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Sunday, April 21, 2024

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Why Market Renewable Propane for Your Business?

by Donald Montroy, Bergquist Inc.


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Offering a viable energy solution to the effects of climate change

The scrutiny of traditional fossil fuels is not going away. Our industry can continue to fight it, advocating for “ban the ban” legislation across the country, but so far, we haven’t had a lot of success. Wisconsin Governor Evers recently vetoed three “ban the ban” bills, stating that they “preempt local control and undermine trust in local governments across the state.” As time goes on, we’re almost certain to see an increase of bans of gas appliances in new construction across the U.S. – the reversal of Berkeley, CA’s new gas ban notwithstanding.

Coupled with increased scrutiny of traditional fossil fuels is the push to electrify everything. The Department of Energy has recently proposed new standards to increase both electric water heater and gas-fired instantaneous (tankless) water heater efficiency. While gas-fired tankless water heaters using condensing technology will meet the proposed new standard, the change is, ultimately, a thinly veiled effort to nudge the U.S. market toward electric heat-pump water heater use and away from gas.

We’re all aware that policies to move away from gas-fired appliances don’t stop inside the home. The number of electric and hybrid vehicles available today is really quite astounding. Much of that production has less to do with consumer demand and more with automakers taking advantage of federal grants, all the while knowing that the majority of those electric vehicles simply will not sell. Electric vehicles are cost prohibitive, have limited range and have performance issues. That doesn’t change the fact that government incentives to produce, sell and purchase electric vehicles will only continue to grow.

Electric appliances and vehicles are not the only technologies prepared to take advantage of the scrutiny of fossil fuels. Solar panels, wind turbines, geothermal heat pumps and blue and green hydrogen products are all experiencing an increase in usage to the detriment of traditional fossil fuels. It seems anything sustainable is en vogue today. Fortunately, we have a sustainable product to compete.

Renewable propane offers a tremendous opportunity to showcase our industry as a viable energy solution to the effects of climate change. Although conventional propane itself is relatively clean, renewable propane, originally sourced from biomass such as cooking waste or animal tallow (fat), is even cleaner – considerably reducing its carbon-intensity (CI) score. Carbon intensity, in very simple terms, is the measure of carbon emitted to produce a unit of energy. Especially encouraging is comparing renewable propane’s carbon intensity with that of electricity. According to the Propane Education & Research Council (PERC), the national average of electricity consumed from the grid today has a CI score of 130 grams of CO2 equivalent per megajoule (work energy). Conventional propane has a CI score of 79. Renewable propane, on the other hand, has a CI score of 20.5. That’s considerably lower than electricity consumed from the grid in every state except Vermont (CI score of 2).

Almost all of the electricity consumed in the U.S. today is transmitted through large, shared-utility grids. Unfortunately for consumers, electric grids are not entirely reliable. Brownouts during peak demand are not uncommon. Increasing grid demand with more electric appliances and electric vehicles will almost assuredly increase the frequency of brownouts.

Wind power and solar power are completely dependent on Mother Nature which, at times, can be unreliable. While there have been improvements in geothermal technologies, they still seem to struggle with producing adequate heat on the coldest of winter nights. The reliability and potential ubiquitousness of renewable propane gives it a competitive advantage over other sustainable energy sources. It isn’t dependent on a massive grid infrastructure. It isn’t dependent on the weather. It doesn’t work intermittently or under solely ideal conditions. Renewable propane is completely reliable – anytime, anywhere.

The simple fact is no single energy source is perfect for our climate future. The climate crisis is complex and takes a complex solution to resolve. Multiple sustainable energy sources are required to combat climate change.

Due to various incentives, the renewable propane consumed today is primarily reserved for autogas applications. Autogas is ideal for fleet vehicles and fleet-vehicle infrastructure. School buses, public buses, taxi cabs and municipal vehicles that begin and end their routes in the same place every day can benefit from renewable propane power. While the environmental benefits of renewable propane are more obvious, oftentimes the economic benefits are not. School districts, local governments and companies that operate private fleets should be reminded that maintenance costs and infrastructure (namely autogas dispensing units) for renewable propane are considerably less expensive than for electric vehicles, diesel and gasoline. An added benefit is that renewable propane transportation is not dependent on problematic lithium-ion batteries like electric vehicles are. Mining for lithium is an environmental and social dilemma to which vehicle manufacturers and their battery suppliers must be held accountable.

Propane marketers’ acceptance and promotion of renewable propane may soon be necessary to maintain the market share we already have. As the scrutiny of traditional fossil fuels continues to grow and demand for conventional propane declines, more sustainable fossil fuels like renewable propane have a platform to show they are ready to take on climate change now and not in the distant future. Renewable propane is necessary to combat real climate problems, for real people, around the world today.

Perhaps the single biggest advantage of renewable propane is that it is a complete drop-in energy source for conventional propane. It is chemically identical: C3H8. It can be blended with conventional propane inventory. There’s no need to alter or change seals, valves, orifices, or any other equipment in existing bulk-storage facilities, transports, bobtails, tank sets, or propane appliances.

Because renewable propane is a complete drop-in energy source for conventional propane, renewable propane will easily move from mostly autogas applications today to space heating, water heating, electric-power generation and so on. More potential renewable propane applications, simply stated, means more opportunity for gallon growth. Having environmentalists, more legislators and the general public on our side, rather than fighting us, is paramount for industry growth. To paraphrase an older PERC tagline, renewable propane can do that for us.

One important aspect to note about renewable propane is that it’s not as innovative as we may think, and that’s a positive thing. Again, renewable propane is chemically identical to conventional propane. The only difference is its feedstock. Whereas the majority of conventional propane consumed in the U.S. today is fractioned from natural gas, renewable propane is a byproduct of renewable diesel or sustainable aviation fuel. According to PERC, renewable diesel and sustainable aviation fuel are produced primarily from vegetable oils, used cooking oils and animal tallow. It should not be lost on anyone that recycling the biomass used in the production of renewable diesel and sustainable aviation fuel – and eventually renewable propane – is another environmental win for the product and our industry.

The future production of renewable propane looks even brighter. The cover crop camelina looks poised to help increase the supply of renewable propane. Camelina is a waste-free plant grown in mostly northern climates and does not compete with crops used in food production.

Since renewable propane is chemically identical to conventional propane and can be used everywhere conventional propane is used, a complete rebrand of our industry – and your business – is unnecessary. In fact, it may be unwise. Conventional propane is already incredibly reliable, greener than other fossil fuels and easily transportable. Propane’s brand – how consumers think of our industry – should stay very similar to what it is today. We’ve done a pretty good job of building brand equity. With renewable propane, however, we have an even better product. The only thing we should change is an updated message of the sustainability of renewable propane. Everyone should know the environmental, climate and common-sense benefits renewable propane offers consumers (and society) right now, as well as the generations that follow.

Donald Montroy is Vice President of Marketing for propane equipment supplier Bergquist, Inc. He can be reached at donald.montroy@bergquistinc.com or 616-460-3299.


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