Sharp Energy Recognized For Its Promotion of Propane Autogas

In 2013, Sharp Energy (Georgetown, Del.) entered the autogas market with one private fueling station serving 13 vehicles. Today, the propane subsidiary of Chesapeake Utilities Corp. has 53 stations in Delaware, Florida, Maryland, Pennsylvania, and Virginia. These include 37 private stations and 16 public stations that serve 1300 vehicles from multiple fleets that are Sharp customers.
Sharp Energy Recognized For Working w AllianceAutogas to promote Propane Autogas Fleets reports BPN the propane industry's trusted source for news since 1939.Oct 2019
As a partner of Alliance AutoGas since 2012, Sharp Energy is part of a national network of companies that help fleets transition to propane autogas. These companies deliver vehicle conversions; onsite fueling infrastructure; fuel supply; safety and operational training; and ongoing technical support.

“Since 2013 we have been building out the market for autogas,” Eric Mays, director of sales and marketing with Sharp Energy, tells BPN. “We are continuing to add stations as well as customers to serve from them.”

PROMOTING AUTOGAS
Sharp Energy was recently recognized for these and other efforts by the Eastern Pennsylvania Alliance for Clean Transportation (EP-ACT). Members of this group nominated and selected Sharp Energy to receive the Industry Support Award, which recognizes the company for its “immediate and consistent action in placing alternative fuel vehicles, fuel supply, or technologies on the road within EP-ACT’s territory and for promoting the entire alternative fuel industry.” The award was presented Aug. 13, 2019, at a luncheon in Essington, Pa.
Sharp Energy Awarded For Clean Propane Autogas Fleets In partnership with AllianceAutogas Reports BPN the LPG industry trusted source for news since 1939.Oct 2019
This is the third annual Industry Support Award presented by EP-ACT, and the first to go to a propane supplier.

“Sharp Energy has been a huge supporter of EP-ACT for nearly seven years,” says Tony Bandiero, executive director of EP-ACT. “They were instrumental in helping to get propane shuttle buses around the Philadelphia International Airport. Two companies are currently utilizing propane-fueled shuttle buses to and from their offsite airport parking lots.

“They have been actively promoting propane autogas as an alternative to gasoline and diesel in many industries, including school buses, community shuttle services, package delivery, and airport parking,” he adds. “They have installed eight propane fueling stations within EP-ACT territory and have helped EP-ACT deploy nearly 1000 propane vehicles in our territory.”

BUILDING THE MARKET
Sharp’s first autogas fueling station was a private one providing propane for 13 vehicles at Kent-Sussex Industries. Its first public station was in Georgetown and was used by Sharp’s own fleet as well as the Delaware Transit Corp. dba DART First State, which was conducting a trial of five propane vehicles.

“We have been consistent in building the market in Pennsylvania and in the other states we serve,” Mays says. “We have gone out and developed the business. Autogas has a long selling cycle; it takes time to come to fruition. We have been involved in the fleet side of the business and we support them with grant writing.”

The company has found particular success with fleets that run paratransit buses, school buses, and airport transportation.

“We include fuel management software on nearly every installation,” Mays adds. “If we’re going to do it, we’re going to do it right. It works well and we support our customers.”

Today, Sharp’s largest autogas customer is DART, which now has 265 paratransit buses running on propane and will eventually have more than 300. DART was one of Sharp’s first autogas customers, starting with the trial of five vehicles through Sharp’s Georgetown station.
Sharp Energy Recognized For Fleet of Clean Propane Autogas Fleet With AllianceAutogas Reports BPN the propane industry trusted source for news since 1939.Oct 2019
AMAZING SERVICE
“We were first made aware of propane by a very persistent salesman from Sharp,” says Rick Walters, fleet and contract operations director with Delaware Transit Corp. dba DART First State (Wilmington, De.). “He promoted propane very well.”
DART first tried a dual-fuel system on five buses, but the results were so bad, DART had the system taken off. “That’s when Sharp came into the picture,” Walters says. “They sent a technician in to repair the five buses.”

Sharp introduced DART to ROUSH CleanTech. In 2014, DART started a two-year trial using five buses equipped with a ROUSH propane system. “There was not one single fuel system-related breakdown in two years,” Walters reports. “Plus, we saved a bunch of money on fuel costs.”

DART then decided to begin transitioning its fleet of Ford E-450 Cutaway paratransit buses to half propane, half gasoline. It bought 50 propane buses in 2016 and 55 in 2017. Continuing to see reliability and cost savings, DART then decided to begin transitioning that fleet to 100% propane. In 2018 and 2019, it has continued purchasing more than 50 propane paratransit buses per year. By 2021, when the last of the gasoline buses purchased in 2016 and 2017 are replaced, the fleet will be 100% propane.
Sharp Energy and AllianceAutogas team up to promote Clean Propane Autogas Fleets & win Award Reports BPN the propane industry trusted source for news since 1939. Oct 2019
“We couldn’t have done any of this without Sharp and ROUSH,” Walters says. He explained that Sharp has built four fueling stations at DART garages, and is working on a fifth. “Driving to a public station is not cost-effective,” he says. Sharp has also helped DART get funding for these facilities. If a bus runs out of fuel, Sharp sends a truck to refuel it, so DART doesn’t have to send a tow truck. Sharp monitors the propane tanks at DART garages with telemetry, so they don’t run out of fuel. It also maintains the fueling stations, visiting them monthly.

“Sharp has been right by our side the whole time,” Walters concludes. “Their service has just been amazing.”

SHARP’S OWN FLEET
Sharp has also transitioned part of own fleet to propane autogas. These include service trucks, administrative vehicles, sales vehicles, and medium-duty vehicles. The service trucks are on the Ford F-450 and F-550 platforms and have Ford 6.8L V10 engines; some of these pickups were ordered from ROUSH CleanTech and some were aftermarket conversions. Sharp has also converted multiple Ford F-150s and Tauruses utilizing the Alliance AutoGas Prins kits; they have done 3.3L and 5.0L engines in the F-150s and 3.5L engines in the Tauruses. Other Ford conversions Sharp has performed include the 4.6L, 5.4L, 6.2L, and 6.8L engines along with the 3.7L engine in Ford Transits. “Our most recent ROUSH deployment is the Linebacker by Signature Truck on an F-550 chassis,” Mays reports.

The vehicles in Sharp’s fleet that were replaced or converted had been fueled by gasoline. Currently, Sharp Energy has 87 propane-powered vehicles within its own fleet and they displace approximately 155,000 gallons of gasoline annually.

Autogas remains a growing segment for Sharp Energy, which distributes propane to approximately 42,000 residential, commercial, and industrial customers in Maryland, Delaware, Virginia, and Pennsylvania.

“We cranked up our activities in autogas in 2013,” Mays explains. “We were and are in an NPGA benchmarking group and we heard a fair amount about autogas. Alliance AutoGas approached us, too. We saw that things were maturing enough that we were confident we would succeed.” — Steve Relyea

Touch-A-Truck Events: Provide Ways To Engage With Community

Two or three times a year for more than five years, Ciardelli Fuel Co. (Milford, N.H.) has parked one of its bobtails alongside work trucks from as many as 30 other companies and allowed children and parents to climb into the bobtail and see how it works. At these Touch-A-Truck and similar events, the bobtail was accompanied by two of the company’s crew members, who pointed out the different parts of the bobtail and explained what they do.
Touch-A-Propane-Delivery-Truck event branded to support breast cancer awareness and other community nonprofit orgs reports BPN the propane industry's trusted source for news and infor since 1939. Oct 2019
As this was written, Ciardelli Fuel Co. had just been at two Touch-A-Truck events in August and was preparing to participate in a similar event in September. That event, Wheels & Wings at the airport in Nashua, N.H., includes airplanes and helicopters in addition to trucks. The events the company attends typically include 15 to 30 vehicles representing different companies and organizations.

“The response from the community is always overwhelmingly positive, and we enjoy seeing our customers outside of the typical office environment,” Gabriel Bascom, marketing manager with Ciardelli Fuel Co., tells BPN.

Held by many different organizations, Touch-A-Truck and similar events allow children to climb into a variety of work trucks and other vehicles, ask questions, and sometimes even honk the horn. Many of these family events also offer other attractions such as music, raffles, face painting, bounce houses, and food vendors. They often benefit a charity. Among the companies displaying their work trucks at many of these happenings are propane marketers.

COMMUNITY AWARENESS
“Our community loves these events,” says Maribeth Girard, marketing assistant with Proulx Oil & Propane (Newmarket, N.H.).
Touch-A-Truck Propane companies host community events to raise funds for breast cancer other causes reports BPN the LPG industry's most trusted source for news since 1939. Oct 2019For the past six years, Proulx Oil & Propane has participated in the Annual Touch-A-Truck Fundraiser held by the Richie McFarland Children’s Center (RMCC; Stratham, N.H.), a nonprofit organization that helps young children, with and without special needs. Last year, at least 30 trucks were on display. As this was written, Proulx was getting set for RMCC’s 15th Annual Touch-A-Truck Fundraiser, Sept. 28 at Pease International Tradeport, Portsmouth, N.H.

“The turnout is always great, the kids love it, and the location at Pease Tradeport is great—big, open parking lots and plenty of visitor parking,” Girard says. “The Children’s Center does a great job of coordination, set-up, and traffic flow.”

“It is great for community awareness and branding,” she adds. “People see our truck at these events and see Proulx as a company who cares.”

Palmer Gas & Oil (Atkinson, N.H.) attended a Touch-A-Truck event held June 1 at the West Running Brook Middle School in Derry, N.H. The event was planned by the town of Derry with help from the Derry Fire Department, Derry Police Department, Dialed Action Sports, Kona Ice, the Knights of Columbus, and a number of other organizations. Many companies participated and there were more than 25 trucks on display.

“This was not Palmer Gas & Oil’s first Touch-A-Truck event; we enjoy displaying our well-maintained and clean vehicles,” says Sarah Berry, marketing and communications advisor with Palmer Gas & Oil. “We also enjoy hearing the community tell us that!”

THE LOUDEST HORN
At the June 1 event, Palmer Gas & Oil had a bobtail on display. Berry says, “Our truck had the loudest horn out of all the trucks on display!” Accompanying the bobtail were Gus and Jody Lockerman, husband and wife, who have been employed with Palmer Gas & Oil for more than 10 years. Gus is a fully licensed technician and a seasonal driver, and Jody is the company’s lead delivery dispatcher.
Touch-A-Propane-Delivery-Truck Blow Horn Event to raise funds for community needs and breast cancer awarenss reports BPN the propane industry's trusted source for news since 1939.Oct 2019
“We could not have found a better team to participate in this event,” Berry says. “Gus helped kids in and out of the truck’s driver’s seat and showed them how to pull the air horn, while Jody handed out small bags filled with fun treats for all the kids.”

Along with the treats, they also gave out small promotional items and a postcard that thanked everyone for attending the event and let them know Palmer Gas & Oil’s “Win Free Fuel for the Year” promotion had begun.

Palmer Gas & Oil’s most recent participation in a Touch-A-Truck event was neither its first nor its last. “We look forward to participating in future Touch-A-Truck events,” Berry says. “We strongly believe in local partnerships and giving back to the community.”

Proulx Oil & Propane took its pink propane truck to the most recent Touch-A-Truck event it attended. When the pink truck makes a propane delivery, Proulx donates a portion of the sale to the American Cancer Society’s Making Strides Against Breast Cancer campaign.

A TRUCK AND A SMILE
“We let the kids climb aboard and check out under the hood, and we explained what the propane truck does,” Girard says. “Our display is filled with balloons, things for the kids, and just overall bright and cheery.”

For the kids, Proulx had industry-specific coloring books, crayons, and stickers on hand at the display. For parents, they had company information, brochures, and job applications.

The Proulx display was handled by customer service rep Mandee Anderson, who always volunteers for the event.

She says, “I’m really looking forward to participating in Touch-A-Truck for the sixth time. As an employee of Proulx, I love being a representative of our company’s values—the importance of participating in events that help our local community.

“It’s so much fun to see how much the kids love the ‘Pink Truck,’ and I really enjoy hearing the little girls talk about wanting to be fuel drivers when they get older. I also like seeing the same families come back each year and seeing how much the children have grown,” Anderson adds.

“We often bring goodies for the kids to pass out, like coloring books or balls, and we really make sure we say hello to each child that comes by. If anyone is considering participating in the event, I would highly recommend getting involved! All you need is a truck and a smile—although it doesn’t hurt to bring some goodies with you! And once you do it for the first time—you will find that you just can’t wait for it to come next year.”
Touch A Truck Propane Truck Event held by Ciardelli Fuel in NH supports breast cancer awarness month all year reports BPN the propane industry's trusted source for news and info since 1939. Oct 2019
A WAY TO GIVE BACK
When Ciardelli Fuel Co. attends Touch-A-Truck and similar events, it takes its pink bobtail, a Freightliner M2 106. For each gallon this pink Breast Cancer Awareness bobtail delivers, the company donates one cent in support of the American Breast Cancer Foundation.

“Over the years, we have learned that the best displays are the ones that have consistent branding, are clean and organized, and offer a variety of options and activities for children of all ages,” Bascom says. “At each event, we see plenty of teenagers in addition to young children!”

“We always have two people at our events—one person to hand out promotional materials and swag, and a delivery driver to help children get in and out of the truck and educate them about the bobtail itself,” Bascom adds. “The attendance at these events is typically too high for one person to manage both jobs on their own.”

The swag they hand out includes company-branded slap bracelets, baseballs, footballs, balloons, and temporary tattoos. “Our most popular swag item is probably our pink pens, which promote breast cancer awareness and match the color of our propane delivery vehicles,” Bascom says. They also hand out promotional flyers and business cards. At some of the larger events, they raffle off “Free 20# Propane Grill Tank Refills for Life.”

Also on hand at the events is the company’s mascot, a toy bird named Ciar-lee (CHAR-lee). This official Ciardelli Fuel Co. bird honors the company’s founders, Ernest “Babe” Ciardelli and Albert Eugene “Chick” Ciardelli. They became known as “The Birds to Call” for your home heating needs.

“Touch-A-Truck events are an excellent way to give back to the communities we call home, and they are also excellent marketing opportunities,” Bascom says. “Our customers are our neighbors!” — Steve Relyea

Eye-Popping Inventories, But How Many Barrels Are Handy?

(October 7, 2019) — Primary U.S. propane/propylene inventories were fast-marching to 100 MMbbl in August, an achievable level in the current environment and one that was surpassed as recently as 2016. The National Propane Gas Association (NPGA) notes in its Inventory Trends report that builds are accelerating within historical norms and are expected to stay robust and above 2018 levels for the U.S. as a whole. The association observes that continued growth in propane supply is being driven by upstream oil and gas drilling activity, especially in the Permian Basin and the Appalachia region. So, should everybody relax? Not necessarily.
Winter 2019 Propane Supply outlook by Butane-Propane News the propane industry's trusted source for news and information since 1939
“A few years back if you told propane industry professionals that we would have somewhere between 90 MMbbl and 100 MMbbl heading into winter, there would be little to no fear of supply shortages,” says Tony Botts, a supply and risk management specialist at Mission, Kan.-based Propane Resources. “However, with export capacity well over 1.3 MMbbld and roughly 50% of our total inventory earmarked for exports, it changes the narrative. Any combination of higher exports, high crop drying, or strong winter demand could still put a serious strain on propane infrastructure across the nation.”

That outlook was echoed by Botts’ supply and risk management colleague at Propane Resources, Jeff Thompson. Writing in his company’s propaneprice.com newsletter Aug. 22, Thompson focused on the magic 100 MMbbl number. “Yes, 100 MMbbl of propane is a real possibility. It is hard to see the market not get to 100 MMbbl. [But] of this 100 MMbbl over 50% resides in a storage system designed to make it go away on boats and not get pushed up lines to help the eastern United States.”

Thompson reviewed that from the beginning to the end of the heating season last year, Mont Belvieu propane inventories built by 224,000 bbl, according to the Energy Information Administration (EIA). “At the same time, Midwest inventories had a draw of almost 19 MMbbl. The total U.S. inventory draw during the heating season last year was 25 MMbbl. Almost 75% of the total U.S. draw was in the Midwest. This is the inventory to watch.”

He added that total U.S. propane stocks are no longer an indicator of whether prices will go up or down. “With all the West Texas pipeline capacity coming on in the next half year, the market should see propane inventories build, especially in PADD III—the Gulf Coast region. This doesn’t mean it is going to help propane retailers. Could this propane keep a cap on propane prices this winter? It could until it doesn’t. If Conway gets pulled hard and is not replenished as we go through winter—which will be a hard task since most infrastructure is pointed to the Gulf Coast—the propane market may see Conway pulling Belvieu higher even with all that Gulf Coast inventory.”

The veteran supply and risk management specialist pointed out that “100 MMbbl of inventory is impressive until we realize over 50 MMbbl of it is not for us to use. Winter looks a little different when we start thinking of 40 MMbbl of usable inventory. A number to watch will be PADD II inventories as we go through winter. If traders start to project that the Midwest is going to be less than 7 MMbbl to 8 MMbbl by the end of March, the market could see prices move higher. Remember, big moves in propane can happen in February.”

Additionally, Thompson underscored that an EIA tally of 100 MMbbl in storage may not separate out Y-grade volumes. “EIA likes to make assumptions. I can’t blame them. It is a hard task to determine what is out there. The propane industry really has no idea how much of this 100 MMbbl we are looking at is raw. One hundred million is big, but it may not be the number we think.”

Winter 2019 Propane Supply has eye-popping inventory but how many barrels available for LPG USA needs reports BPN the propane industry's leading source for news and info since 1939John Powell, senior vice president and head of marketing, supply, and logistics at Crestwood Services (Kansas City, Mo.), also calls for scrutiny beyond the blanket U.S. inventory total published by EIA. “While the overall inventory levels are toward the upper end of historical highs, be careful to make sure the inventory is in your area, and not just in hubs like Mont Belvieu, Texas,” he advises. He draws attention to EIA’s sub-PADD stock reports, which show inventories standing at average levels in most locations. “Only Mont Belvieu has the majority of the excess inventory in the U.S. The sub-PADDs are much more important to the heating sector.”

Darryl Rogers, vice president of midstream oil and NGLs at IHS Markit, who will present his company’s supply outlook at the upcoming NPGA Board of Directors fall meeting, is more sanguine about stock levels. “We are reasonably supplied and I don’t see any unforeseen demand increases to tip the scales,” he says. “The wildcards are fall grain drying and LPG export terminal capacity additions on the U.S. Gulf Coast, but we don’t see those stressing the system through the upcoming winter.”

He further remarks that lower propane prices have driven higher incremental demand for propane as a petrochemical feedstock, but this too has been manageable against the pace of supply. In addition, incremental supply growth “is just overwhelming. Total inventory is expected to approach 100 MMbbl by the end of September, barring any significant and unforeseen events.” Eyeing petrochemical demand, Powell in turn calls attention to the industry’s preferred feedstock—ethane. “Most of the new chemical crackers will be using ethane as the primary feedstock,” he says, “so watch as the new crackers come online in the fourth quarter of 2019. Propane should not be the primary feedstock of these new plants.”
Winter 2019 Propane Supply outlook report by Butane-Propane News the LPG industry trusted source for news and info since 1939 Oct. 2019
Nathan Keowen, a risk and fundamental analyst at Crestwood, has an affirmative inventory perspective thus far. “Propane-only inventories as of mid-August stood at 86.5 MMbbl, 20.7 MMbbl above last year and 9.5 MMbbl above the five-year average. It wouldn’t be surprising to see propane/propylene stocks climb to 100 MMbbl, which would indicate a 95-MMbbl propane cushion going into winter. Regionally, stocks are building normally and predictably, including PADD II. There’s no noise in the weekly data. More flexible pipeline infrastructure is now in place and there are fewer frac constraints.”

Keowen adds that he hasn’t seen “well-bedded” price estimates for fall crop drying, but typically that demand ranges from 2 MMbbl to 7 MMbbl spread across two months. “I don’t think grain drying will be the demand driver headed into the heating season, in part because Midwest flooding was so bad some farmers didn’t plant altogether. That cannibalized planting.”

“Grain drying will be very spotty as the flooding in many areas throughout the country will affect crop yields,” Crestwood’s Powell agrees. “In addition, while ME2 [Mariner East 2 pipeline] is transporting approximately 150,000-plus barrels per day of both propane and butane to the dock, the [arbitrages] to Northwest Europe are closed right now, so some of this product will remain local. However, exports are something to definitely watch over the winter period as well.”

Regarding exports, Rogers notes they “have been reacting to both supply availability and export capacity” via existing LPG terminals, along with “the price arbitrage between the U.S. and Europe and the U.S. and Asia, although the latter’s trade flows versus the norm have been impacted by the U.S.-China trade dispute.”

And with additional export terminal expansions scheduled to come online soon, he observes that production increases and market factors remain supportive of higher exports following the new facilities being commissioned. Again, those elevated exports will specifically follow the price arbitrage between the U.S. Gulf Coast and Europe and the Gulf-to-Asia arbitrage. “The utilization rate is therefore expected to be very high and is a function of demand and the commercial arrangements in place between the terminal owners and operators and the users and customers. We believe the incremental capacity coming on stream will quickly be filled up and additional capacity additions are needed to support available propane production for export.”

“New terminals are generally built with deals that underpin the economics of expansion,” Powell affirms. “So, I would look for the new space to be generally subscribed and moving barrels from the in-service dates. More importantly, these new terminals will allow for more efficient loading of ships and allow more surge capacity to export products, especially during the winter and other periods of high demand. But just remember that the world can only take so many exports, regardless of the price, as there is little excess shipping and storage capability globally.”

He elaborates that to the extent there is demand and shipping wherewithal, the extra U.S. export capacity will definitely keep the world much better balanced than it has been in the past. “I would expect much greater volatility in shipping volumes as the world balances out the supply and demand faster than it ever has in the past. This will lead to a little more volatility in pricing at the hubs as the markets will be able to react faster than ever before to solve the imbalances.”

Production
U.S. propane production stood at 2.2 MMbld the week ended Aug. 23, according to EIA’s estimate, while the four-week output average was slightly more than 2.25 MMbbld, 297,000 bbld higher year on year. Industry experts expect production growth to continue, even in the lower-price environment. “We look for a continuation of growth, particularly from crude-producing areas in both the Bakken and West Texas regions, which has associated gas with that production,” says Powell. “Most of the growth in propane will be attributable to those areas and most of this propane will make its way to Mont Belvieu to support export growth going forward.”
Winter 2019 Propane Supply Outlook By BPN the propane industry's trusted news source since 1939
He amplifies he doesn’t envision U.S. marketers and foreign buyers competing for Mont Belvieu supplies, Belvieu is for exports, but rather does see competition for Mariner East 2 volumes. “Most of the competition will be for ME2 barrels in the Marcellus/Utica area to supply winter demand, so look for changes in basis pricing as the heating sector competes to keep those barrels in the U.S. rather than moving across the dock. The excess barrels in Mont Belvieu should remain in Mont Belvieu, primarily for the export markets as the U.S. becomes the world storage for winter barrels via exports.”

IHS Markit also forecasts sustained propane production growth. However, “production growth rates are expected to grow at a slightly lower pace as compared to last year resulting from the relatively low gas price impacting upstream activity across all major plays and basins outside of the Permian,” Rogers says. “This will have an impact on overall propane production as well. Total NGL production growth for 2018 was approximately 13%, and we are estimating total NGL production growth for 2019 at 12%.”

U.S. propane marketers now spar in a global marketplace, but the new circumstances don’t negate convention and best practices. “There are many factors to consider in support of the upcoming season,” Rogers observes. “Price management is important and sound, pragmatic programs and strategies are required. The level of purchases can be tested from time to time, but each company must assess this against the associated volume and price risks.

“We are expecting prices relative to crude oil to be weak for the balance of 2019 and continue to be weak relative to crude for 2020 and 2021,” he adds. “Mont Belvieu propane has been hovering around 33% of crude oil for the month of August. IHS Markit expects Mont Belvieu propane, as a percent of WTI, to approach 50% of crude oil for 2020 and 2021, but price volatility is expected, likely to the downside given many factors including, but not limited to, the economy, global crude oil demand, and trade issues.”

Botts of Propane Resources clarifies that with the ability of the U.S. to export more than 1 MMbbld any time of year, the old “buy in the summer because it’s cheaper” plan has headed toward to door. “Our markets are being dictated by global propane demand and price, as opposed to domestic, winter usage. If given the opportunity, all customers should approach their propane providers about locking in the price of the propane for multiple years at these levels.”

“With the extremely low fixed price of product, make sure that all storages are full, both secondary and tertiary storages,” counsels Powell. “Also review winter contingency plans, especially in the areas with lower sub-PADD inventories, and review transportation plans with suppliers and carriers to make sure you have a solid plan going into winter.

“The main concern for supply will be related to production of crude and natural gas,” he cautions. “I would keep a close watch on crude and natural gas pricing as producers are quick to reduce production if pricing moves much lower. Producers have become a lot more responsive to lower pricing and quick to reduce production due to unfavorable economics. Lower production will mean lower propane production, and that is when pricing will move higher. All things remaining stable, I would expect a slow and steady increase of production across most of the producing regions.”

Expanding on that outlook, Powell holds that “the general view is that the world has plenty of spare capacity to produce more energy-related products if pricing moves higher. While there will be world factors like Iran sanctions, OPEC cuts, or other political tensions, the producers’ ability to respond to increased demand continues to grow rapidly. I am more concerned about price increases due to production cuts than price spikes as a result of other external factors.” — John Needham

Operation BBQ Relief Goes International Serving Hot Meals to Victims In Bahamas

(October 4, 2019) — Shawnee, Kan. — Operation BBQ Relief (OBR), a relief organization that provides meals to displaced residents and emergency personnel during times of natural and other disasters, recently shipped 3,000 barbecue meals to victims of Hurricane Dorian in the Bahamas. Four small planes flew supplies to the Grand Bahamas in mid-September, chief marketing officer David Marks told FOX4TV in Kansas City.

Operation Barbecue BBQ Relief Deilvers Hot Meals to Hurricane Dorian victims in Bahamas reports BPN the propane industry trusted source of news since 1939 propane used to BBQ 10 2019Operation BBQ Relief will serve hot barbecue meals in the Bahamas for at least 30 days. The deployment added a new dimension to the nonprofit's logistical challenges as OBR navigated its first effort outside the United States. While flying meals to the Grand Bahamas, the organization encountered inclement weather and mechanical difficulties that caused unexpected delays. That didn’t stop OBR from making sure their prepared meals did not go to waste. The Always Serving Project in Ft. Lauderdale, Florida, sprang into action and helped the nonprofit deliver the 9,350 prepared meals to shelters and First Responders in the area.

“We have a C-47 transport plane that’s going to carry over,” Marks said.

The all-volunteer nonprofit organization has received many awards for its humanitarian work, including the CNN “Heroes Award” that also paid tribute to pit master and co-founder, Stan Hays, who said they expect to serve up to 20,000 hot barbecue meals to victims devastated by Hurricane Dorian. Operation BBQ Relief is made possible by an all-volunteer effort and corporate partners that include Blue Rhino responsible for all the 20-pound propane cylinders that fuel OBR's hot, delicious barbecue meals and make disaster relief possible. Two major milestones occurred during this recent deployment including OBR marking its 3 Million Meal mark and its first International deployment.

Operation BBQ Relief was formed in May 24, 2011, in response to a need for relief efforts in tornado-stricken Joplin, Missouri.

Anyone wanting to help can donate, here.

Lessons Learned: Adopt New Technology, Continue To Improve

While many people who operate fleets see electronic driver logs (EDLs) as a burden, Lon Holloway sees EDLs as tools that help increase profitability. An EDL, he explains, gives him data that helps him determine when the truck needs preventive maintenance. That, in turn, helps him avoid the costs of breakdowns and unplanned repairs.

Butane-propane News 80th anniversary spcecial Then and Now Sept segment highlights propane industry veteran Lon Holloway autogas history 2019“If you’re not using all or most of the new technologies, you’re leaving money on the table,” he says. “You don’t have a lot of control over the cost of propane, but you have many ways you can control your expenses. If you do a real good job of that, you will make money.”

Holloway’s embrace of new technology and continuous improvement has served him well during a propane industry career that is now in its 51st year.

He began his career in Texas. Holloway grew up on a farm in east Texas, in a family that included his parents and six kids. “I have always been proactive,” he says. “I was taught that you had to work for what you got.”

Holloway’s earliest adventure in business began when he was 16. He noticed a neighbor had some chicken houses sitting unused. Holloway proposed that he and the neighbor get some chickens. The neighbor provided the chicken houses and Holloway provided the labor in the morning and evening. The neighbor just checked that the chickens had water at lunchtime, when Holloway was at school. They split the profits. Soon after, the neighbor purchased a small grocery store and invited Holloway to work for him there.

ENTERING THE INDUSTRY
When the man passed away about a year later, his son invited Holloway to work at Petrolane, where the son was a manager. So, Holloway entered the propane industry at the age of 17, in 1969. (In March 2019 he celebrated his 50th year in the industry.) The Petrolane branch sold any appliance that would go in a home and employed four service technicians and an electrician.
BPN the propane industry's trusted source for news celebrates 80th anniversary with Then and Now profile of generational family lpg businesses with industry veteran Lon Holloway oct 2019
“My job was anything that no one else would do,” Holloway says. “I moved furniture, took out the trash, and did anything else that had to be done.”

Once, as a driver, he worked an 82-hour week. “That was a full week,” he says. “You know the saying, ‘You have to make hay while the sun shines’? Well, you have to deliver propane when it’s cold.”

He worked his way up, becoming a service technician, a service manager, and then a branch manager. By around 1972, at the age of 21, he was running a $1.25-million operation and had 14 people working for him. He was the youngest manager in his Petrolane region at the time.

When he became manager, he was able to reward the trust placed in him by an employee of a local bank. When Holloway was 17 and had just started working at Petrolane, he went to the bank to try to get a loan for a new car. When the employee learned Holloway was only 17, he told him he could loan the money only if Holloway’s father would cosign.

“I said, ‘No, sir, there are eight people in my family. My father has a full plate,” Holloway says.

Impressed, the employee asked when Holloway’s birthday was. When told he would turn 18 soon, the man said he would make the loan, but both he and Holloway would be in the hot seat if he got caught.
TN Holloway BPN celebrates 80th anniversary profiles propane biz
“When I became manager at Petrolane, we financed all appliances, and I took that business to him and that bank.”

TURNAROUND SPECIALIST
After Holloway had been running that branch for a time, Petrolane asked him to take over a branch in Louisiana that was failing. The company proposed that he move there and see if he could save it; if it failed, he would still have a job elsewhere in the company.

Holloway accepted the challenge and moved to Louisiana. While there, he noticed that one of the employees enjoyed competing in cooking contests. Holloway asked him to cook lunch at the branch and then he went out and invited commercial accounts to come eat with them for free. He invited them to bring their friends, too. Inviting people to these lunches helped grow the business, and the branch picked up both commercial accounts and retail accounts. Soon, that branch that had been failing was making a $100,000 profit.

“I always had a knack for talking to people,” Holloway says. “You can’t just sit in your office and wait for the market to knock on your door; you need to go out and get it.”

That is something that is as true today as it was then, he adds. “Houses only need electricity and water. You need to call on the home builders and sell them on gas. For them, it’s an additional expense. The marketer must know why a builder should add gas. One example is the fact that when it is below freezing outside, a heat pump blows air that is less than body temperature. Another example is the fact that an electric water heater is one of the most inefficient appliances in the house. It runs whether you are using hot water or not.”

Petrolane then asked him to do the same with a store in St. Petersburg, Florida. He did. “I became known as the guy who turns around stores,” Holloway says. During his time with Petrolane, he would be named operations manager of the year and sales manager of the year.

AUTOGAS CONVERSIONS
While in St. Petersburg, he began converting vehicles to propane. When Petrolane decided to open a conversion facility in Tampa, they chose him to run it. Next, he was sent to Atlanta to run the vehicle conversion operation for the entire Southeast. Among the vehicles Petrolane converted to propane was a fleet of trucks owned by Lockheed. “One of the best compliments I ever got was when a guy at Lockheed told me, ‘I don’t know who you have doing conversions in Atlanta, but they should be building aircraft.’”

When Petrolane and Suburban Propane merged, Holloway was able to choose to live anywhere in the area. He moved to Denton, Texas. He was then technical service manager in carburetion and eventually led that operation in three of the company’s five territories.

After 27 years with Petrolane and the subsequent owners of that company, Holloway grew tired of all the traveling that was required. He moved to Northwest Propane Gas Co. (Carrollton, Texas), the largest independent propane marketer in Texas and one of the largest in the country.

Today, Holloway has been with Northwest Propane Gas Co. 23 years and is sales manager. He also chairs the Texas Propane Gas Association (TPGA) Technical & Standards (T&S) Committee that serves as the go-between between the industry and the Texas Railroad Commission. Previously, he has served as president of TPGA and as a member of the board of the Propane Council of Texas (ProCOT), the state entity that represents the Propane Education & Research Council (PERC).
BPN celebrates 80th anniversary with special Then and Now profiles of legacy propane companies and LPG autogas veteran Lon Holloway who describes propane as engine fuel Sept 2019
THEN and NOW
Over the years, he has seen many changes in the industry and many new technologies come into use. “Many things we take for granted today weren’t always there,” he notes. He named several examples:

Single-barrel trucks: “One of the most significant changes to the industry is the change from twin-barrel trucks to single-barrel trucks. Twin-barrel trucks had one barrel to transport butane and one barrel to transport propane. Many companies used to handle two products; now they handle one.”

Air conditioning in bobtails: “Today, the first thing a driver writes up on a truck is that the air conditioning not getting cold fast enough. They write that before they mention the brakes! I remember when we had no air conditioning, except that push-out vent in the roof of the cab.”

Automatic transmissions in bobtails: “I saw my first bobtail with an automatic transmission in 1980.”
Electric hose reels: “These bring in the hose, nice and neat, and the driver doesn’t have to do much. Before electric hose reels, mine was a trough on the rear deck that you manually did a figure eight with the hose, strapped it down, and went on to the next stop.”

Emergency shutdowns: “These are now found on both transports and bulk plants. If there’s a problem, you can shut everything down with the push of a button.”

Two-stage regulators: “One of the biggest safety changes is the two-stage regulator, with one at the tank and one at the house. That came about maybe 20 years ago. Before that, if something went wrong, a single-stage regulator could pump full pressure into the house.”

Electric pilot lights: “Another major thing in safety is the end of the BJ gas valve. That was a hole in the oven that you would light it through. If it didn’t light, eventually you were going to blow up the house. A pilot light is better and an electric pilot light is even better.”

Degree days calculated electronically: “We used to do it with a pencil. Degree days has been so successful, a lot of companies still use it for residential customers. A family uses a constant amount of fuel. Other than that, the assumption is that at 65 degrees, people turn on the heater. That’s the only variable—a number of hours below 65 degrees. That allows you to estimate as close as possible to the ideal delivery.”

Tank monitors: “These tell you what the customer has, so you can make that ideal delivery. If it’s a 500-gallon tank, you want to deliver 300 gallons; you don’t want to deliver 100 gallons three times. To reduce your overhead, you have to increase your average gallons per delivery. Your truck is one of your most expensive commodities, so you want to make it more efficient and make it last. Cutting down on miles does both.”

CONTINUOUS IMPROVEMENT
These new technologies have increased comfort, safety, profitability, or other aspects of the business. Just as he has adopted these technologies, Holloway says, he has also remained open to selling new products and doing business in new ways.

“I often hear people say they do things a certain way because that’s the way it’s always been done,” he says. “But you have to be willing to change. Quit doing it the way you’ve always done it; you need to keep improving.”

“You need to grow your business and you need to control your expenses,” Holloway concludes. “Growing your business means you have to go after new markets. Wherever you are, you have to find your markets. Controlling expenses doesn’t mean you have to pay less or get a cheaper truck; it means you just have to run more efficiently. You have to ask yourself what technology you can use to run more efficiently and make the business more profitable. — Steve Relyea