•ICM: Thank your for your time today, first let me ask you who is PERC and what is its mission?
•Perkins: PERC stands for the Propane Education & Research Council and it’s mission is to support the users of propane and make sure that the fuel is used safely; to develop the most modern technologies; and to make sure that our industry and the marketers that service, install and respond to customers are well-trained.
As the U.S. grapples with the issues of climate, health and justice, we are trying to make sure that our propane offerings are not only environmentally and technically sound, but still provide comfort and heat while meeting the climate and health needs of today.
•ICM: Most of the Northeastern States and the federal government have aggressive goals to reduce carbon output, some by as much as 40% by 2030 and possibly 80% by 2050. A key element of this is eliminating combustion in buildings by converting homes to electric-powered heat pumps. Is this a threat to propane?
•Perkins: We don’t want to view it as a threat to propane. Clearly, if they were to eliminate fossil fuels, natural gas and propane would be included. For some reason, we have allowed this to become a war of “Electrification vs. Fossil Fuels” when, in fact, it’s a war on carbon and unfavorable climate change. We are prepared to enter the conversation about reducing carbon using clean, low-carbon fuels such as propane and natural gas. We live in a world where 3-second sound bites are how we understand information, rather than talking about complex issues. I don’t worry about the threat to propane nearly as much as I worry about that. This conversation is moving us to a place where consumers may not be warm, may not have hot water or may not have the choice of how they want to cook.
The propane industry is completely aligned with a war on carbon, but the methods—such as replacing combustion with electric heat pumps—make me insane. That’s not the battle or the conversation we should be having; it should be Can propane/gas furnaces still lead to increased climate benefit and health? The answer is, Surely, they can.
•ICM: Most descriptions of propane and natural gas fall under the “fossil fuel” category, which is considered a higher carbon fuel. Can you expound on how propane is a low-carbon fuel?
•Perkins: Let me start by giving you a visualization. Today, a propane vehicle operating in 38 States would be cleaner than an electric vehicle. There’s this view that electricity is clean energy and propane or natural gas, or any other carbon fuel, is not. In fact, propane offers the most efficient, modern water heating possible. In most States, heating water with propane is more efficient and beneficial to the environment than heating water with electricity. In the Northeast, vast quantities of fossil fuels are used to generate electricity, so how is the environment better off by making electricity from coal, oil and wood? The average citizen has been completely misled or has missed those points.
•ICM: Taking the side of the public policy makers here in the Northeast, their plan for beneficial electrification, or decarbonization, is focused on electricity generated by renewable resources. Any response to that?
•Perkins: Absolutely. I salute the fact that the electric grid of tomorrow will be cleaner than the electric grid of today. If we are going to make any improvements in climate and health, it will have to be. I don’t for one moment pretend to believe that the massive steps toward a decarbonized grid—80% solar and wind—is going to happen. If you look across the world that’s not happened, and where it’s happened, there have been tragic consequences, mainly around reliability and cost.
However, clearly the U.S. electric grid is going to improve—we’re going to get rid of coal, replace natural gas, use more renewable sources. The grid is going to shift because of technical innovation, batteries, solar panels, thermal efficiencies, etc. However, for some reason, people don’t realize that low-carbon fuels, such as propane and natural gas, are making those same technical innovations, and I might argue at the same pace or even better.
•ICM: Your position is that propane, which is generally lumped in with fossil fuels and does have carbon emissions, is still a better choice than electrification. This is because the generation of electricity is from higher carbon sources and is an indirect transmission to the end-user suffering efficiency losses along the way?
•Perkins: Absolutely. When we look at these technologies, we have to look at them from the full economic cycle—the time it takes to make, transport, store, use and then dispose of it. If you look at it in a scientifically honest way, low-carbon fuels have a wonderful place at the table. Also, you’ll never hear me talk about climate without talking about health; climate tends to be about the health of the Earth. Health is about living things—humans, plants and animals—and it’s about things like NOx emissions and particulate matter.
Then there is justice. I refuse to believe that changing electric prices by a factor of two or three is good for everyone. I think in the climate, health and justice lens of today, low-carbon fuels have a role to play, and not just as a bridge fuel, but as a fuel for the foreseeable future. I believe that in 2030, 2040 and 2050, batteries will be different than they are today. Solar and wind will probably be different in 2050 as well, but with absolute certainty, gas/propane furnaces, water heaters and gas stoves will be materially different in 2050.
•ICM: You’ve mentioned that propane is a low-carbon fuel—is that universally accepted from the scientific, environmental or the public policy sectors?
•Perkins: You have to look at people’s motivation. I try to look at this from all levels—scientific, climate and public policy. I find that so much of this is hyped-up because people are trying to convey a specific point of view. If you step back for a second and think about decarbonization, when we have so much consumption of diesel fuel, gasoline and coal, using lower-carbon fuels has an immediate impact on carbon reduction. We want a world that exists with reliable power, heat, hot water and a place to cook our meals; I don’t prescribe to know what will happen past 2050, but until then, I don’t know that we’re going to build much more hydro-power, which is quite clean in terms of carbon. There has been talk of small-scale nuclear, but I believe nuclear is on its way out, along with coal. How are we going to replace those vast producers of clean energy without using more propane or natural gas?
•ICM: Does PERC do any lobbying or public relations? How do you get your version of the story across? Because certainly, here in the Northeast where ICM is located, the story from public policy makers is somewhat different than what your story is.
•Perkins: The story from the public policy people is that the best way to clean up the climate is to install heat pumps. I don’t know how many engineering degrees they have, but certainly heat pumps have a wonderful coefficient of performance at 60°F, but I wonder if they’ve talked to people who actually used even the most modern heat pumps at -25°F. Have they even studied the coefficient of performance at those low temperatures or thought about the real impact on comfort, health and on the electric grid when the coefficient of performance is no longer three or higher, but dropped far below one? Propane would be much more beneficial, not only for comfort and cost, but also for the environment.
Let me get back to your question of “Does PERC lobby?” We are exclusively prohibited from lobbying, so when I talk to you about solutions and public policy, we look at solutions in a very clinical way. What does the scientific data lead us to believe about decarbonization? What does it lead us to believe about impacts on health and justice? We really leave public policy to others once we have presented a clear view of the science and benefits. We do try to inform not only those who sell propane, but also those who use propane about its features and benefits and why it is a wise choice. We do tend to advocate for using propane in the situations where it makes sense. We’re trying to get to a healthier climate and to healthier people in a way that is intellectually honest.
•ICM: Is the industry working on an alternative drop-in fuel that would have a lower carbon score than propane as we know it today?
•Perkins: Yes, the carbon-intensive propane of today is around 79. By the way, the U.S. grid today, because it’s still intensely driven by coal and natural gas, is almost twice the carbon intensity of propane. However, as we think about our world in 2030, 2040 and 2050, we know we must drive down the carbon intensity of propane.
The first arrow in the industry’s quiver was renewable propane, which is making propane from fats and oils. This can have a carbon intensity in the high teens, but generally, depending on the feedstock, that carbon intensity is around 20. Therefore, give or take, we’ve already cut our carbon intensity by 75%.
However, I don’t believe that’s good enough. Then we began thinking about dimethyl ether (DME) and then renewable DME with an ultralow carbon intensity. I tend to believe the fuels of tomorrow won’t be just propane, but could be any combination of those four fuels—propane, DME, renewable propane renewable DME. I haven’t yet talked about the things we’re working on in various labs across the country—propane as a transporter of hydrogen and propane with carbon capture. Another thing we’re working on is a plasma technology to capture methane, which is itself a greenhouse gas. There would be great benefits to the climate if we could capture unburned methane and convert it straight to propane. The future is very bright around renewable fuels.
•ICM: How close are renewable propane, DME and renewable DME to being market-ready? Would they be market-ready as a plug-in fuel?
•Perkins: We’re running renewable propane in probably four or five States, generally in the transportation market and in material handling. We are also testing blends of propane, renewable propane, DME and renewable DME in different applications. Our goal is, as you correctly say, always to have a drop-in fuel, be able to deliver it in the same vessels and store in the same tanks that we use today. We know how to use DME and renewable DME directly, but they’re not really drop-ins yet for propane appliances and propane engines. Everything we’re working on are blends that are drop-in ready. Renewable propane is ready today and renewable DME should be ready to use within 12 months. In the future, there could very well be blends specific to the application; we could actually have the builder mix a blend of propane and renewable propane for residential or commercial construction. We may get to the point where there would be a cocktail that could be blended by State, by use or even by end-user need.
•ICM: Many ICM readers are retail propane distributors, mostly for residential heating and hot water, who are also retail heating oil delivery retail marketers. The oil heating industry has already started introducing blends of alternative ultralow carbon fuels such as biodiesel. Recently, the transition has become more aggressive. One of the biggest issues they are facing is the convincing of public policy makers, particularly here in the Northeast, that these low-carbon fuel mixes are much better for carbon reduction than electrification, which is what you’re saying as well. Do you see any synergy here between the two industries, or any possible cooperation?
•Perkins: I think there has to be an improved, cooperative, working relationship between the oil, propane and natural gas industries. I always commend oil dealers, because I think they saw this coming and began working on decarbonization long before other industries. The one thing that’s nice about oil and propane is that we’ve always known how to work together with other fuels. We’ve never really been the “gorilla on the block” like natural gas.
The homeowner of the future will probably have solar roof tiles or solar panels, might have a wind turbine and certainly a battery, and I think both the oil industry and the propane industry are well accustomed to being a part of the solution in multi-fueled homes.
•ICM: Do you see the introduction of lower carbon versions of propane as an area for possible market growth?
•Perkins: Between efficiency improvements and renewable fuels, there is a grand future. However, one area where I find the conversations have been misleading is in regard to buildings; there is this overarching thought that removing fuels and moving into electricity will be beneficial. It’s obvious that all we’d be doing is trading a reliance on fuels. In the U.S., we’ve at least learned how to become completely self-dependent on our own fuels. Are we now going to trade that for a reliance on minerals, batteries, etc.? Are we trading our own self sufficiency for a tremendous reliance on China?
Also, think about the full economic cycle of minerals and mining, as well as battery use, storage and disposal. What are the improved benefits to the Earth’s climate? You see a lot of smart scientists now beginning to question this move towards electrification—is it truly benefiting the climate?
I think if we just keep our eye on the prize, which is reducing carbon, that low carbon fuels will have a big seat at the table.
PERC’s operations and activities are funded by an assessment levied on each gallon of propane gas at the point it is odorized or imported into the United States. More about PERC at propane.com. ICM