Join WLPGA e-LPG Week, including Autogas Day

The World LPG Association (WLPGA) is pleased to invite propane professionals from around the globe to join in e-LPG Week, November 2-6,  Under the theme of “Bringing Energy to Life” e-LPG Week is an exceptional online event that includes a Keynote address by the Colombian Energy Minister, 11 speakers including five CEOs, academics, start-ups, industry leaders and suppliers/OEMs, sessions scheduled include Emerging Global Autogas Markets, Innovations in Autogas Applications, and the Transport Energy Mix of the Future, to name but a few of the topics covered, as well as a virtual exhibit hall, and business and networking opportunities.
e LPG week Autogas Day highlights global virtues of clean propane autogas around the world virtual event registration

The event aims to gather the global LPG value chain to inform and educate key stakeholders of current developments, trends and investment opportunities throughout the global propane industry, as well as to provide opportunities for information-sharing. Attendees will experience a unique virtual showcase of LPG companies, hosted on a world class interactive digital Platform with cutting-edge AI technology to enhance your experience, and create lasting business relationships.

Autogas Day, is a high-level event that takes place once a year to share most recent Autogas developments, and an opportunity for attendees to get involved through local activities targeting key stakeholders worldwide.

The Autogas Day 2020 program provides an opportunity for all those in the propane industry to understand how they might expand their business, and for other key stakeholders to better understand the exceptional benefits of propane Autogas, and the critical policies needed to support its global uptake.

For e-LPG Week event information or to Register please visit the WLPGA website here

Propane Miser Gives Terminal Operators Every Gallon of Fuel They’ve Paid For

Compressor and pump manufacturer Corken (Oklahoma City, Okla.) has launched a new propane railcar unloading system that fully evacuates propane from railcars during offloading with up to 25% faster unloading speed compared to conventional compressor systems. The company notes that conventional unloading systems with a single-stage compressor abandon the final 230-400 gallons of propane in each railcar.
Bpn the propane industry's leading source for news introduces new Corken propane miser product 10-2020
“We are solving a real problem folks have lived with—getting that last bit of propane,” Steven Willoughby, global business line director at IDEX Advanced Flow Solutions (Corken, Liquid Controls, SAMPI), tells BPN.

Conventional systems are unable to evacuate a tank below 30-40 psig during the vapor recovery process, he explains. Corken’s new Propane Miser, on the other hand, overcomes this barrier and achieves evacuation as low as 0 PSIG. It does so using a two-stage compressor controlled by a Programmable Logic Controller (PLC).

“The control system is patent pending,” Willoughby says. The liquid transfer and vapor recovery processes use separate performance algorithims, so they each operate with the maximum possible speed and efficiency. The system also offers three different liquid transfer modes for maximum unloading flexibility. With the unique control system, Corken’s Propane Miser offers these primary advantages: faster unloading, flexible unloading rate, faster vapor recovery, and deep evacuation capabilities. “With this unique controller and two-stage compressor, the Propane Miser quickly and safely empties the railcar to zero PSIG.”

This turnkey railcar unloading system includes the control system, a touch screen, a Corken D791 compressor, and all necessary safety equipment. The Propane Miser is Corken’s first unloading compressor offering with such a sophisticated control system, though the company has done less-elaborate custom systems in the past. It was officially launched Sept. 1 and is now available through a select number of distributors.

On its website, Corken provides a tool that will calculate a terminal operator’s potential savings with Propane Miser. The Railcar Offloading Business Opti-MISER asks the visitor to enter their average propane cost per gallon; their normal vapor recovery stop pressure; their optimal vapor recovery stop pressure; the number of railcars their operation unloads per year; and the number of years over which they would like to calculate their potential savings. “It’s just five questions and some personal information; it takes less than a minute if you know the answers,” Willoughby says. “It will tell you what you will save over the life of the unit.”

“Any terminal could use these,” Willoughby concludes. “If you recover 1% more propane, that adds up quickly, a couple hundred gallons at a time. The payback is a year or two.”

For more information about Corken’s Propane Miser, and to use the Railcar Offloading Business Opti-MISER, visit www.corken.com. — Steve Relyea

Propane Supply: Once Bitten, Twice Shy

By JD Buss… Merriam-Webster defines this phrase as “a person who has failed or been hurt when trying to do something is careful or fearful about doing it again.” Another dictionary search placed the origin of this phrase in the year 1894.
Propane 2021 winter lpg Supply Advice for retailer propane distributors by JD Buss Twin Feathers 10-20

A 120-plus-year-old phrase may be the best way to describe the domestic propane distributor’s response to this year’s COVID-induced supply season.

March 11, 2020, saw an end to the NBA season. In the next 24 hours propane conferences across the U.S. began to be cancelled. Within four days, most of the U.S. had gone on a lockdown. Then North America’s lockdown soon became a cry for the energy sector’s lockdown as well.

CHAOTIC SITUATION
Over the ensuing weeks, phone call after phone call revealed this refinery shutting production and another producer reducing output. The swift decision makers of the next one or two weeks secured the best supply deals (at that time) while those waiting in the wings were forced to make the tough decision between paying higher supplier costs or risk not having propane later in the season.

The premise for such chaotic producer reactions—a loss of demand due to COVID-19 restrictions that could severely impact energy producers and refiners. That risk drove drastic steps to make sure producer businesses survived.
Propane supply advice for domestic lpg retailers for winter 2021 by twin feathers expert JD Buss 10-20

Fast forward six months and there is a clear need to assess if the rhetoric in early spring was well founded or merely blowing smoke that has covered up another scenario.

Twin Feathers’ view (and mine) has always been that data speaks louder than words and that will be where this discussion begins. As a graph of EIA’s weekly propane production from 2009 to the present day (Fig. 1) shows, the 2010-2020 decade saw incredible growth in propane production with a 158% total increase from trough to peak. From the peak in January 2020 to the recent low in early May 2020, total production did see a 532,000-bbld decrease or almost a 22% decline from the top. However, if we look at the production data in a different way, we see these results:

  1. Q1 2020 production averaged 2.232 MMbbld while Q2 2020 averaged 2.053 MMbbld—only a 179,000-bbld, or 8%, decline.
  2. 2020 production through the end of August has averaged 2.171 MMbbld versus the same period in 2019 of 2.097 MMbbld. The first eight months of 2020 have actually been higher than 2019.
Propane supply advice for domestic lpg companies going into winter 2021 JD Buss 10-20

Weekly data from EIA can be subject to shifts when the delayed monthly data comes out, so we prepared a chart from the combined U.S. natural gas field and refinery production of propane (Fig. 2).
We see several similarities between the charts: similar growth from 2009 forward, similar peak in January 2020, and similar drop in production after the January high. Two other data points caught our attention:

  1. The peak to current production gap (current being June 2020 data, which is the most recent) is 176,000 bbld. That is almost equal to our Q1 vs Q2 gap presented in the first graph.
  2. The first six months of 2020 averaged daily production of 1.928 MMbbld while the first six months of 2019 averaged 1.819 MMbbld.
Looking at these two data sets from EIA we see that production did decline in late Q1 to early Q2 2020, but we have seen production rebound, as well as seeing total 2020 production above the prior year. That seems to paint a different picture than what was projected back in March and April of this year.

But maybe all of this production is necessary because inventory levels remain low and there is still a risk of lower supply during the peak winter demand season? Let’s pull up the inventory charts to support or negate this theory (Fig. 3).
Propane supply advice for domestic retailers going into winter 2021 by Twin Feathers expert JD Buss 10-20

National Energy Board (NEB) in Canada provides monthly statistics on propane inventory for the nation in total and both Western and Eastern sections. This graph highlights the fact that the August report for inventory was the highest level for Canada in the last two decades. What else provides some intrigue is that all of the prior inventory peak levels occurred either in October or November. The implication now being that Canadian inventory levels could get even higher by the first of November 2020.

But high Canadian inventory does not necessarily mean U.S. levels will be similar. Or will they?

Our total U.S Inventory graph for 2020 (Fig. 4) reveals that the U.S. inventory levels are right at the five-year-high mark and there is only one year that has a higher level—the infamous summer of 2016 that led into the record high of 101+ MMbbl. Inventory levels as of week 36 were already resting at 95.22 MMbbl—only 6 million from the prior peak.
Propane supply advice going into winter 2021 for retailers to be aware of from lpg supply experts JD Buss 10-20

High inventory levels seem to negate our earlier claim that higher production was necessary to meet peak winter demand. However, domestic demand, and specifically winter demand, has taken a backseat in the last seven to 10 years. Exports now dominate the demand side of the equation. Maybe exports have risen in 2020 and are justification for production to remain high.

Again, using EIA data, we can see the growth of exports for the last four years (Fig. 5).

In some respects, this graph appears similar to the production graph from EIA—exports peak through the first few months of 2020 and then decline after that. When we look at the EIA monthly data on exports and do a comparison of 2020 to 2019, we see these items:

  1. Total of 221.672 MMbbl exported in the first six months of 2020 versus 188.719 MMbbl in the first six months of 2019. This calendar year exceeds 2019 by 183,000 bbld.
  2. Five of the first six months of 2020 have exceeded the prior year’s monthly total, with only May 2019 exceeding May 2020 by 1 MMbbl.

With this snapshot of data, we see evidence that export demand has been higher in 2020 and likely to stay that way for the remainder of the year. This increase of 183,000 bbld surprisingly almost matches the increase in 2020 propane production (179,000 bbld) versus the 2019 production.

JUSTIFICATION FOR PROPANE PRODUCTION
Exports provide some justification for propane production levels to remain elevated, but the real risk to production may not lay in the current data. Throughout the last six months, oil and gas rig counts have plummeted. The fear of future lower production, whenever that future may be, provides a great deal of support for rhetoric of this past spring. A recent Baker Hughes rig count graph (Fig. 6) demonstrates that fact.
what domestic propane distributors need to know this about 2021 winter lpg supply by JD Buss 10-20

The Saudi-induced price war of late 2014 and 2015 coincides with a massive reduction in rig counts that essentially bottoms out in the summer of 2016. Then rigs saw a resurgence that built to a new high of 1062 total rigs in the summer of 2018. From that time to February 2020, rigs saw a steady decline before essentially “falling off a cliff” in March to July of 2020.

We could go into a lengthy discussion regarding well production rates in different shale formations and the fact that some wells may have production falling off faster than others, which precipitates the need for additional, new wells. The fact, however, is that the data has failed to show these types of production declines (at least not yet). Furthermore, another graph (Fig. 7) highlights the strong growth in oil production even as oil rigs saw massive decreases during the 2014-2016 timeframe.

Technology has vastly improved in the last 20 years and the market has seen this in higher production levels per well. Which should beg the question, will existing producers push to get even more from each well remaining in the field?

Through our assessment of the last six months, it certainly seems that the original mantra being pitched in the marketplace has failed to come to fruition. Propane production levels did move lower from the January 2020 peak, but we are still maintaining at or above the 2019 levels. Both major producing regions of North America—Canada and the U.S.—are sitting on record inventory levels of propane. Exports have continued their upward trend, but that is merely eating away at 2020’s production excess over 2019. The largest support of the March cries for lower production are the huge decline in rig counts. Yet even this data point lacks some conviction when we see the strength of production in prior years when faced with a low number of operating rigs.
Twin Feathers expert advises domestic propane distributors on securing winter 2021 lpg supply reports BPN 10-2020

Does this mean that the rhetoric of early spring was a blatant attempt to manipulate the market? We will answer that emphatically, “No.” Based on data at the time, the assessment made was the most accurate available. But going forward, the propane distribution community should keep a few things in mind:
  1. Remember that the supplier/producer selling propane is also the one producing it. Simple fact, we know, but in order for a producer to be profitable, they have to have product to sell.
  2. Watch prices! This is our first mention of prices in the article, but it is important. After the April 20, 2020, dive into negative territory for crude, prices have shot back up and seen large gains. In addition, natural gas experienced almost a 100% increase this summer. Rising crude and natural gas prices support production.
  3. Finally, review the data. All of the data presented here is publicly available from EIA or Baker Hughes. Watching the data from March forward, we have seen some of the earlier fears fail to materialize and that has in turn modified some of our actions.
If you find yourself feeling “once bitten, twice shy” this year, contact us at Twin Feathers so we can provide advice and assistance in navigating these volatile times.

JD Buss, certified public accountant (CPA) and commodity trading advisor (CTA), has been with Twin Feathers since 2008 and advises retail propane distributors on propane supply and risk management strategies. He can be reached at (913) 851-7575 or This email address is being protected from spambots. You need JavaScript enabled to view it..

2nd Annual Bobtail Driver Challenge Builds Morale, Camaraderie

When Heller’s Gas (Berwick, Pa.) held their 2nd Annual Bobtail Driver Challenge Aug. 21, they found that the event provided more than just good-natured competition. It also allowed drivers and other staff to meet, have fun, and share ideas.
Heller's Gas finds solutions to Challenges Hiring Propane drivers with second annual bobtail event bpn 1020

“We got to hear from the drivers who are in constant contact with our customers,” marketing coordinator Alicia Stavitzski tells BPN. “We’re in various locations and don’t always get to hear their ideas in an open forum like this. When we got together, managers, human resources, and others were able to hear drivers’ feedback on customer satisfaction; policies and procedures; social media; and other company practices.”

“This event also showed our appreciation and provided a safety opportunity where everyone could refresh their minds on propane safety practices.”

Twenty-five drivers from Heller’s Gas locations throughout Pennsylvania and Maryland participated in the event. Other Heller’s staff were on hand to serve as judges.
Propane Businesses Find Solutions to Challenges Hiring lpg deliver Drivers reports bpn 1020

The Bobtail Driver Challenge included three categories. First, there was a written test that covered basic principles of propane as well as the company’s policies and procedures. Next up was a vehicle inspection challenge that simulated a pre-trip inspection. Each driver had 10 minutes to inspect a truck and find faults that had been put there by the judges, such as a taillight that was out and a tire that was flat. Finally, there was a driving course challenge.

The driving course challenge tested five skills: driving close to a cone; making a left-hand turn; blind-side backing; driving between two rows of tennis balls that got progressively narrower; and making a front stop—stopping the front bumper as close to the finish line without going over. For added realism, one of these challenges included a mailbox as an obstacle to avoid.
Heller's propane finds solution to Challenges finding propane delivery drivers with second annual bobtail round up reports bpn 10-20

This 2nd Annual Bobtail Driver Challenge was held at Heller’s Gas’ internal training facility. The idea for such an event was originally suggested by Brad Breisch, director of training and compliance. When drivers showed interest, the Heller’s Gas Safety Committee and safety director Jason Koch began organizing it. The first event was a success, and only two changes were made for the second year. Two trucks were used in the vehicle inspection challenge this year, rather than one, so that two tests could be run simultaneously. Second, attendance was limited this year due to the pandemic.

“This year’s event was especially important, because we couldn’t have our annual company picnic due to the COVID-19 pandemic,” Koch says.

Four sponsors also contributed to the day’s fun. Five Star International, a Pennsylvania truck dealer, brought a food truck and catered the event and donated prizes to the top three award winners. Ray Murray Inc., a wholesale supplier of gas equipment and products, contributed the trophies presented to the winners in six categories. F.W. Webb Co., a wholesale distributor of plumbing, heating, cooling, and industrial supplies, provided prizes and giveaways for the competition, and Home Depot Pro donated a prize for the challenge. Heller’s Gas thanked the sponsors by including them in a video of the event and recognizing their participation on social media.

“This event was all about feedback, promoting safety, and acting as a big morale booster for our delivery drivers,” Stavitzski says. “We’re aiming to make this a bigger event, with a competition, for our other divisions too.”

Koch adds, “It was a great way to bring people together, recognize their achievements, and grow as a company.” — STEVE RELYEA

Propane Industry Strategizes For Upcoming November Election Outcome

With the November presidential, congressional, and state elections just a few weeks away, the stakes are high as fossil fuels and their impact on the environment are discussed and debated in forums from coast to coast. As of mid-September, Democrat Joe Biden has been ahead of the Republican incumbent, President Donald Trump, in most polls for many months. But, as the country learned in 2016, the only poll that counts is the official election count. “Many voters who only have cell phones are never surveyed, there is a lot of misinformation being spread, and mail-in voting will be at an all-time high,” said Jeff Petrash, vice president and general counsel for the National Propane Gas Association (NPGA). “Much can happen in the final days of an election and many outcomes are projected to be close in presidential swing states as well as states that will determine whether the Senate will remain controlled by Republicans or switch to Democratic control. Most expect the House will stay in Democratic control.”
 bpn reports on How propane industry is preparing for whatever 2020 Election results outcome to secure lpg industry future npga strategizes
NPGA PREPARED FOR ALL ELECTION OUTCOMES
“As a staff representing our members, we have to be prepared for whatever scenario comes about,” said Tyler Lawrence, NPGA’s manager, legislative affairs. “Propane has a great story to tell. It is a clean, abundant fuel. With the composition of Congress and key issues always changing, we are always adapting our approach to achieve the industry’s best outcomes.”

Lawrence noted that in Trump, the industry has an administration that has continued to support fewer regulations, even actively seeking ways to remove burdens. “This administration has served as a firewall against some Democratic policies that would place a heavier level of regulation on the industry,” he said.

“A Biden administration would represent a change of pace,” Lawrence said. “Biden has promised to rejoin the Paris Climate Accord on Day One; he advocates for net zero emissions by 2050; and he has a variety of other tangible goals to reach by 2025.” Industry veteran Randy Doyle of Holtzman Propane (Mt. Jackson, Va.) agrees that a Biden administration presents more challenges to the propane industry. “No matter how clean our gas is, we will be rolled up with all of the other fossil fuels and lumped in as advocates call for other energy sources to replace us,” he said. “There are those who believe all fossil fuels are a threat to environmental justice and certain vulnerable communities are more hurt than others by their use.”

“The electrify everything movement could gain momentum with a Democratic White House and a Democratic Senate and House,” Petrash explained. “We’ll need to be as vocal as ever that as long as coal and natural gas are the fuel source for the electricity, the electrify everything movement is a step backward for the environment!” Petrash noted that while some states, such as California, have very clean, renewable sources of electricity, most do not and will not for many, many years. “This will be an education process that needs to be ongoing at all levels of government.”

CHANGE MAY NOT BE EXTREME AFTER THE ELECTION
“Controlling the White House and both Congressional chambers doesn’t mean absolute control,” Petrash said. “We saw that the Republicans couldn’t repeal the Affordable Care Act in this scenario in 2017 and in 2009, the Waxman-Markey energy bill was never taken up by the Democratic Senate due to various overreaches in the legislation.” The 2009 bill, formally known as the “American Clean Energy and Security Act,” would have established emissions caps through 2050 for several greenhouse gases, including carbon dioxide, and instituted a system for trading emissions allowances. The bill’s sponsors still say it sowed the seeds for other climate change efforts.

Lawrence points out that several successes with the Democratic-controlled House demonstrate the propane industry can enjoy similar success next year. “Last year the propane industry received $15 million in federal appropriations funding,” he said. “The Department of Energy (DOE) granted propane and natural gas $10 million for combined heat and power (CHP) systems and $5 million for propane vehicle engine technology development.”

“This year, NPGA submitted four requests, all of which were approved by the Democratic House earlier this summer,” he said. “Unfortunately, the Senate has not completed their appropriations process, so fiscal year 2021 will likely be funded by a continuing resolution.” The four requests were for research, development, and demonstration dollars for propane vehicle engine technology, renewable LPG, microgrid/resillience, and micro-CHP systems.

“Representative Lizzie Fletcher (D-Texas) offered an amendment to include propane and natural gas into a $350-million annual grant program included in the House highway bill. During the mark-up, the Transportation and Infrastructure Committee voted 37-26 in favor of the amendment.”

GREEN TAX PACKAGE
Lawrence noted the Alternative Fuel Tax Credit and the Alternative Fuel Infrastructure Tax Credit are included in the House Democrat’s green tax package.

Petrash pointed out that while Representative Alexandria Ocasio-Cortez (D-N.Y.), also known by her initials AOC, has become well-known as a young Democratic congresswoman promoting the “Green New Deal,” history has shown she will have trouble getting it into a bill. “She hasn’t been around long enough to know the struggles of gaining support for a bill,” he said. “After 34 years in the House, Ed Markey, the co-sponsor of the failed 2009 Waxman-Markey bill, was elected to the Senate in 2014 and has won his primary this year for a second term. Assuming he returns, he’ll be an old energy hand who is interested in green issues and has the experience to know how this goes. He will be more carefully calculating about what can reasonably be accomplished in Congress.”

For Doyle, concerns about a Biden administration and a Democratic House and Senate depend on just how radical Democrats choose to be. “Typically, left-wing leaders will make it harder to develop land, harder to get local permits for bulk tanks, and harder to expand pipelines,” he said. “Forbidding the export of fossil fuels was supported by several of the Democrat presidential candidates.”

On the other hand, Doyle notes a couple of silver linings that could come about for the propane industry with a strong movement toward electricity. “Electric prices will likely go up, making propane more favorably priced. The positive benefits of propane’s comfort will get more attention,” he said. “Another sensitivity will be the electric grid and its failures as we have already witnessed. As more people see the need to control their own destiny, propane will be very visible as a clean, reliable alternative. We should see propane power generation sales increase.”

Petrash and Lawrence believe more moderate Democrats, known in Congress as Blue Dog Democrats, will be more reasonable regarding energy and the environment. “These Democrats tend to be from swing districts, which are never strictly Democratic or Republican,” Lawrence said. “They usually have to take more moderate approaches to get elected from these districts.” To engage with congressmembers, Lawrence and NPGA representatives often discuss the usage of stand-alone power generators as well as energy neutral and zero net energy (ZNE) construction.

According to a one-page overview published by NPGA, ZNE means that the amount of energy used by the structure on an annual basis is equal to the amount of renewable energy created on-site. Many ZNE homes rely on solar photovoltaic panels as a source of renewable power. But it isn’t practical to rely on solar power alone. Using low-carbon propane for energy-intensive systems such as space heating and water heating provides an effective mix for ZNE homes even when the sun isn’t shining.

Petrash also discussed the roles of the president and Congress in nominating and selecting members of the Federal Energy Regulatory Commission (FERC), the federal agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce and regulates the transportation of oil by pipeline in interstate commerce. The Senate Energy Committee held a hearing Sept. 16 to consider the nomination of Democrat Allison Clements and Republican Mark Christie to become FERC commissioners. “It is important to have a full commission of members who are supportive of the propane industry,” Petrash said.

Congressional Propane Caucus LogoThis is a return to the traditional pairing of Democratic and Republican nominees to FERC, a norm temporarily discontinued when the Trump administration nominated Bernard McNamee and later James Danly without Democratic partners. If confirmed this year, FERC will have its full slate of five commissioners for the first time in the Trump administration. The commission was incomplete due to the death of former chairman Kevin McIntyre and early retirements while the Trump administration appeared to consider nominating new commissioners a low priority.

PROPANE ADVOCATES NEEDED AT ALL LEVELS
Lawrence, Petrash, and Doyle all spoke about the importance of having propane advocates talking to government officials. “We’ve got to tell our story to everyone who will make energy regulatory decisions,” Lawrence said. He noted the PropanePAC helps to ensure key people are elected to Congress every two years. “There is no set formula, but we often consider propane volumes sold in the district, committee assignments (Ways and Means and Transportation and Infrastructure Committees are important ones to the propane industry), relationships with the industry, allies through voting, and an interest in helping us out are all factors.”

“In addition to the 40-plus members of the Propane Caucus, there is plenty of need for advocates for the propane industry as we face the challenges of the Green New Deal and the Electrify Everything movements,” Lawrence said. “We need more advocates who are well-versed in the positive benefits of propane. It is also important that our advocates are talking to customers and community members.” Doyle agrees with the need for building a base of industry advocates for all audiences. “We need to continue to have strong coordination between NPGA, PERC, and the state associations,” Doyle said. “We need significantly more people at local levels across the country who can speak the message of propane’s clean energy benefits.” — Pat Thornton