal lobbyist for tax, trade, and workforce development. He also managed and developed the company’s corresponding internal working groups and advocacy campaign, in addition to chairing the Global Automakers’ Trade Policy Committee. Before joining Honda, Lawrence also held a number of positions at the National Association of Manufacturers, among them working in the group’s government relations department on tax and trade policy and lobbying.
Propane people in the news David Dodd joins Otodata as USA sales rep reports BPN May 2019
David Dodd has joined Otodata’s (Montreal) U.S. team as its new southern regional sales representative with responsibility for the southern portion of the country. He will be based in Florida. Dodd has more than 20 years of experience in B2B sales.

Christina Armentano executive vice president of Paraco Gas (N.Y.), was appointed to the National Propane Gas Association’s (NPGA) board of directors as a director-at-largeChristina Armentano, executive vice president of Paraco Gas (Rye, N.Y.), was appointed to the National Propane Gas Association’s (NPGA) board of directors as a director-at-large during the winter board meeting in February. She was also elected to the New York Propane Gas Association executive board as secretary, effective in March. Armentano also sits on the NYPERC board, and is a board member of the Hudson Valley Oil & Energy Council.

BPN's Propane People In the news announces Leanne Mazoch joins Ray Energy May 2019Leanne Mazoch has joined Ray Energy (Troy, N.Y.) as vice president of supply, based in Houston. Mazoch has been involved in the integrated oil and gas industry for more than 20 years. In her new position, she will assist in broadening markets by locating and purchasing fuel from multiple supply origination points to meet the growing demand of customers east of the Mississippi. Mazoch has held various positions within the energy sector, most recently as the Northeast NGL and olefins marketer for BP Energy Co., where she marketed third-party and equity propane supply for all eastern U.S. demand.

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BPN Seminar Shares Retail Propane Success Stories

Retail propane success stories were shared in a seminar presented by BPN at the 2019 NPGA Southeastern Convention in Atlanta. In three 20-minute segments, representatives of a trio of retail propane companies of different sizes and from different geographies shared unique ways their companies have found success. Their stories took into account market conditions as well as new opportunities presented by improved technology.

BPN presents seminar at 2019 NPGA Southeastern Propane Expo about Retail Propane Marketers Growth Success strategies in LPGTECHNOLOGY TO GROW THROUGH MARKETING
AND COMMUNICATION

“Gadgets are the great equalizer,” said Chris Caywood, president of Caywood Propane Gas, Inc. (Albion, Coldwater, and Hudson, Mich.). “Technology and information make smaller retailers more competitive with larger retailers.” He noted that smartphones were only used by about 15% of his market 10 years ago, but now almost 99% of his market has them. “This certainly changes the way retail propane marketers can interact with customers,” he said. “We’re trying to get ahead of the competitive curve by offering web-based and smartphone tools to our customers.” Something must be working. Caywood noted that over the past 10 years, propane-heated homes in his market declined by 11.8%, but his business grew by 300%.
BPN hosts presentation at 2019 NPGA Southeastern Expo about how Retail propane marketers create Success
With a background in law, retail, pharmaceutical, and online universities, Caywood has been a co-owner of his family’s propane business since 1997, but did not to begin overseeing it on a daily basis until late 2014. “The business was dying a slow death by a thousand paper cuts,” he said. “I talked to the staff about what sets us apart from our competition and many said, ‘Great service at great prices.’ After I shared my market research, which concluded that there were no retailers in our market promoting crappy service at high prices, we all agreed that we needed to find a better way to differentiate the business.”

Caywood has shifted to digital technology and marketing to attract and retain customers. “We publish our prices online, and we are restructuring our discount program to encourage customers to order and pay for gas using our website and smartphone app. Turns out that a lot of customers don’t need a lot of encouragement. We found that many were happy to sign on to a new propane company [that required] little human interaction,” he said. “The Gas Check is the only human interaction we require to get started with our company.”

AUTOGAS AS A MEANS TO GROW GALLONS
Mark Denton, vice president of business development of Blossman Gas (Ocean Springs, Miss.), said much of Blossman’s success has been due to its aggressive move into the autogas market. “Many remember the industry’s first exposure to propane as a motor fuel with some bad stories,” Denton said. “Now, the old carbureted systems of the ’70s and ’80s have been replaced with new technology, like the port fuel injected and direct fuel injected systems that we see on modern gasoline engines. The old systems became obsolete when the engine control units (or computers) became more sophisticated, and our old propane systems were not able to keep up. With today’s engineered autogas systems, we have complete engine control unit (ECU) laptop diagnostics on both gasoline and autogas.” He encouraged participants to take a second look at autogas for running their vehicles and as a product to sell to fleet owners. “Propane for autogas can be a year-round business.”

Denton also pointed out that propane is a very reliable energy source. “We have a very resilient fuel in propane,” he said. “When hurricanes strike and power goes out, everyone turns to propane when other energy sources can’t come through. When Verizon and AT&T went down with recent hurricanes, propane was fueling those returning the other power sources to service.”

As the technology for propane engines has improved, costs of vehicles have come down. “We have more choices now for propane engines… Ford, ROUSH, Freightliner, Blue Bird, and Thomas, to name some of the major options, not to mention aftermarket such as the Prins system,” he said. “Vehicle diagnostics now can tell you what is wrong with a down vehicle, to improve maintenance. Propane is 20% cleaner in tailpipe emissions. All major benefits to using our own fuel.”

School districts are switching rapidly to propane, Denton pointed out. “With savings of $2000 a year for bus maintenance and $1000 a year on fuel, we have a great offering even before you consider the lower emissions that helps our young students’ lungs.” He also shared a story about Groome Transportation, which serves the Atlanta Airport and many towns outside of Atlanta. “The company is using a million gallons of autogas a year and saving a dollar per gallon.”

ALL THE RIGHT PEOPLE AND EVERYONE IS A SALESPERSON
The right people make all the difference, according to Dan Richardson, president and CEO of Conger LP Gas (Tifton, Ga.). He told the story of an employee who was asked about tankless water heaters while at a convenience store on her own time. “She spent 20 minutes talking about the benefits of tankless water heaters,” Richardson said. “It would have been easier to just tell the person to call the office, but that’s not always what brings the business. Employees excited about their company make the company grow.”
BPN's winning presentation at the 2019 NPGA Propane Expo about how Retail propane marketers create Success strategies
Richardson and his staff decided a few years ago that everyone needed to be able to sell the company’s products and services. “In February of 2016, gallons were down and I had an ‘aha’ moment in short sleeves on an 80-degree day,” he said. “We were in a winter that never got into the teens and had only 12 days below 30 degrees. We are 60 miles north of the Florida line and the reality is annual retail gallons were down nationwide from 11 billion gallons to 8.5 billion gallons. We used to just come in, turn on the lights, and wait for the phone to ring. We had someone from outside the industry come in and review the business from a consumer standpoint. We had to start doing things differently.”

The result was a plan whereby all employees became trained and empowered to speak about all aspects of what the company sells. “Employees started feeling like, ‘this is my company,’” Richardson said. “When we moved recently to a much larger facility and had an open house, with the staff inviting all of their friends and neighbors, 500 people came on the first day and 300 came on the second day.”

While many companies have gotten out of the business of selling water heaters and other appliances, Richardson believes this has been shortsighted. He said, “When I looked at our company, I knew we had to find ways to increase residential gallons which would add value and long-term stability. In the residential market we put a strong emphasis on water heaters, both tank and tankless, and now offer a full range of gas appliances in our showroom.” Richardson and his team have also included tying in other gas appliances with the sale of gas water heaters. As a part of the program the customer agrees to buy gas exclusively from Conger LP Gas for five years. Richardson has not had a problem with customers honoring the five-year commitment. “If, as a marketer, I can’t keep a customer for five years, shame on me.”

Richardson also stated that the organic growth from this program has been a bonus. He said of the 206 water heaters sold and installed in 2018 38% were customers who were previously not using propane gas in their home and 31% came from new construction and home renovation projects. Richardson said, “If we, as an industry, are waiting on big box stores to sell more gas appliances to our customers, we will be waiting a long time. It’s important for us to take the initiative.” — Pat Thornton