In her 13 years at Alliance, Byrns has built a personal portfolio with approximately 25 customers located primarily in the Midwest and annual sales of more than 60 million gallons of propane. This is an impressive accomplishment for anyone, but particularly for Byrns.
Thirteen years ago, at the age of 27, she took a brave leap of faith. After spending five years in an insurance and billing role in a chiropractor’s office, she jumped into the propane industry when her friend and owner of Alliance, Jason Doyle, offered her a position.
“I was ready for a change and my finances were capped out. I could only move up so far. That was my main motivation.”
With no prior experience in sales or knowledge of the energy field, the transition was difficult, but she was persistent and immersed herself into learning everything she could about propane and the needs of her customers.
“I knew nothing about propane. For the first six months, I questioned if it was the right decision for me. There were days I thought, ‘Oh, my gosh, what have I done?’ I’m glad I stuck with it.”
As Alliance has quickly grown organically and through acquisitions, so has Byrns. Alliance is now a leading wholesale propane marketer shipping in the U.S. and Canada out of approximately 75 terminals. It supplies propane by rail, pipeline, cavern storage, refinery production, and fractionation facility production. Customers are offered product procurement, logistics assistance, and price risk management planning.
“You can truly learn something every day. It changes so fast,” Byrns said. Her customers and co-workers have become trusted allies acting in tandem to learn and solve problems. Of course, there are always challenges.
“I would say trying to get the retail customers to have enough storage is a challenge. In cold weather, to have more storage pays for itself 10 times over. Prices can change overnight. If they are going through a lot in a day and can’t get supply to customers, that’s a problem. “
As a woman in the propane industry, she has overcome some hurdles. “I would say being a woman can sometimes be an issue. You do have to prove yourself. I feel like I am talked to differently because I am a woman. There are extra steps a woman has to take because it’s a male-dominated industry.”
She added, “I am very detailed orientated, and I have good instincts so I believe these are things that have helped me gain the trust of my customers.”
Byrns has also gained customers’ trust by being a responsive partner. “It’s a not a 9-5 job; it’s a 24/7 job. I’m tied to my phone quite a bit. A carrier may call at 5 a.m. with a problem or in the winter a customer will call at 7 p.m. and need more gas.”
Although she admits work-life balance can be difficult, since she doesn’t have children or a lot of other responsibilities, the demanding position works for her. “I lead a pretty simple life, so having work keeping me busy is fine.”
When she’s not working, Byrns loves being outdoors walking and running with her dogs. She and her boyfriend enjoy fishing, mainly catching crappie and bass, and traveling to Florida once a year. Spending time with her family is also a priority. A native of Kansas City, she lives close to where she grew up, with her mother, father, and brother and his family nearby.
“I’m sure I’ll stay with Alliance my whole career. I love the people I work with. We’re like a family,” Byrns said. “I don’t know where Alliance will be as a company in 10 years, but I have no interest in moving.” — Karen Massman VanAsdale
The program was conducted in a “world café” structured conversational process for knowledge sharing. The process includes groups of people discussing topics at several tables, with individuals switching tables periodically and getting introduced to the previous discussion at the new table by a “table host.” The invited participants were people with expertise in one or more of five areas: agriculture, commercial, off-road, on-road, and residential. “To maximize efficiency, webinars and PowerPoint presentations were provided so that members would come together having reviewed important information prior to the meeting,” Kidd explained. “Very focused discussion was key to successfully getting input from these various industry experts.”
During the first afternoon, participants attended a general session and then participated in a leadership panel led by Jennifer Goldbach of Rhoads Energy (Lancaster, Pa.), Michael Hopsicker of Ray Murray Inc. (Lee, Mass.), Tom Knauff of Energy Distribution Partners (Chicago), Andy Peyton of Superior Plus Energy Services (Rochester, N.Y.), and Dan Richardson of Conger LP Gas (Tifton, Ga.). Market Breakout Sessions for the five areas were held for the duration of the summit, with participants able to move from group to group.
“Having been to many PERC advisory meetings over the years, I was pleasantly surprised at how the Propane Markets Summit was designed,” said Steve Ahrens, president and CEO of the Missouri Propane Gas Association and the Missouri Propane Education and Research Council. “Participants were assigned homework to do beforehand, which was essential to focus on specific issues rather than veer into irrelevant conversations. Given the pace of the Summit, it was necessary to stay on task. We didn’t spend time reviewing existing dockets, but instead used an aggregation of viewpoints to seek out opportunities to meet the needs of current customers. While not a networking event, the presence of many non-propane industry partners provided important new perspectives from beyond the usual propane voices.”
Goldbach added, “It was a refreshing couple of days during the ‘non-winter’ of 2020 to spend with like-minded people trying to find new ways to build gallons regardless of the weather.” Ed Hoffman, president of Blossman Services, agreed. “It had a lot of free thinkers and problem solvers. It was exciting to be there.”
“It was good to have people involved in manufacturing and sales there as well as the propane marketers,” said Richardson. “The manufacturing people gave us many ideas that can help us. For instance, it was pointed out that with 3500 retail propane marketers, if a large portion could each commit upfront to buying one propane vehicle, it would make production very worthwhile.” Richardson also noted that there was a lot of good meat to the discussions. “We talked strengths and weaknesses. There were views and opposing views. It was not just a lot of industry cheerleading.”
Shari Pedersen of N & S Tractor Co. (Yuba City, Calif.) also has a lot of retail propane experience after 16 years with Allied Propane (Dixon, Calif.). “I had never attended a PERC meeting or event,” Pedersen said. “Michael Newland [PERC’s director of agriculture business development] invited me. It was a great opportunity to meet with people from all over the country.” Using the knowledge gained from her years on the job in California, she shared examples of propane being a great alternative to electricity due to many rolling blackouts. “With all the fires we’ve had, PG&E [Pacific Gas and Electric] has turned the power off on many occasions. Farmers want to go off the grid, and propane engines provide a great opportunity for that. PERC wanted to know how we felt they could help us. We discussed the importance of continuing farm incentive programs and providing the right marketing materials.” Pedersen feels that what’s happening in California may once again spread nationwide. “More farmers across the country may decide defying the ‘electrify everything’ movement and going off the grid is the right thing to do. This will likely happen anywhere when power rates escalate.”
Pedersen also noted that Tier 4 diesel engines are now the only option for diesel as older ones are discontinued. “These engines have been problematic and expensive. They have been difficult to run and this presents an opportunity for propane.”
“I really enjoyed the insight from builders,” said Lindsey Stansfield, director of marketing for Paraco (Rye Brook, N.Y.). “We are hearing a lot about zero net energy, but successful builders say consumers really want a ‘healthy home’ and propane can be a major component in that process.” With both architects and builders in attendance, Stansfield believed a lot was learned about the latest thinking of experts regarding where propane can truly fit into the picture for current and future homes. “Many felt it was not reasonable to expect homebuyers to just use one fuel. With propane always a great backup during power outages, we need to show we can be that backup but also much, much more. That’s the secret the electric world knows but doesn’t want to share.”
Paula Laney, director of safety and training for Energy Distribution Partners, agreed that the zero net energy movement is a recipe of problems for the homebuyer. “With all the additional codes this will impose on housing, the homebuyer will foot the bill for all the compliance.” She believes that homebuyers will also be pushed to consider wind, solar, and other types of renewable energy. “We need to be aggressive about how we can be a benefit to the homebuyer in order for propane to stay in the game.”
Stansfield mentioned Bill Owens of Owens Construction (Worthington, Ohio) who attended the summit as being particularly helpful. BPN caught up with Owens in Flagstaff, Ariz., where he is working for a magazine on a promotional home that will eventually become his retirement home. “After 40 years of building homes, it has really been during the last four years that I have been introduced to the benefits of building with propane,” Owens explained. “With my business in Ohio, I’ve more recently been working on this Arizona home, which is being built near the end of the grid. I learned that propane is a good fit for the backup generator, backup furnace, and backup heat pump for sure.
Along the way, I have found it can be very useful in many more ways. The more I learned about propane, the more I felt that homebuilding has a very solid place for propane. I had not realized its distinctions from natural gas.” Owens is concerned about the movement toward full electrification of the home. “Looking at the blackouts in California, we can see quickly we don’t want to put all of our eggs in one basket, but the diatribe of the ‘green meanies’ is all or nothing and they wear it on their sleeve. Just as in politics, some won’t be your friend if you don’t agree on this issue.”
Laney was also critical of electric propaganda that suggests fossil fuels should play no role in the use of electricity. “They use coal to produce electricity and that sends much more carbon into the atmosphere than propane does. This is like telling us that hamburger doesn’t come from a cow.” Laney believes well-trained propane personnel can educate consumers and other stakeholders. “I felt the meeting was a great opportunity to get the process rolling. CSRs should be able to recite the basic argument for propane. We need the next generation to think of propane as central to their future, not just grandpa’s fuel.”
Laney also found the discussions on autogas enlightening. “There were representatives from the Fulton County School District in Atlanta. They talked about the importance of encouraging schools to at least dip their toe in the water. They said school boards listen to numbers, both dollars and safety statistics. Once they see a way to have savings as well as safety, they are pleased to shift funds to compensating more quality teachers.”
“It will be interesting to see how the results shake out,” Ahrens said. “I’m expecting that the process will identify many familiar opportunities, but with new strategies and engagement suggested by the diversity of viewpoints.” Ahrens feels the Propane Markets Summit signals the Council’s renewed commitment to generate new gallon growth across the board however possible. “This may happen by deploying additional resources strategically, setting aside lower-priority programs, and leveraging the many benefits that propane offers right now,” he added. “There is a sense of urgency, of not missing our moment, and I believe that the PERC team will develop several unique responses to the challenges we face.”
Unbeknownst the roadblock that would halt their progress, according to Kidd, the Propane Council wanted to use the ideas from the meeting to further hone its action plans moving forward to fund and execute plans to sell more gallons. A 16-page document of recommendations was later prepared for the various PERC advisory committees to consider and decisions about next action steps are still being considered. “Ultimately, we brought together some new participants to hold a positive event and get some good ideas for action plans going forward.”
The COVID-19 pandemic delayed some in-person meetings of advisory committees where the 16-page document was to be discussed. Once the next steps are formulated and approved, BPN will report on the progress. — Pat Thornton
“I take my job very seriously, but I try to have a little fun with it as well,” she said. Weekly social media posts highlighting employees, clever marketing campaigns, and special events are just a few tactics Stansfield and her team use to help engage and educate customers and employees.
“What I love most about propane is what it affords people the ability to do. I am trying to help the people I work with know we’re not just delivering gas. It’s much deeper,” she said. The purpose is what people are able to do because they have propane in their homes and businesses—from things as simple as people being able to cook hot meals for their families to things as big as water parks offering heated pools.
An experienced marketing professional, Stansfield was new to the propane industry when she started her career at Paraco two years ago. She began working as a creative marketing manager, which quickly morphed into her current position.
At Paraco, she is responsible for all internal and external communications, marketing, and public relations for the family-owned propane company—one of the largest in the Northeast. She leads and implements the company’s brand strategy working closely with leadership, sales, and customer service teams. With 27 locations and more than 420 employees, Paraco provides more than 60 million gallons annually to more than 120,000 customers in eight states.
Stansfield’s interesting and impressive journey began with a career in television production, then as a graphic designer and marketing coordinator for Family Circle and Midwest Living magazines based in New York City.
She took a brief hiatus from traditional graphic design and marketing to pursue creativity in another way: baking cakes for Buddy Valastro’s “Cake Boss”—and even competed on “Cupcake Wars.” “We didn’t go home a winner, but we did make it to round two,” she said.
Her next stint was at the YMCA Corp., where she oversaw marketing for five different Ys in New Jersey, and then to a vocational school where she used her creativity to help change the stigma associated with career and technical education.
Today, she is a member of the Propane Gas Association of New England (PGANE) and Propane Education & Research Council (PERC) Advisory Committees, sitting on the Market Development and Outreach Working Group. She also recently participated in this year’s Propane Summit with 100 marketers and manufacturers having innovative discussions about the industry. “I was really quite honored to be a part of the conversation,” she said.
Stansfield loves the challenge of learning something new, and she actively pursues personal and professional development opportunities. “Paraco is really forward thinking. They want to keep progressing when it comes to safety, service, technology, marketing, and customer’s experience,” she said. “They offer a significant amount of opportunities for their employees; they want to see everyone succeed. I’m really grateful for that.”
One of the unique and exciting parts of marketing in the propane industry is how weather-based it is, she said. “We really haven’t had a winter this year, so it’s important to have more than just plan AB&C. A marketer has to be able to pivot quickly so you can reach your numbers.”
Stansfield lives in New Jersey with her husband, 8-year-old daughter, and 6-year-old son.
“Work/life balance: I think it’s a tough mix, especially if you have children. I am lucky that I am able to work from home several days a week; it allows me the ability to be home with my kids every night,” she said. “We’ve made it work really well. There’s a lot of juggling. If I’m not at work, I’m spending time with my family.”
Her future goals include pursuing a master’s degree in marketing analysis, sitting on an industry board, and helping the world realize how important propane is as a sustainable energy. — Karen Massman VanAsdale
CHANGES IN PRODUCER/WHOLESALER APPROACH
However, the winter of 2013-14, which saw huge distribution challenges in the U.S. and dramatic price spikes for several weeks, was a wake-up call for marketers to know very well their supply situation and have contingency plans. As more years passed, the higher volume of exports kept marketers’ attention. As some long-time wholesale suppliers became more focused on moving high volumes of propane to export, retailers began to find these companies less concerned about meeting their needs. In our January 2020 issue, Marty Lerum, managing partner at Propane Resources, told BPN, “Some producer/wholesalers are opting out of doing small contracts and spot loads for retail propane marketers. This puts more risk on the retail propane marketer. While we produce more propane than ever before in the U.S., the propane distribution system is actually less flexible to deliver to the retail propane industry.”
Lerum noted that many producer/wholesalers are focusing more on selling larger volumes to larger buyers that will guarantee a rate or return on their investment, leaving more risk on the shoulders of the retail companies. Last winter a series of challenges in the Iowa region left retailers scrambling amid an early cold spell and heavy crop drying demand following a late planting season after flooding. For only the second time in history, the National Propane Gas Association (NPGA), the Iowa Propane Gas Association, and other pipeline stakeholders participated in an alternative dispute resolution procedure with the Federal Energy Regulatory Commission (FERC) that resulted in pipeline operators facilitating additional deliveries of propane into Midwestern markets.
The dust had barely settled on a resolution to Iowa challenges as a page turned into a new decade and more supply challenges for U.S. retailers appeared on the horizon with producer/wholesaler concerns. And then came COVID-19, disrupting life for the entire country and world. While many industries took a huge hit in demand, the U.S. retail propane demand was only mildly affected.
PROPANE PRODUCTION DOWN SIGNIFICANTLY
But no matter how passionate propane marketers are about propane, retailers were reminded on a June 15 NPGA Board Meeting webinar by Steve Kossuth, chairman of the NPGA Supply and Logistics Committee and UGI Corporation’s (AmeriGas’ parent company) vice president of global supply, of propane’s status on the energy food chain: “Nobody produces propane on purpose. As a by-product of natural gas processing and crude oil refining, EIA data shows propane production down by 12% since February,” Kossuth said. “This is a complex time for understanding our market’s fundamentals: production and demand are down; yet, inventories and prices are up. PADD 1 inventories on the East Coast are higher than their five-year averages signaling the market’s belief in supply shortages and storing at current values will ‘pay off.’”
Kossuth noted that there may be more questions than answers about what is in store for the market:
- In a post-COVID-19 world, what does upstream production look like?
- Will global demand support U.S. exports?
- Will there be enough industry-wide logistics to support moving supply to areas of demand?
- Will Mother Nature cause higher demand due to crop drying and heating requirements?
Without the ability to correctly predict the market, Kossuth said that data and education are the best ways to combat uncertainty. “We can learn from our past,” he said, noting the winter of 2013-14 as an example of many lessons learned. “Proactive preparation is the key to success. More diverse opinions and vantage points from our supply chain will allow our membership the best opportunity to accurately assess risk within their specific supply chain.”
Kossuth announced four separate webinars would be presented July through September to educate marketers:
- Upstream Production and Downstream Implications in July with BP’s Josh McCall and RBN’s Rusty Braziel
- Over-The-Road Transportation Panel/Q & A with three or four panelists from different regions of the country
- Midstream Logistics Panel with Enterprise’s Tug Hanley, Blackline’s David Herr as well as panelists from Targa, Crestwood, and others.
- 2020 Harvest with NPGA’s Mike Caldarera and PERC’s Mike Newland with other ag reps.
BPN spoke with John Powell, senior vice president and head of Kansas City-based Crestwood Services’ Marketing, Supply and Logistics Group, about upcoming challenges for retail propane marketers. “The main issue is production of propane,” Powell said. “With the recent downturn in production due to dramatically lower pricing, rig count across the country is the lowest it has been in years, so the excess supply situation we have all experienced will not be the case going into winter.
“With lower overall U.S. production at both refineries and fractionators, all parts of the country could experience supply shortages if proper supply plans are not made before the season,” he added. “Lines at traditional facilities could be longer than normal and you might find yourself having to drive further distances for reliable supply. This will require everyone to consider some contingency gallons across your operating footprint to ensure adequate supply. Additional storage gallons in local regions—along with contingency plans for propane supply coming from supply locations delivered in by rail or pipe—will require additional planning as those supplies will typically take an extra 30 to 60 days to arrive as well as additional costs.”
“Higher overall supply costs year-over-year and, more specifically, higher supply costs at rail terminals are two major changes marketers are seeing this year,” said J.D. Buss, trading manager at Twin Feathers Inc. (Overland Park, Kan.). “This second point has generated increased interest in supply from traditional pipeline sources: Mapco, Teppco, and Dixie terminals. Pipelines have been a part of the supply landscape for years, but with the advent of increased shale propane supply, these traditional terminals lost some importance.”
As retail firms migrate back to the traditional pipeline source, Buss makes these suggestions:
- Know if your supplier has a strong volume history on the pipeline. Just because pipeline terminals may be regaining popularity, that doesn’t mean their systems have changed. Allocation rules for pipelines still rely on shipping history and that is a vital statistic to have included in your winter supply planning.
- Anticipate a coming allocation on the pipeline. In the “good ol’ days” one could pick a week or month when allocation would consistently occur on a pipeline. That has become a bit less frequent in prior years and can generate the belief that it is less likely to occur in the future. With potentially more firms relying on the pipeline this year, allocation risk does increase.
- A pipeline is not a storage facility. Before you say “duh!” and stop reading, consider this: if your business has a higher winter supply ratio and your main (and only) supply option is a pipeline, you are inherently treating that pipeline as a storage facility. Stepping back to the “good ol’ days” we mentioned above, when allocation would hit, the actual pipeline ratios would usually not be able to meet the higher winter needs. If you need winter storage gas, incorporate a storage facility or option into your supply plan.
“From March 2020 forward, much of the concern in the propane market has been centered on actual and future decreases in propane supply,” Buss said. “This occurred while domestic U.S. demand in the Midwest to Eastern U.S. began to surge in April and early May; and we saw a short-term burst of global LPG demand from countries seeking to bolster supplies during stay-at-home orders. These two major items worked to generate a rally in propane prices and keep the focus squarely on future supply issues.”
Buss noted that as the famed Paul Harvey would say, “Here’s the rest of the story.” He stated first and foremost that COVID-19 has decimated tourist demand. “Within the North American continent, we see LPG demand in Mexico’s tourist locations suffering huge declines,” Buss said. “On the coasts of the U.S. there are restaurants that are seeing less propane demand. COVID-19 economic impacts also stretch to industrial regions that are or will likely be seeing lower cylinder usage of propane.”
Two counterpoints, according to Buss, to these demand losses are the possibility of increased use for home heat due to quarantine and petrochemical consumption. “Home heat demand did increase in April and early weeks in May in some regions of the U.S. and Canada,” he said. “In fact, if the ‘work-from-home’ model extends further into winter, the home heat demand could rise. The petchem argument however, gets a bit fuzzy when you consider that petchem demand is ultimately driven by consumer demand. If consumers are not purchasing at higher levels, petchem demand may not be as strong. So, one out of two counterarguments could be valid.”
One further concern that Buss acknowledges has not been discussed much is that lower household incomes could generate decisions to use less heat. “Anyone who recalls the follow-through effects of the 2008-09 winter or even the polar vortex of the 2013-14 winter, remembers that higher propane retail prices ultimately led to consumers finding alternative heating sources.”
REGIONAL CONCERNS IN UPPER MIDWEST
Do some areas of the country represent bigger challenges than others? Several supply experts including Anne Keller, managing director of Midstream Energy Group (Sugar Land, Texas), suggested that PADD 2, which represents the area north of Conway up to the Canadian border, is and will likely be undersupplied this winter. “Edmonton pricing had been running at a 26- to 29-cent per gallon discount to Conway, but lately prices have been more even,” Keller said. “The area from Conway to the Upper Midwest has inventory at the bottom of the five-year range.” She cited the movement of more propane out of Edmonton to the West Coast to be shipped overseas, making less available to the Upper Midwest. “The forecast reduction in total supply in PADD 2 would essentially eliminate the seasonal inventory used to carry winter sales that can range from 2.5 to 4 times the gallons higher than summer levels,” Keller said.
Noting that Iowa had supply challenges last year, Iowa marketers and state leaders had a conference call on June 17 to discuss the situation in the region. Jeff Petrash, NPGA vice president and general counsel, was on the call and said that increasing storage was one topic of discussion. “It was considered that state governments in the region should implement a tax incentive for boosting storage levels,” Petrash said.
In a conversation with BPN, Petrash said he has been spending more and more time this year on supply concerns. He stressed that NPGA will do as much as it can to support members in having the information they need to make good supply decisions. “We’ve been getting good information regularly from IHS to share with the membership; our Supply and Logistics Committee has been having monthly conference calls; we’re providing information on wait times at terminals; and we hope members will participate in the webinars July through September.” — Pat Thornton