Securing the Long-Term Future of the LP Gas Industry

By Stephen Rennie, managing director, Calor Gas Ltd

As the new chairperson of UKLPG, I am both proud and delighted to be contributing to the lpg industry’s future development at what is truly a watershed for us all.

This year has proved to be a testing year for all of us, with the introduction of both Competition Commission Orders, as well as the publication of the ICL Inquiry Report and the subsequent Health & Safety Executive (HSE) consultation. The buried metallic lpg pipework replacement programme is now well underway and will continue to be a key focus for lp gas suppliers throughout 2010 and beyond.

However, we need to move on and start to build the wider case for lpg gas – particularly in how it could be a key part of achieving an affordable low carbon future for the British countryside. If we don’t, it’s not outrageous to say that the lpg industry’s very future could be under threat.

You can’t turn on the television or pick up a newspaper without reading about the massive threat posed to the planet by climate change. The blame for climate change is being placed firmly at the door of fossil fuels, and that includes lp gas. In short, we are being perceived as part of the problem. We have to fix this so that people see us for what we truly are – part of the solution.

Now, many LP Gas readers will be thinking that this will be easy. After all, everyone knows what lpg is and how brilliant it is – sadly, this is not the case.

Recent research in mainland Europe and the UK shows that there is very little awareness or understanding as to the full range of uses and benefits of using lpg gas compared with other fuels, such as oil. Lp gas is much cleaner than oil and solid fuels, lower in carbon and much more versatile, but nobody knows!

This is why the World LP Gas Association (WLPGA) has adopted the strapline ‘Exceptional Energy’ to try and capture the sense of the enormous benefits lpg has to offer. Research by the WLPGA has shown that the awareness of lpg gas amongst policymakers is very poor, and we know this is certainly the case in the UK.

We need to turn to address this collectively as an industry and work much harder to get noticed and be heard. All too often we end up as the Cinderella of the energy world. This has to change.

We will try at every opportunity to influence government as much as possible, particularly with regard to the Renewable Heat Incentive, which is funded by a tax on heating oil, coal, natural gas and lpg. We will have to add this tax to all our customers’ bills from April 2011, which will be used by the Government to fund wind, solar, biomass and other so called renewable initiatives.

It will come as no surprise to you that UKLPG is opposing this tax, as it is going to make rural poverty, which is already much higher than in urban areas, even more of a problem. The Government’s own figures estimate that it will add over 20 per cent to average gas bills by 2020. That’s without the huge hikes in electricity prices that will be needed to fund the renewables obligation, carbon capture and storage and new nuclear.

The latest cost benefit numbers for these schemes do not add up and we believe there is a quicker and more deliverable solution available now. Fitting more efficient appliances today will reduce carbon emissions immediately by 30 per cent and does not need a Renewable Heat Incentive to make it happen. In the near future, new technology, like Calor’s fuel cell boiler, will offer even more emission savings at a relatively low cost.

Mounting pressure on governments to meet their emission reduction targets by 2020 dominates their policy decisions, as they seem to endlessly move the goalposts for the industry. This reinforces the need to continually present the strong case for lpg as a cost effective and proven solution for the reduction of CO2 emissions. With emerging technologies, such as micro combined heat and power (CHP), this argument only becomes more compelling and will be a key message for UKLPG and its members throughout 2010.

Whilst Calor will continue to work hard to promote its own business, we are committed to supporting the needs of the wider industry through our trade association. UKLPG continues to be the key industry body in ensuring the lp gas voice – our voice – is heard by opinion formers and policymakers.

It is therefore vital that our industry trade body remains strong and representative, both in terms of finance and breadth of membership. I would urge anyone reading this article, if not already a member of UKLPG, to consider joining this year to support the vital work UKLPG undertakes to secure the long-term future of the UK’s lpg gas industry.

These are indeed changing times, and we will ensure that the case for lp gas and Calor is well made and the versatility and cleanliness benefits positively communicated. We have a great heritage as Calor approaches its 75th year, and it is our job to ensure we become even more relevant to the UK’s energy needs over the next 75 years.

Contact Calor Gas Ltd on 01926 330088 www.calor.co.uk

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