Trump executive orders: What propane businesses, consumers need to know

Since returning to office, President Donald Trump has wasted no time, releasing dozens of executive orders (EOs) on his first day back in the White House.

Various EOs are relevant to the propane industry. As global economics is a key market condition that will influence changes in the price of products like propane, commercial propane supplier DCC Propane LLC has analyzed the initial reaction to the announcements.

EOs that will be felt by the propane industry

Of the dozens of EOs, those that will grab the attention of businesses tied to the propane industry and their consumers include actions to:

• Adjust the tariffs that affect the energy sector to increase the competitiveness seen within both domestic and international markets.
• Declare an energy emergency in which high energy prices have been put under the spotlight.
• Increase and streamline energy infrastructure and production domestically by simplifying permitting processes and reducing regulatory barriers.
• Promote energy choice and appliance neutrality by introducing policies that aim to prevent favoritism toward a single energy source or appliance to create a level playing field in the market.
• Reallocate federal grants that were previously only focused on electric vehicles to create more opportunities for the research and development of alternative energy initiatives.

How the EOs could affect the propane market for the better

Another EO to note is Trump’s signing establishing the National Energy Dominance Council. A fact sheet on the official White House site details how this move can be positive for the United States.

Detailed as a means for “positioning American energy for the next century,” this EO looks to develop American energy resources in a way that will allow the nation to rely less on foreign entities.

According to another section of the fact sheet, “American energy dominance is the most reliable way to ensure the stability and affordability of American energy prices.”

Recent history should provide some comfort for how Trump can empower energy production in the United States. After all, during his initial term in the White House, the country became a net exporter of energy for the first time in almost 70 years.

Trump’s first term saw millions of acres of land across the United States opened up for the development of domestic energy, many new energy jobs created throughout the nation and American families saving $2,500 on average per year on their gas and utility costs.

Speaking recently at the CERAWeek by S&P Global conference, Interior Secretary Doug Burgum acknowledged that the United States’ abundant natural resources significantly outweigh its $36 trillion of debt.

Burgum went on to claim that the country’s 10-year long-term interest rate would decrease if financial markets were given the opportunity to understand the value of these natural resources. He pointed out: “The interest rates right now are one of the most significant expenses we have as a country.

“So, one of the things that we have to do is unleash America’s balance sheet, and President Trump is helping us do that.”

Concerns in the propane industry about the EOs

There are some trepidations surrounding the introduction of these EOs, though.

The National Propane Gas Association (NPGA), which is working to ensure the EOs are implemented throughout each sector in which the organization works on behalf of the propane industry, had a pair of primary concerns.

As outlined by NPGA President and CEO Steve Kaminski and reported on by LP Gas, one of these concerns is the tariffs that will be placed on equipment and parts that arrive in the United States from across the globe to then be used by businesses in the propane industry.

“Steel tanks and cylinders manufactured outside of the United States and sold into the United States will get slapped with this 25 percent tariff. This is impacting a number of manufacturer members.”

Another concern of the NPGA is going to be the tariffs on propane that is coming into the United States from Canada. This is because the association lists annual cross-border propane sales from Canada into the United States to amount to $1.9 billion, but a 10 percent tariff will work out at $190 million per year.

Trump’s increase in tariffs on goods from China to 125 percent and Beijing’s imposing tariffs of 84 percent on U.S. imports at the start of April have also led to speculation about how these moves may impact the U.S. propane industry.

As reported by Reuters, industry insiders have commented that Chinese petrochemical makers, which currently purchase $11 billion of U.S. propane per year, look set to reduce output or shut for maintenance in the very near future because of tariffs on U.S. imports driving up costs.

NPGA stated that it will monitor how Trump and his administration approach tariffs. Though Kaminski did add: “This is one of our top priorities, but we also have a massive opportunity with this new administration, with the new appointees to the Department of Energy, Department of Transportation and EPA, which are all pro-energy choice, and with the new Congress.

“We have as good of an opportunity over the next several months as we’ve had in a long time to position propane very well in the future.”

Next steps for businesses and consumers

As propane has become one of the talking points following the announcement of Trump’s EOs, DCC Propane believes that businesses and consumers should investigate the benefits of using this gas without delay.

Start by evaluating your energy needs. Switching to propane can assist with many business operations and provide heating solutions around facilities. Getting in touch with a propane supplier will also help you understand the cost-saving options of switching or expanding the use of propane.

As domestic energy infrastructure and production is set to increase and be streamlined through Trump’s EOs, make sure you are keeping up to date about any legislative changes and incentives that could be introduced across the nation that will affect the price and availability of propane.

Chris Daly is the COO of DCC Propane.

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