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Propane Industry’s Market Metrics Initiative Reports Consumer Education Campaign Has Positive Return on Investment
Washington, DC (June 10, 2005) — The propane industry’s investment in consumer education activities has resulted in more than 29,000 new propane households and 22 million more gallons of propane sold annually, according to a report received by the Propane Education & Research Council at its June meeting in Palm Springs, CA.
Representatives from Energy and Environmental Analysis, Inc. (Arlington, VA), reported their findings as part of the Market Metrics Initiative (MMI), the comprehensive analytical effort undertaken by the propane industry. The MMI, which began in September 2003, had three main objectives, including revising the American Petroleum Institute’s Natural Gas Liquids and Liquefied Refinery Gases Survey, creating a propane demand database to measure market performance with consumption data broken into sectors and applications, and measuring the return on investment of funds used for PERC’s consumer education program. According to the metrics, the $23.1 million spent on consumer education activities between mid-2001 and mid-2003 had a 17.5 percent return on investment, or a net present value of $35 million for the industry
“Using the available data, the analysis indicates that there was an increase in propane households by 2003 resulting from the PERC programs,” said Bruce Henning, Energy and Environmental Analysis, Inc.’s director of regulatory and market analysis.
“I’m extremely encouraged by the report from the Market Metrics Initiative team,” said Council Chairman David Lugar, AmeriGas Propane, Inc. (Houston, TX). “It is very gratifying to see these results indicating the propane industry has gained new customers, especially considering we did not anticipate seeing results in the residential marketplace until late 2003. We are optimistic these trends will continue to improve.”
Projections from the MMI propane demand database, which were based on propane sales and use trends from 1998-2003, anticipates the total demand for odorized propane is likely to be almost flat between 2004 and 2006, with less than 1 percent per year in total growth. Henning said growth in the propane site-built households will be offset by improvements in efficiency and the decline in manufactured housing.
“It certainly exceeded our expectations to get this much information this soon and have a high level of confidence that we are spending the industry’s money wisely,” said Daryl McClendon, chairman of PERC’s Consumer Education Advisory Committee. “It appears we are headed in the right direction, and we appreciate the feedback as we begin our planning for 2006 and beyond.”
The Council also received a report from legal counsel on the recent U.S. Supreme Court decision to allow the beef check-off program to continue its advertising campaign and that case’s impact on PERC’s consumer education campaign. Lugar said the Council welcomed the most recent decision, which was the third such case since the Propane Education and Research Act was introduced in Congress.
“We are highly encouraged by the court’s fundamental finding that check-offs can fund generic advertising campaigns,” Lugar said. “The beef decision is particularly meaningful because we’re at a critical point of momentum, and the work that we’ve been focused on for the last three to four years needs to continue for us to realize the benefits that have always been envisioned.”
In other Council business, the Council bid farewell to three members: public member John Ehlers (San Antonio, TX); John Kamps, Kamps Propane (Manteca, CA); and Tom Nunan, Suburban Propane (Oceanside, CA).
During the week of July 11, the Council will hold elections for its 2005 officers, with new officers being installed at the July Council meeting. Nominated for office include:
- Chairman – John Gawronski, Dynegy Midstream Services (Houston, TX)
- Vice Chairman, Marketers – Glenn Saunders, White Mountain Oil & Propane Inc. (North Conway, NH)
- Vice Chairman, Producers – David Wunch, SemStream, L.P. (Tulsa, OK)
- Secretary – Ken Green, Oklahoma Liquefied Gas Co. (Seminole, OK)
- Treasurer - Charles Revere, Revere Gas & Appliance (Hartfield, VA) and Michael Schwartje, ConocoPhillips (Houston, TX)
The Council approved funding for the following grants:
Docket 11729 – Harvest Preparation Demonstrations and Tests Using Prototype Thermal Defoliator, Paul A. Funk, $62,500
Docket 11730 – John Deere Hay Rehydration-Phase II, John Deere Ottumwa Works, $700,000.
Docket 11732 – Conservation Innovation Grant Application and Funding Request, Propane Education & Research Council, $40,000.
Docket 11773 – End User Training Materials for the Safe Operation of Mobile Propane-fueled Agricultural Equipment, Gas Training and Development, $45,630.42.
Docket 11783 – Industry Programs VTR Modifications, Propane Education & Research Council, $50,140.
Research and Development
Docket 11653 – Acoustic Stop-Fill Instrument for LP Gas Tanks, Adept Group, $117,515
Docket 11687 – Installation and Operation of an Enhanced Off-Grid Solid Oxide Fuel Cell at Exit Glacier, Alaska-Addendum to Docket 10864, National Park Service, $40,000
Docket 11724 – Initial Proposal for Support of a 5kW Continuous Duty Rated Propane Generator at Exit Glacier, Kenai Fjords National Park, Alaska, National Park Service, $45,000
Docket 11726 – Extending Bobtail Requalification Period Phase I, National Propane Gas Association, $133,800
Docket 11727 – Cylinder Vaporization Rates Comparison, National Propane Gas Association, $36,118.70
Docket 11728 – Study of Alternative Tank Materials, Battelle Memorial Institute, $67,000.
The Council approved 38 state rebates from 15 states totaling more than $1.1 million. Of that amount, over $256,000 in Consumer Education Partnership with States Program funds (matching dollars) were granted to seven states.
The Council will next meet on July 21-22 in Washington, DC.