Tucker Perkins is an advocate for propane, a natural gas liquid that is produced by the oil and gas sector. In this episode, Robert talks to Perkins, the CEO of the Propane Education & Research Council, about the strategic importance of fuel diversity, the 3-D energy grid, and why the United States is the “Saudi Arabia of propane.”
Robert Bryce 0:04
Hi, and welcome to the power hungry podcast. I’m Robert rice. On this podcast we talk about energy, power, innovation and politics. And I’m pleased to welcome my guest Tucker Perkins. He is the CEO of the propane Education Research Council. Tucker, welcome to the power hungry podcast.
Tucker Perkins 0:19
Thanks, Robert. I’m looking forward to being with you today.
Robert Bryce 0:22
Well, I hope not to disappoint. So let’s jump right in. I told you just before we started recording that, I’m interested in propane, I’m interested in fuel diversity. But I didn’t warn you that I’m going to ask you to introduce yourself. I’ve told you, you know, delta guests who you are, but give us a assume you’ve arrived at a dinner party or a function and you don’t know anyone there and you have 30 or 45 seconds to introduce yourself, what would you say?
Tucker Perkins 0:47
Well, I think the official start is I am the president and CEO of this propane Education and Research Council, which is based in Washington, I’d never consider myself a Washingtonian at all. I live in Virginia. And really, I’ve spent my life in the energy industry, around construction and innovations and venture capital work. I’m really seeing that primarily natural gas and propane are being used safely and wisely, and that we continue this innovation. So it’s a it’s a great it’s been a great career to be a part of the energy industry, and really labor specifically now around how propane is used.
Robert Bryce 1:25
And what is propane?
Tucker Perkins 1:27
Well, you know, so many people say, Well, I don’t know much about propane, other than my gas grill. 50 million homes have a gas grill. Maybe during this pandemic, people realize it’s a fuel that powers their patio heater, and really changed their lives. But it’s so much more than that ups runs propane powered vehicles. Most everyone knows about propane is heat or home, hot water cooking fireplaces. But we’re so much more than that.
Robert Bryce 1:58
Well, so and but but the molecule itself, I looked it up see three h eight. So natural gas is ch four. This is what I looked it up. It’s called a simple alkanes. So this is produced. It’s a natural gas liquid. That’s the other.
Tucker Perkins 2:11
And I think that’s what’s so important. Right? It you could argue that it’s a waste product. From refining natural gas, we used to say it’s either one of the lighter things and a crude oil or one of the heavier things in a gas well, but you know, with the shale revolution, really what it’s become is a primary resource. For America, we’re the largest producer of propane in the world by far. We’re also the largest consumer of propane in the world by far. But really I like to say propane becomes almost a portable natural gas. And but we don’t have natural gases, little problem about methane being so reactive as a greenhouse gas. So we’re an energy dense, we’re a little bit more powerful, if you will, the natural gas, we are in
Robert Bryce 2:58
terms of energy density. So then once you if you put it in a container, you’re going to get more energy, more more heat energy out of that right canister of propane than you would a canister of natural equal sized canister of natural gas.
Tucker Perkins 3:09
Exactly. And it’s easy to transport. That’s why
Robert Bryce 3:12
because the chemical structure,
Tucker Perkins 3:14
right, that’s why you see it in, you know, for your grill, it’s so easy to put it into a simple steel canister, store it use it. It’s really an amazing, versatile energy tool. And you know, for you people in Texas, we began to talk about now how easy it is for storage. I mean, as we think about electricity, and everybody talks about storage, thinking about batteries, it’s one of the benefits of propane, right, you can store however much you need, until your supplier refills you so in a lot of ways that has new relevance as we think about resilience and needing propane, when you didn’t quite think about how much you need it.
Robert Bryce 3:58
Well, I like that idea. Because that clearly has become a big focal point in the wake of the blackouts here in Texas and would be one thing if we just had blackouts in Texas, but we had a few months ago, we had blackouts in California. So this idea of resilience and reliability, really, I think should be a key to a lot of the energy discussions now. And one of the things that attracted me to the pitch that some of your advocates hit me with was this, that you have been talking about something called the 3d grid. And I really, and I’m going to steal this idea. I’m going to warn you because I like what what what you the idea of it, but explain what you mean by that. Because I think that we talk about when we talk about the grid, we generally only think about the electricity grid.
Tucker Perkins 4:41
Right? I mean, isn’t that as a as an engineer, a scientist, a person has been involved in all this for so long. It’s always strikes me as how most people tend to think about just energy coming from overhead power lines. And so we do talk about a three dimensional energy grid as I think It’s a great way to call attention to in fact, each of those three dimensions, yes, electricity is a part of our life will always be a part of our life, right? It’s what powers our TVs and our cell phones and everything else. And it’s delivered to us in generally power lines that are in the air overhead, an important part of life. And by the way, I don’t think powerlines are going to ever be anything but generally, overhead and in the air. What we don’t often think about because it’s out of sight, out of mind, is this vast network of natural gas or underground pipelines that were put in long ago when energy security was a real concern generated around military action in World War Two, we saw that development of pipelines, those pipelines are been bought and paid for they’re out of sight out of mind. And they bring this vital products, sometimes gasoline, sometimes diesel, certainly jet fuel to power, our aircraft, and then natural gas. And, you know, it’s always an amazing statistic to me if you think about it, but a user of natural gas can connect that vast pipeline, that’s generally in Texas, now we have the Marcellus so it’s all over the world. And when they turn on their stove, or their furnace that connects a pipeline from where gas was found all the way to where you’re using it. So there’s this vast network of underground pipelines. What people often fail to think about, though, is what I tend to call the vital center, you Texans, all of a sudden thought about the vital center, your overhead pipeline, overhead power lines weren’t really available. Your underground network of natural gas systems were very strained at the moment. And in fact, trying to provide gas to places that don’t normally need quite so much gas. It was that vital center, in my case, the propane fuel and the industry that delivers it, that became so relevant.
Robert Bryce 6:55
And if I can erupt there, because so that’s the that’s this, that’s the surface grid.
Tucker Perkins 7:00
So the grid, not overhead,
Robert Bryce 7:02
underground grid and the surface grid, and that suragrid, you’re talking about the physical tanks that are sitting on the ground that are storing propane, but they’re also physical tanks. That is I’ve thought about this, since we you know, before we started recording, there are a lot of gasoline oil that’s stored on the on the surface as well in big tanks.
Tucker Perkins 7:21
And that’s certainly a part of that vital metal as well. Again, the other thing that we don’t often talk about is natural gas is clearly a just in time delivery system, right? You’re, you’re beholden to the pipe, quite the same for overhead wires, right, they can only deliver a finite amount for a use at a certain time. And both of them are vulnerable to an interruption that is take away that overhead power did a construction incident take away the underground system that vital metal allows storage you can have some times if you have a grill, you just have four gallons stored at your house, if you have an industrial facility, you might have a million gallons of propane stored for your needs. So you you can choose your storage and then we’re able to refill and and resupply and in fact bring in resources to areas that you see in Texas, we can apply additional resources where the necessary need is so that wasn’t our first time in Texas certainly in your storms of you know various hurricanes, various floods you’ve had we’ve seen that response where the vital middle really is the difference between having energy or not, I mean, think about think about all these cooking teams that
Robert Bryce 8:35
it’s just a great it’s a great point. Yeah, I think that it’s one of the issues that is being lost in a lot of the discussions now around climate change but what I’ve been looking at briefly and just so I’m remind everybody I’m talking to Tucker Perkins, he’s the CEO of the propane Education Research Council. You can find him on propane calm and more about propane there but that resilience and reliability issue of having actual something that you can see and you can store on site because that’s one of the issues that’s really come to the fore in terms of generation in the state of Texas and the argument that well we need to have fuel on site at those generation plants and one of the things I saw in you know before we started recording on your on propane calm is propane fired generators, which I hadn’t really thought about before those are those becoming more popular. I didn’t even know how common how common are they?
Tucker Perkins 9:25
Well, let’s even talk about one thing for you in Texas. What is the one thing that you didn’t lose through winter storm URI that was your cell phone right? Generally cell towers work why because almost every cell tower is backed up by a generator and in most cases a propane generate really
Robert Bryce 9:46
diesel they’re not they’re not storing diesel and those generators is generally propane.
Tucker Perkins 9:50
Yeah, generally because propane has been such a clean fuel to us so easy to store. And so whether you use it or not, there’s no degradation. lots of reasons that people would prefer a propane generator over diesel or gasoline generator. So but one of the things you see and and many homeowners across the country, I mean, my neighborhood, particularly I probably see, I don’t know, 60 or 70% of the homes in my neighborhood are backed up with a propane powered generator. We live in a place where the power is not been that reliable. And so they’ve made the investment. So certainly propane generators for backup. But I know you love to talk about innovation is probably my favorite thing to talk about. We are moving to this world where decentralized power is not something we just talk about. It’s something we do. And one of the innovations that I’ve been involved with for the last five to 10 years is continuing to see that we have more and more robust engines to provide better power, pram power to places where it’s really needed.
Robert Bryce 10:57
So those engines would be reciprocating engines like a V eight or a V six or like you’d find in your car. That’s the engineer talk. Yes,
Tucker Perkins 11:04
you mean, so certainly internal combustion engines, but highly efficient, highly durable. That’s kind of the new modern things, and also from an environmental perspective, because we don’t do anything anymore without an eye towards How does this impact the climate and your health. These engines are also very clean.
Robert Bryce 11:23
And so these would be the ones and found inside a generac unit or one of the other brand name generators to absolutely
Tucker Perkins 11:28
generac a great partner of ours. Kohler is a great partner Briggs and Stratton Yes, exactly. Those type engines.
Robert Bryce 11:37
So how big you know, I’m from Oklahoma. I grew up in Tulsa. I knew about the natural gas liquids business growing up of course, butane propane, ethane xylene. There
Tucker Perkins 11:49
you got it. You’re good for you with your organic chemistry change.
Robert Bryce 11:53
Yeah, I mean, but I’m not gonna brag on my chemistry. Especially my father in law’s a PhD chemist at the University of Michigan or has an emeritus there but tell me about it. One of the things that I think about propane as well is that it’s it’s not something you see except in in urban areas. You see it in grills and, and patio heaters, but I think if it was more of a fuel for rural America was who absolutely homes in America have propane
Tucker Perkins 12:19
tanks? Well, I think it’s always a myth. As I said 50 million homes have a gas grill. Over 5 million homes have propane in them for their primary heat cooking a million farms have propane on the farm to use it so
Robert Bryce 12:38
clearly it is using it there for water heating space space heating and cooking are the main
Tucker Perkins 12:43
well in a font and a farm they’re using it for certainly to take care of their their own needs for cooking hot water heating, but on the farm itself. All of the animals perhaps need the heat, grain drying dairies are huge consumers of propane for hot water needs all of the grain drying and then we’re beginning to see now a lot of use of propane to power the agricultural equipment. Again, you know, we’re kind of moving in this world where diesel and gasoline are beginning to have truly competitive alternatives. And propane is probably the next step. Easy to transport easy to store burn so much cleaner. I mean, it’s it’s amazing to me, but if you compare a diesel engine to a propane engine, a lot of our engines will be 96%. cleaner in NOx emissions. At NOx emissions, we don’t ever talk about it as a society, right? We talk about greenhouse gases and co2 and we talk about climate. I’m equally concerned with climate and health and it’s NOx emissions and particulate matter that really matter to our health or children’s health plan health.
Robert Bryce 13:52
And so those are criteria pollutants under EPA rules. And we’ve had, well, frankly, over the last few decades, great success in reducing NOx from from particularly from automobiles, but you’re saying that propane in automobiles. forklifts are another common application, aren’t they?
Tucker Perkins 14:08
One of the reasons that they are common applications. There’s so much cheaper, more powerful, more durable, and then cleaner. That’s really how we got to these. I mean, I don’t know your listeners probably don’t realize it but this morning 22,000 school buses taking children to school. We took 1.2 million children to school this morning and propane powered school bus. Why is because there’s so much cleaner, healthier, quieter, and then cheaper to operate. So you know, there’s a as you as you correctly say, I think most people don’t have any realization what propane is doing beyond their grill. And yet here we are really the center of energy beyond the natural gas me whether it’s a farm, a home, an industrial business, or certainly the five minute And homes that we have today beyond the means.
Robert Bryce 15:03
So about how big is the is the market I know that the US has now because of the shale revolution is exporting a lot of propane. How big is the domestic in terms of dollars? Do you know this number? how big the propane domestic? Yeah,
Tucker Perkins 15:14
well, I used to think of it in terms of gallons kind of put it in perspective. The US industry consumes about 10 billion gallons a year. We also export about 12 or 14 billion gallons a year. So interestingly, we export more than we consume. domestically. We aren’t we are the Saudi Arabia of propane. We have we have the world’s largest supply in Texas, you have the world’s largest export facility there in mountain Bellevue. And so is this vital resource and we we really label labor to see that it’s used in the US safely, will also begin to change the dialogue around how propane and natural gas can be used for the environmental good, right. One of the things that again, the common logic out there is that there’s there’s a narrow path to decarbonisation, right, the path to electric decarbonisation is electrification. And that couldn’t really be further from the truth. You’ve learned it the hard way around resilience, right? If I had one path, and you take that path away, I’m cold, I can’t cook, I can’t eat. I don’t have a hot shower. But it’s even a little sadder in today. propane is cleaner than electricity, right now in 3738 of the 50 states, right and
Robert Bryce 16:40
a grid, do you mean that it’s cleaner? What do you mean by well,
Tucker Perkins 16:42
and I’m talking about specifically to greenhouse gases and co2. And that’s that statement. I’m glad to see that it shocks you. Because it’s the grid today, people just make this distinction that this path to decarbonisation is to electrification, they don’t ever talk about what the grid looks like today, right? I’ve traveled to places where the grid is 70 75% today from coal. So it’s
Robert Bryce 17:12
gonna be states like Wyoming, West Virginia, Kentucky, some states where that is where the electricity
Tucker Perkins 17:17
is kind of just hit the three big and it still shocks me right? In most in all three of those states, their use of coal is 70% or more is that grid cleaner is electrifying. And those states going to improve the environment now. So today, so
Robert Bryce 17:33
when you say the 37 or 38 states, you’re talking, you’re looking at the electricity mix and the and the fuels that are creating that electricity, and you’re comparing that to burning the propane directly in the home versus converting it into electricity. Is that right? Exactly? Okay, good. So one of the things we do i can i because I want to jump back to this idea of the scale of the market, because I don’t know these numbers, yeah.
Tucker Perkins 17:56
Well, I’ll give you let me give you a direct answer. So it’s about the same in the US as it is in the world. So we’re about 4% of the US energy portfolio. Right? So if you just take all of the BTS consumed in this country, we’re about 4% of the US. And worldwide, propane or LPG is it may be known worldwide, even though it has vastly different uses, right? In Africa, we’re really replacing the use of wood and dung as a cooking fuel and saving hundreds of 1000s of lives from indoor air pollution. But But worldwide, we’re about 4% of the energy mix. Here’s this statistic goes is more important to me, we touch about 60% of the population, right? So even though we’re relatively
Robert Bryce 18:46
propane in the US is ultimately used by 60% of Americans.
Tucker Perkins 18:50
That’s true. Yeah. And the internet’s an
Robert Bryce 18:52
amazing grill or in their patio heater, or in their water heater in their home if they’re living in a rural area or something like Yes,
Tucker Perkins 18:59
so we have never, and I think it really plays to our advantage as we think about the future of energy. And that we’ve always been this niche player, right? We’re not behemoth utilities with monopoly, you know, service, territory, territory, we have been independent businesses that had to vie for our own business. So we’re used to working with other fuels, other companies, and we’re used to being a player. And I think that’s playing to our advantage, as Yes, we’re embracing working with solar in working with wind, I’m changing our own fuel. But I think we’re on the now the beginning where this portable, versatile fuel that’s also very clean for the climate, good for our health. And then we haven’t gotten to the other important part, you get you’re able to afford it. Alright, so now we mix all of that together. And we’re really seeing a real renaissance of the use of propane in a lot of new applications.
Robert Bryce 19:57
And give me give me an example of that.
Tucker Perkins 19:59
Well, I’ll just Talking about one school buses. This one, right here, we’re firing What do you want that?
Robert Bryce 20:03
I guess standby generators would be one,
Tucker Perkins 20:05
vehicle transportation, standby generators, but quickly moving to prom power generators, right, which I travel now and see hospitals nursing homes beyond the grid prisons that previously would not have thought about using propane. But because they need to have massive amounts of hot water, cooking clothes drying heat, they’re choosing propane
Robert Bryce 20:31
while they’re close to the gas grid, and that’s not that’s not
Tucker Perkins 20:34
right, natural gas wasn’t available Doom, you know, electricity is is an inferior choice, either for cost or for the amount they need. I mean, the truth is propane does a few jobs really well. We heat water really well. We provide all those outdoor appliances like grills and patio heaters and torches, we do that really well. Right? We heat your house when it’s cold really well. And and in every one of those instances, I think we do it better than even electricity.
Robert Bryce 21:06
Well, I want to follow on that affordability. Because I published a piece just a few days ago, in fact, on on this issue, because the Department of Energy published data on comparing different residential fuels on a per mmbtu basis. And one of them is propane, natural gas, electricity, number two heating oil and kerosene. and natural gas was a quarter of the cost of electricity and propane on a per bpu basis. And propane was half the cost. So that speaks to your affordability issue. Right.
Tucker Perkins 21:34
Exactly. And I think one of the things again, that strikes me as a kind of speak on this issue around the country and to a degree speak on it around the world is everyone wants to talk about equity and justice and affordability. And I never really know what that means that every one because to me, it means one, there’s a vast amount of investment that has to be made. Sometimes it’s a federal investment, sometimes it’s private investment. And then a consumer has to be able to pay for the choices that they’re giving one of the beauties of propane, you’ve already said it, it’s generally regarded as this fuel of rural America, the the fuel that’s, you know, not in the cities. So maybe per capita income is is reduced, we have been the fuel of rural America, we’re also a fuel that’s affordable. So when the conversation gets around to equity and justice, I think we’re the fuel that probably rises to the top, as you correctly said, Energy Information Administration kind of proved that out. And that that data, they just showed that it’s cheaper than electricity. But I would say it’s even a little bit more than that. If you look forward and skate forward a decade or two decades, it’s going to continue to be cheaper. And the last piece of that i’m not i’m not political don’t ever intend to be. But we’re talking now about the investment needed to make the grid smarter to be able to mix intermittent fuels, like wind and solar with baseload power, like natural gas, or coal or nuclear and the investment to do that. I mean, I see numbers all over the map. But my personal belief is that investment is something well, north of $10 trillion. For sure. Who makes that $10 trillion investment? Is that part government part industry? Who pays for that? What whoever makes the investment right, rates gonna pay for that 10
Robert Bryce 23:28
trillion would be for for to decarbonize the US economy, is that what you’re talking about? Overall, I
Tucker Perkins 23:33
think it really is to get the grid to the spot where that grid could actually be this cleaner, resilient and smart grid that he was able to make. I see baseload power with intermittent power. I mean, that’s a massive step that no one ever really fully bakes. And as a person who really not only is involved in this, but I’m involved in with my pocketbook, right? We make investments in these technologies that we want to see they have a shelf life of 10 2030 years. So we’re thinking a lot about what does the grid look like? What What does our energy delivery system look like two decades, three decades for decades from now. And the investment needed is massive. And that all figures back to this conversation about equity and justice, right? Why? Why I mean, it’s today it’s the current conversation, right? Well, who who can afford a Tesla? Well, the only only the tend to be the coastal elites, the word I don’t use very much. Those people who are best able to afford a Tesla, as we think about this grid evolving, we still have to think about who can pay for the energy they need to use. And I think propane has a vital role in that as we really kind of maintain, if you will, a very low cost product.
Robert Bryce 24:58
So you’ve given me the numbers on you. You said 10 billion gallons a year in the US consumption of propane is 10 billion gallons a year. Yeah,
Tucker Perkins 25:05
their retail consumption. So farms, homes, businesses that has nothing to do with chemical demand or petrochemicals or any of that. And then we export about 15 billion gallons, okay,
Robert Bryce 25:16
as well. So, but in terms of the overall value of the propane industry in the US how many billions of dollars with this beat?
Tucker Perkins 25:23
I think you could say in round numbers, it’s about a $20 billion industry right now for just that, what I would call retail propane.
Robert Bryce 25:33
I see. Okay, so and the chemical part of this is a whole other discussion in terms of how that how LPG broadly, or, and propane specifically is used in, in chemical production. So I’m assuming it’s used in for you splitting into urethane other kinds of chemicals. What is what is well, propane.
Tucker Perkins 25:54
propane can be one of the first chemicals for plastics and that whole polyethylene chain. So there’s a there’s a huge chemical use for propane. But propane is just one of those things that can be used, right? Sometimes it’s about ethane, ethylene, propane, propylene, their whole so we go into the chemical world. And really one of the things that always helps us is it’s that chemical usage that balances out this big production network, which, you know, part of it goes to us as homeowners and farms and businesses, part of it goes to our own commercial chemical demand, and then part of its export. And then it’s a it’s a neat system. And again, because propane is so easily stored, stored in caverns underground and Mont belvieu, Texas, stored in tanks stored in ships stored at Dow Chemical facilities around the world, that you know, storage can can also be easily done. And so there’s this vast network and
Robert Bryce 26:58
it’s a stable molecule. So it doesn’t, it doesn’t degrade then over time. You know, gasoline and diesel fuel. That’s always a concern. If you store it too long, it’s gonna degrade but you’re saying propane. That’s one
Tucker Perkins 27:08
of the reasons we talk a lot about it and standby generators, in that you can put a tank at your house, not use it for a decade, not using for three decades. And when you want to use it. It’s there. I mean, I run a gasoline powered lawnmower. I run a gas. I mean, excuse me, a propane weed eater and a propane lawnmower. And I do it because I never have to have any concerns at all about that fuel gumming up actually run a propane outboard motor, and I might turn it on two times a year. But when I turn it on, it fires up immediately. And that’s you don’t it’s always about ethanol.
Robert Bryce 27:46
The ethanol eating the seals in the gasoline from the gasoline.
Tucker Perkins 27:49
That’s no no concerns whatsoever.
Robert Bryce 27:51
I haven’t heard of propane propane outboard motors. I haven’t heard of a propane weed eater either.
Tucker Perkins 27:56
Well, and you wouldn’t, I mean, those are niche II products. But again, 25,000 commercial mowers are out in the world today cutting grass, using propane. And by the way, one of the things is we always go to hell. One of the things that always strikes me is we’re in golf courses, and we’re cutting grass. When I visit with those people, they always say, well, this fuel is cheaper. It’s more powerful. And it’s quieter. That’s a universal but the other thing they tell me is you know, when I got on this propane lawn more I could have headaches or my sinuses behaved better. I mean, there’s this we and we saw it right with the pandemic. We saw when we stopped driving the skies cleared. And you know, the sunshine was a little bit brighter, perhaps. And that’s really that Smaug impact that you see in cities and using propane for even vehicles, or for mobile applications like knowing and forklifts. That’s why we use it. It’s not only more powerful and easy to store, it’s healthier for the operator.
Robert Bryce 28:57
Sure. So I have to tell you, I you know, I’ve been doing this. My colleague, Tyson Culver is producing the podcast and we’ve been doing this now we’re gonna be on a year I guess in June, I believe you’re the first association president that we’ve had or Association CEO that we’ve had on and it’s interesting to me that we’re talking about propane because you know, I and but you’re a very convincing event evangelist for propane. But let me ask you about you said it’s a we use about 10 billion gallons in the retail sector and he said it’s about a $10 billion business so $1 a gallon. But when I buy propane or when you know I as I understand you bet you pay for it by the pound. Why is that you? Well so give me but it’s sold by the pound which isn’t
Tucker Perkins 29:47
fair. I said we’re about a 10 billion gallon industry and we’re about a $20 billion industry. So I said about $2 but you are correct when you buy it in 20 pounds, cylinder You’re generally buying it by the pound. So if you’re buying it for your grill, you’re buying it by the pound. But why is that? Well, the reason is really small. I mean, a lot of people buy in one pound increments for their camping use or whatever. Right? So, so there, it’s always so the answer is we can sell it to you in as a smaller denomination, or frankly as in larger denomination as you need. Right? We used to run an export business and there we would sell it in 10 million gallon quantities. So but but yeah, I mean, look, there’s a huge business nationwide for in one pound cylinders to use in camping and to use in torches look, one of the one of the things you asked about the size of us, there were a couple days in Texas where I think the propane industry was a bigger industry than the electric or the natural gas industry. Right? When neither one of those fuels are really available and kicking the propane industry. I think for those couple days, were a larger industry in terms of volume and BTS being consumed than either natural gas or electricity. I don’t know that that had ever happened in the country before. But yes, we’re I mean, I think that speaks to this versatility, where we are happy to sell it to you in one pound cylinders for your your torch, and we’re happy to sell it to you in multi million gallon capacities for your nationwide fleet.
Robert Bryce 31:31
So let me ask you about the structure of the business because I know that there are propane cooperatives, right. You know, the their grain cooperatives are electric cooperatives. I understand their propane co ops as well. Is that right?
Tucker Perkins 31:42
That’s right. I mean, so in real numbers, there are 3000 independent dealers of propane around the country. Certainly Texas is one that has a vast network of independent so there aren’t utilities are not monopolies. They’re independent businesses that have earned their customers right to be a partner with their customer, either by service or, you know, if sometimes a specialization, right, some specialize in just serving farms, some specialize in just serving fleets. Some specialize just in serving schools for their school bus. So about 3000 independent businesses across this country that serve small amounts are vast amounts from one town to employees to you know, 50 state multi continent, propane providers, we range,
Robert Bryce 32:36
we run the game, who’s the biggest player in the propane business and the retail propane business
Tucker Perkins 32:41
in the United States, it’s America. And America actually is quite huge in Europe as well. I mean, a multinational player, we have a couple other lot of people might recognize that blue Rhino brand that you know from where they use 20 pound cylinders that’s owned by a company called Ferro gas, again, number two market share. But it’s really interesting one, two, and three, the number one, two, and three companies have about 40% market share the next 60 or 70 have another 25 or 30%. So you can see we have several very large companies. And we have a lot of really small companies. The one thing that’s unique to us, I think, is unlike your natural gas utility or unlike your electric utility, we’re generally in your town, right? We might go to church or school or play on the same baseball team as your kids. You know, we’re generally in your town, and it’s generally regarded as kind of that small town local player that provides you your energy needs.
Robert Bryce 33:45
Sure. So is his consumption rising? Is it falling? I don’t know any of these numbers in terms of what I know, electricity demand in the US has been flat for 15 years. oil demand and a lot of people think it’s peaked is propane consumption rising, falling? what’s what’s happening with
Tucker Perkins 33:59
overload? Fortunately, it’s it’s not certainly it’s certainly not falling. It’s been flat to rising two to 3%. Almost statistically not significant. It’s been pretty flat. But what we’re seeing over the last couple years, is we’re now seeing kind of a that next wave of innovation. That’s really one of the things that I lead, is we really are concerned about three things, right? safety and training. Is our industry prepared to deliver the product safely, our customers prepared to use the fuel safely. And we really have a huge effort in that. We do a little bit of work around marketing, but I think really their real investment for me has been an innovation and we don’t ever stop these new generators that we talk about ships that are using propane today, school buses, lawn mowers, this next generation of equipment so we’re growing and I think what I’m beginning to See now is that the concerns around climate and health and cost and resilience. And by the way, energy security. That’s the other part here, we’re talking about a US fuel, right, we’re talking about a fuel that we really control huge amounts. Those are kind of combining now to time to really give us a resurgence of demand. And just through the pandemic, we’ve seen a big pickup in use of propane. I mean, we talked about the small uses like patio heaters and outdoor living and that kind of thing. But now with your winter storm Yuri, in that focus on resilience, all of a sudden people are really paying attention to is there, are there multiple fuels that I can use, certainly, I need electricity, certainly, but I need something beyond electricity to help me. So I have a resilient home, and that we’re seeing all of that come together, even with this view towards climate and health, to grow our industry.
Robert Bryce 36:00
It’s interesting, you say that about the reliability issue, because I was on a call this is some time ago. And I mentioned the issue of affordability. And the response that I got was, well, if you don’t have reliable electricity, your affordability goes down that goes down the drain is that they go hand in hand that reliability and affordability are two sides of the same coin so that if you don’t have reliable electricity, you don’t have a lot you’re going to spend more that is get a generator or even locally here in Austin, I’ve heard you know guys saying Well, now since the blackouts, we’ve had a huge increase in people wanting both solar and batteries. Because they then there’s that’s going to give them their resilience. But it’s it’s a tacit recognition that there is the reliability falls, the affordability problem gets worse and people are going to invest whatever it is that they have to I mean, if they have the money, right to make sure that they have reliability. So that would include a generator, a propane generator, natural gas generator, new solar and battery, something else to counteract this in apparent decline, and in some cases, obvious decline in the reliability of the electric grid, which takes me back to your idea of this, this 3d grid. So it just interesting. I’m riffing on this now, but it’s
Tucker Perkins 37:13
well, and you didn’t even mention one thing as I think about again, as I said, I really think about all forms of energy. And yes, I worked for the propane Council. But also I just tend to labor into this issue of energy and investment in the future. It’s kind of what I do right now, I work for the natural gas and propane industry, because I believe in it. But to be honest, if I didn’t believe in it, I’d go somewhere else. And what what I see that no one talks about, again, is how does how does renewable energy really continue to improve? How does that impact cost? How does that impact reliability? And you mentioned the litany of things and you didn’t even talk about cybersecurity, cyber threat. I feel like really, when when the cost of cybersecurity and vulnerability is really begun to be baked in to the grid. There’s only one way costs can go right. You know, we got to make the grid smarter costs go up, we’ve got to make the grid able to receive renewable energy costs are going to go up, we need to make the grid more or less vulnerable to cyber threat cyber security costs are going to go up mean, there’s only one way electrical costs can go I think and that’s higher. And again,
Robert Bryce 38:31
let me interrupt you because I think that I certainly agree I we see that trend, particularly in California, and I think we’re gonna see it now in Texas, as the these measures are passed to require resilience and reliability. But you talked earlier about this electrify everything push. And I wrote a piece during the blackout when we were blacked out. And I posted it on Forbes saying pointing out the perils of this move or this push. But the point that I’m getting to is that the the ardent climate activists are saying, well, we need to quit burning things. They’re saying we need to give up combustion. And that that is the we should essentially have a solid state society, which I’ve not seen that somewhere else, but that we will give up combustion. realistic.
Tucker Perkins 39:15
No, it’s not. And again, I think we all wish for that same utopia, right? We all wish for a cleaner climate a healthier, I wish for a lot of things. But I think that is the core issue to me, where this common theme is so erroneous, right? But that fossil fuels are evil, and therefore we must eliminate them to get to a cleaner climate.
Robert Bryce 39:41
The thing that strikes me is that’s what we’ve heard over and over from that is the narrative rise profile climate activists in America.
Tucker Perkins 39:47
And here I’m telling you something that I don’t understand why a lot of people aren’t saying by using natural gas and propane. The more you use today, the faster you get to do carbonization the faster the climate gets cleaner, and you look, you’re talking about some of the data. I’ve just spent the last month studying the International Energy Agency data, right? And the thing that strikes me all of the promises of the Paris accord and every other record before about how we’re going to reduce greenhouse gases, it’s not materialized. Right. And so I don’t know when people are going to say that, hey, is there another way to do it? Right, I think, look, we both see it. Human Nature is a big part of this equation. And I think the one thing that I think a lot of the climate hawks talk about until we take away your ability to have things like natural gas or propane, you’re going to continue to use it. Yes, I think we are right. It’s because it’s cheaper. It’s because it’s available. It does things that we like, and this conversation has become, I want to stay in the conversation about clean climate, right. I’m not the least bit. But the the statement that I’ll make that is completely counterintuitive to so many people, the more natural gas and propane I can use today, the faster I get to decarbonisation,
Robert Bryce 41:14
and why and why is that you’ve made that statement a couple times. Why would show me why
Tucker Perkins 41:20
the grid today? Isn’t that clean? In any of the states?
Robert Bryce 41:25
And I think because the me so you’re talking specifically about substitution for coal?
Tucker Perkins 41:30
Correct? Oh, no, no, no, no, no substitution for electricity. It’s not just about copious amounts of coal use. It’s about copious amounts of oil used, when we need more kilowatts than our current gender. I mean, have you gone back and seen just how much bunker fuel was burn in this last coal round, because when you till utilities don’t have the watts available to them from the clean sources, so they just go down the list. And coal is but one of those things that used it’s also about oil, and it’s about a lot of things so that are
Robert Bryce 42:08
used in standby generators. So diesel fuel are number two fuel oil being used in reciprocating engines that are attached to generators and,
Tucker Perkins 42:15
and they don’t use it much, you know, during the nice routine runs. But in those summer peaks and those winter peaks, they use in copious amounts of oil to balance the grid. Right? And I think so. But I’m looking at I look at the grid regularly, by state by region and nationally. And the thing that strikes me is that today, propane and natural gas are cleaner than the grid is today.
Robert Bryce 42:44
So so if I just to interrupt so your argument is that this idea of using using these using ch four and C three h eight,
Unknown Speaker 42:54
Robert Bryce 42:54
directly, is a far cleaner use than converting that those fuels into electricity and using them indirectly. Is that a fair amp? So
Tucker Perkins 43:02
here’s it, here’s the analogy I make quite often, I took a shower this morning using a propane water heater. My propane water heater is as good as it gets. It’s 97% efficient. You took a shower this morning using an electric water heater? Who was better for the environment? Most people would say, Well, I use electricity, I’m pretty sure I was. If you think about the full inputs, and I’m not being you know, I’m not going so loud. And think about just how electricity is made, transported and use versus propane, or natural gas. In almost every case, it’s the same number. The answer to the question is I was a better steward of the environment. Even if the metric is just climate, I produced fewer emissions this morning with my shower than that person who used an electric water heater why I use in a very efficient device, I used it directly. And I consumed most of that energy into making my water hot, not into the air.
Robert Bryce 44:05
And so the conversion, your specific point is about that conversion process. And I’m in Austin and some of the power here comes from nuclear some comes from coal, some comes from natural gas. And, and some comes from wind and solar and the rest of it. But but that if now if I’m completely reliant on nuclear, then your your argument doesn’t stand right. It wouldn’t work right. Or if I absolutely solar or wind then then your point wouldn’t necessarily carry here. But you’re saying that by using the the hydrocarbons directly at the point of use, that’s a smaller climb. That’s a smaller carbon footprint.
Tucker Perkins 44:39
Absolutely. And in fact, there are some states that have high uses of hydroelectric power, right, right. Washington State of Oregon, two examples. And so there we’re talking about I want to work harmoniously with electricity I want to do the few things we do. Well, I still want to heat your water. I still want to heat your home when it’s cold. But that’s a Place where a heat pump makes perfect sense, right? And so that’s why I say going back to this thing that we’re not about one fuel one fuel never does all things well. And you know, you go, you can look across the world at that statement is true. We need to really think about how to use fuels to do the things that they do. Well, certainly, I’m going to use electricity to power my television. I don’t think there’s any question about it. But I’m also going to use propane to heat my water to cook my food. And if I go out tonight, for my outdoor living with my family, and we have we want to sit around a fire pit. It’s not going to be wood, it’s not going to be electricity, it’s going to be propane.
Robert Bryce 45:41
Let me ask about that. Because that was one point that was made to me, in fact, by Meredith angwin, who I’ve had on the podcast a couple times, she and I were talking about this issue of combustion, and she said, you know, heat pumps it, you know, she said, I get the efficiency argument. But she said, there is an important element of combustion, which is the radiant heat, and that that is a very satisfying form of heat for us that we like cozying up to the fire, we like cozying up to see into the hot oven, you know, that that radiant heat is really something that matters in terms of our overall comfort, as animals, right, that, that that’s something we really respond to that that was a good point, and one that I hadn’t even thought about before. But once she said it, I thought Yeah, right.
Tucker Perkins 46:21
So fortunately for me, I get this broad field of view. I also have great scientists that work with me, that either tell me that what I’m saying is true. Or they you know, we because again, we’re about a cleaner climate, I don’t, I don’t want anybody to think that I’m just trying to clean that article in The Guardian once talked about fossil fuel, people just clinging to their past could not be further from the truth that offended me, then it offends me. Now I am as good for the climate. I’m as interested in a healthy society as anybody on this planet. Heat pumps, often people say, Well, you know, heat pumps, you need you that that’s a great device to heat your home for the environment. It works lovely, in most places, right? Particularly in the southeast, it’s a great, we don’t get cold nights, the coefficient of performance of a heat pump is yes, 202.5 250% until it gets cold. And then when it gets cold, that coefficient of performance falls off to where I mean, it’s essentially a toaster oven, do you want to heat your home with a toaster oven. So you’re talking about comfort, and I’m I actually have a heat pump with a gas backup. It’s the great way to do it. My wife and I tend to be very cold in our home, when it’s 55 or 60 degrees, when it gets to be 30 degrees, and my gas backup comes on. We’re just as comfortable as we could be in our home. So yeah, and we’ve known that for years. So now you just crossed two things, right? What’s good for me, because of my personal comfort, what’s an appliance that’s good for me and my community in terms of the climate? And then what can I afford. And I think heat pump is a good example, when I talked to builders through the southeast, unless they’re in the mountains of the Appalachian Mountains, or in some cold parts, I say certainly a heat pump gas backup, that’s good for you, that’s good for the environment, to for the government to suggest that a heat pump is the right device to have in Maine, or Minnesota or Wisconsin. It’s it’s foolish talk right now, and I don’t even know why they would do it homeowner would never be comfortable. The environment is not beneficial. Once again, you’re relying on one energy source a wire come into your home. That’s not this this broader path, this three dimensional grid comes right back to play. Right.
Robert Bryce 48:50
And I think that that’s an important point, because that’s one of the effects of the city of Denver now is pushing an all electrified, building code and you know, it gets cold in Denver. But yeah, I mean, heat pumps, it’s clear. And there have been numerous numerous studies have found this that when it when it gets below freezing, and really even, you know, near zero, the heat pump efficiency goes down the drain, and that you’ll hear
Unknown Speaker 49:12
Tucker Perkins 49:15
again, we get to this point, we’ve been a niche fuel, we’re not trying to do all things to all people, we want to do the four or five things we do really well. Right? We want to leave to electricity, those four or five things that it does really well. And by the way, I you and I haven’t even talked about where does electricity go in the next decade or two? And because so often people go You’re right, Tucker, that the grid today isn’t the grid that I believe will be the grid of the future? And I’ll say, I completely agree, right? I have my own podcast, I interview people around the world. I’m active in this topic worldwide. And, you know, I see where the grid has evolved in Germany and these other things. What people completely failed to acknowledge though, is where do these clean other fuels Go, right? We’re gonna bring an engine out here soon into the public that its greenhouse gas output is 25% less than the next best technology today.
Robert Bryce 50:13
What’s is there?
Tucker Perkins 50:16
I’m not gonna it’s a name. Everyone knows it’s an engine that’s quite public. But as diesel has become more and more under attack, and perhaps for the right reasons, in terms of its cleanliness, manufacturers have had to think about other fuels and we talk about batteries, we talk about hydrogen, you’ll begin to see propane figure right in into that conversation. Because it’s energy dense, it’s clean. But But again, the point is, people don’t even think about the innovation that we’re seeing on our side, for engines for power generation,
Unknown Speaker 50:53
just talked about.
Robert Bryce 50:54
So it’s a different type of reciprocating engine, like what what a standard reciprocating engine with some other special sauce on it,
Tucker Perkins 51:01
no, what is a what is interesting, and as a person who’s been in this space, again, for two decades, it’s the marriage of three things. And none of it is so sexy, or secret. But all of a sudden, we’re marrying modern engineering, with modern manufacturing. And this seeing how design could be improved and improved and improved. And we’re doing things that have never before been done
Robert Bryce 51:28
it and we’re gonna see that you’re so this is something that that the the propane Council is going to be announcing or as an independent manufacturer,
Tucker Perkins 51:36
well, both, but in by the way, you won’t see it from just one manufacturer and one product. We already talked about ship for powering ships worldwide today. And I was involved in that a decade ago, I said it wouldn’t have many of those manufacturers say all of the ships we make for the next five, six years will be propane fuel. Interesting. If I talk about school buses, I’m talking about backup power, you see me keep talking about prime power, you know, the power from the Virgin Islands produced by propane, the power for most of the Caribbean islands are being produced today. By propane, you there’s a steady realize
Robert Bryce 52:16
that I thought they were running on diesel fuel or, or, or fuel oil.
Tucker Perkins 52:20
They used to write but they needed this behind cheaper, cleaner, more reliable ways to do it. And really, when you get to it, there are only two ways to do it reliably. Right? either use natural gas or use propane. And so it’s a great evolution.
Robert Bryce 52:37
Sure. So Tucker, Mike, my guest, by the way. For all of you listening is Tucker Perkins. He’s the CEO of the propane Education and Research Council. He’s the first Association person we’ve had on the podcast. You can find more about him on propane.com. So Tucker, we’re about an hour in here. I’m going to just ask you a couple last things. So what are you reading? I’d like to ask people what’s on their bookshelf? What are they? What books are you reading these days?
Tucker Perkins 53:03
Well, it’s funny the book that I look up right now, I mean, I read a lot of things that I love reading about innovation and design. But right now, I’m just getting through the new map, which was Daniel Yergin, his book about how energy is being used as kind of what’s on my bookshelf right this minute.
Robert Bryce 53:19
Yeah, I had him on the podcast last year. So yeah, I’m the section he had on the nine dash map, I thought was really one of the best parts of the book really interesting. Look at the South China Sea and the controversy around there. So last thing, Tucker, what gives you hope?
Tucker Perkins 53:36
Well, I think what does give me hope. And so again, I approach this, I guess from the start as a engineer, what gives me hope is that we are going to a real change, we’re really going to see a real change in how we use energy, how we make energy, how we consume energy, right? I love to talk about conservation. Nobody ever talks about conservation. But you know, can we be more efficient in how we use it? Could we plan our trips better? I mean, I think all of these things the pandemic has shown is one thing. staying at home may not always be a bad thing. Driving a few miles last might not always be a bad thing. And if we do it right, the skies clear our neighborhoods quieter, we get to spend a little bit more time with their family. I think what does give me hope, though, is to see how now marrying engineering with production and manufacturing gives us opportunities to really innovate in ways that we never could before See, and that will get to this world where we have a three dimensional energy grid right? We’ll acknowledge the role of renewables for sun and wind particularly, we’ll even see new entrants, better batteries, use of hydrogen perhaps, but we won’t ignore this vast network we have of underground pipes thought paid for out of sight, out of mind and will bring you know the Issues of energy security, resilience, cost justice, and we’ll marry that to clean climate and health. That gives me great hope that we’re moving in the right direction.
Robert Bryce 55:13
Well, that’s a good summary of what we’ve been talking about. So I’ll end it there. Thanks Tucker Perkins for the time. If you want to learn more about the propane Education and Research Council go to propane calm Tucker. Thanks a million for being on the power hungry podcast.
Unknown Speaker 55:27
Tucker Perkins 55:28
this low power hungry. Thanks for the time.
Robert Bryce 55:31
Okay, thanks to all you listening. Tune in next time for the next episode of the power hungry podcast. See you then.