The propane industry is engaging much more directly in the conversation about how to address climate change, in part to ensure it doesn’t become obsolete in a zero-carbon world.
The title of the first session of the industry’s annual meeting in Washington this year put it perhaps most bluntly: “Innovate or die.” The daylong conference gave a glimpse of a fossil fuel industry that’s looking to shift its business fundamentally to ensure its product keeps a spot in and even helps the world transition to a net-zero greenhouse gas emissions future. Democrats in Congress and in the race for the White House are presenting aggressive plans to slash emissions consistent with that trajectory.
But it’s also an industry that itself admits it falls through the cracks politically because it doesn’t have the same lobbying muscle as the oil and natural gas sectors. Propane producers don’t have a lot of room to fight the energy transition. Instead, they need to figure out how to move with it.
“We are just now beginning to stitch the story together,” said Tucker Perkins, president and CEO of the Propane Education & Research Council. “We really are the fuel of choice, and when the conversation is very narrowly defined to impact on the climate, we can keep the conversation on propane. Easily.”
In the United States, propane is used mostly by the industrial, residential, and commercial sectors, according to the Energy Information Administration. The latter two sectors use the fuel primarily for space heating and other appliances. In contrast, the industrial sector uses propane as a feedstock to make petrochemicals, plastics, and other products. Only a small amount of propane is used as automotive fuel in the U.S.
The industry faces a considerable challenge. Currently, most propane in the U.S., the world’s largest producer and exporter of the fuel, is made as a byproduct of processing natural gas, according to the EIA. Burning propane also emits carbon dioxide, but its footprint is smaller than other fossil fuels.
Burning propane is more efficient than burning coal, oil, or natural gas, which means it releases fewer emissions, according to an analysis conducted by the Gas Technology Institute in 2017. For example, propane furnaces can cut fuel consumption and greenhouse gas emissions in half compared to electric heating, the analysis said. The report also found that propane used in vehicles can reduce emissions by nearly 13%.
Even so, EIA data shows that overall emissions from liquefied petroleum gases (such as propane, butane, and ethane) have risen in the U.S. since the early 2010s, to just under 100 million metric tons of carbon dioxide.
Even an energy analyst presenting at the propane industry’s conference projected a minimal role for LPGs in a future where the world meets the temperature targets of the Paris climate agreement.
LPGs could play a role in decarbonizing maritime transport, according to a midcentury energy transition outlook from the firm DNV GL.
“The real key is looking at the share of gas and where it’s going. Can you decarbonize the sources of where you’re getting it?” Steven George Sawhill, DNV GL’s director of U.S. government and public affairs, told the propane conference.
Perkins, though, sees a future in which propane helps to decarbonize other harder-to-reach sectors such as heavy-duty transport. He also anticipates propane playing a more significant role in producing electricity by replacing dirtier diesel generators to power homes and neighborhoods.
And eventually, he wants to decouple the propane industry from fossil fuel production, deriving the fuel instead from alternative sources that would be more beneficial to the environment.
To that end, he and others in the industry are relying on technology innovations, several of which were presented at the conference. One company, for example, is piloting a process that would capture methane, a potent greenhouse gas and the main component of natural gas, and transform it into propane.
Jerry Pellizzon, the founder of PlasMerica, said the U.S. oil and gas industry is releasing hundreds of billions of tons of methane into the air through flaring. At the same time, the propane industry’s growth has remained relatively flat.
He told propane industry representatives his technology could flip the script. “We’ll be happy to take it off their hands,” Pellizzon said of the methane waste.
The industry is also looking to biomass feedstocks and even to hydrogen to help produce lower-carbon propane — a so-called renewable LPG.
“You make massive steps forward with a switch to LPG” from fuels like diesel already, said James Rockall, CEO and managing director of the World LPG Association. Rockall is bullish about renewable LPG, which he says could be used to meet half of the global demand for LPG by midcentury.
Nonetheless, one of the most significant barriers to the propane industry’s hopes for innovation is policy.
Propane industry representatives say policymakers have excluded propane from receiving the same sort of incentives as other technologies. Local officials have lumped propane together with natural gas and heating oil as dozens of cities around the country eye bans on fossil fuel infrastructure in new buildings in favor of electrified heating and other appliances.
“If the government starts picking winners and losers … these startup companies that are developing this technology, they’re not going to have the incentive to do any sort of development,” said Steve Kaminski, president and CEO of the National Propane Gas Association.
The industry is engaging in several policies on Capitol Hill this year that it sees as attempts to level the playing field, Kaminski added. For example, propane producers are lobbying lawmakers to make sure their fuel isn’t cut out of legislation boosting refueling infrastructure.
Propane producers will also be pushing for carbon labeling in Congress this year to even the scales, Kaminski added. Their hope in part is to show that it doesn’t make sense to electrify everything to cut down greenhouse gas emissions if the bulk of that electricity is coming from natural gas and coal.
More broadly, propane producers are also looking to build a bigger coalition, teaming up with other liquid fuel producers such as advanced biofuels. They are also trying to find solid footing in the climate policy conversation and with well-established zero-carbon industries such as wind and solar.
Kaminski said his group participates in Clean Cities Coalitions, an Energy Department-run program helping cities access alternative transportation fuels, and has a presence on the board of National Clean Energy Week.
Nevertheless, for some climate activists, it’s unlikely they’d ever see propane as part of a zero-carbon solution. And ultimately, if LPG producers can’t decarbonize their production process quickly enough, they could struggle to remain in line with the world’s climate goals.
Propane producers, though, emphasize that while the scope of LPG is more nuanced in developed economies such as the U.S. and Europe, it’s much broader across the world, where developing nations are looking for cheap, cleaner fuels to pull them out of energy poverty.
The LPG industry “is one of the, if not the, largest fuels for the domestic sector of the world, and it’s also the largest alternative transport fuel in the world,” Rockall said. “We fuel the lives of probably 3 billion people in the world, which is a lot more than you can say for something like natural gas.”
