LP Gas, November 2011

SENIOR EDITOR BRIAN RICHESSON Concern in Kansas City NPGAs fall board of directors meeting takes on a negative tone One part of that evaluation might center on propane autogas another area of concern brought forward by NPGA Chairman Carl Hughes of Inergy According to Hughes some members believe that too much energy and focus have been given to the motor fuel The questions abound Why promote another market Why promote a segment that wont benefit everyone Why is the Propane Gas Act proposed legislation that extends federal alternative fuel tax credits for five years so important Hughes strongly supports the legislation for three reasons The propane industry is already multi segmented and many people are excited about autogas its an actionable item and has the potential to succeed and the industry must prepare for an energy battle in Washington and keep pace with natural gas positioning As always Charlie Ory of Aero Propane Gas Co in Mesa Ariz did his best to lighten the mood during the marketers meeting offering a marketing campaign that claims natural gas causes dandruff Attendees appreciated the gesture and maybe the words later from NPGA President and CEO Rick Roldan who said I know theres a considerable amount of angst and we are listening And while were listening were really listening for solutions LPG brichesson@ questex com T he smooth flights in and out of Kansas City for the NPGA fall board of directors and committee meetings werent consistent with the turbulent environment on the ground and in conference rooms Headwinds was the word spoken most often by frustrated industry members trying to sort through the complex nature of todays energy picture and find a place for propane to fit One board member went so far as to call the current situation a crisis because a strong word motivates people and creates urgency to get something done said PERC Chairman Joe Armentano of Paraco Gas in Rye Brook N Y And this was even prior to EIAs release of its Short Term and Winter Fuels Outlook see Datapoints on page 19 which forecasts a 7 percent increase in propane fuel bills compared to last winter only second to heating oils 8 percent Natural gas fuel bills are predicted to rise 3 percent with electricity falling 1 percent The Georgia Propane Gas Association expressed marketer concerns about cost inequities between energy sources making it difficult for members to do business A resolution from the state association asks NPGA to help members understand that their traditional market is changing A state policy where only new customers pay for utility expansion would serve as one possible solution They feel their backs are up against the wall and theyre running scared said Steven Holloway of Modern Gas Co in Albany Ga who described how natural gas companies are running lines to traditional propane accounts Charlie Ory did his best to lighten the mood during the marketers meeting Its a frightening situation for some of these smaller guys All they know what they traditionally have been able to do has been pulled out from under them Marketers from Minnesota and Mississippi echoed Georgias concerns adding that more natural gas supply from shale finds will only lower the competing fuels price and make it more difficult for propane sales Missouri made it known that propane prices in its state are double that of natural gas In the Northeast annual winter infrastructure challenges were supposed to be mitigated by Inergys well documented propane storage project in New York but state regulations have slowed its progress Even the television series CSI Miami piled on to the growing negative sentiment in Kansas City with an episode titled Propane Killer which was noted in meetings The CSIs investigate a propane explosion at a hotel a plot that doesnt exactly help the industrys image Maybe this is our message that we really have to become better businesspeople said Gary France of France Propane Service in Schofield Wis in response to the chatter Things are going to be more difficult Its an opportunity to evaluate your business 6 LPGas November 2011 www LPGasmagazine com