The Role of LPG in Energy Security

by Nhlanhla Gumede, Full Time Regulator Member @ NERSA

Liquefied petroleum gas (LPG) is a mixture of butane and propane, proportions of which are dependent on the season, but the summer grade is 40% butane and 60% propane. In South Africa, LPG is produced almost entirely as a by-product of the oil-refining process but with the closure of refineries in the country, a greater portion of the country’s needs will have to be met through imports.


For fuel retail service stations, the three key strategic success factors are – location, location, and location. For LPG and other fuel gases, the three important issues are safety, safety, and safety. However, LPG, the “energy in a bottle”, if used correctly, is an extremely safe source of energy. LPG is versatile, relatively easy to store, and an extremely potent energy carrier. For intermittent thermal applications, especially domestic and commercial applications, LPG presents the best value-for-money solutions.


South Africa is not blessed with gas resources, and therefore apprehension about a dependence on such an energy carrier is understood. The increased dependence on imports will affect South Africa’s energy independence aspirations and expose the country to the vagaries of commodity price fluctuations and exchange rate variations. However, there is no better energy carrier for ad hoc thermal applications than gas. The old adage that “when all you have is a hammer, every problem looks like a nail,” is very prevalent in energy. However, the correct approach is to “use the right tool for the right job.” Gas is the right tool for thermal energy applications.


It is important for one to understand one’s energy demand profile and to be aware of the relationship between energy demand and supply options available. Furthermore, it is also key to appreciate the affordability, ease of use, safety, environmental, and health issues linked to each supply option. Energy security seeks to encapsulate all these issues and goes beyond supply security. South Africa defined energy security as “ensuring that diverse energy resources, in sustainable quantities and at affordable prices, are available to the South African economy in support of economic growth and poverty alleviation, taking into account environmental management requirements and interactions among economic sectors.” It is unfortunate that for commentators, energy security has been reduced to supply security, disregarding issues pertaining to demand security, affordability, and environmental sustainability.


Natural gas is, for a number of reasons, still a luxury in South Africa. Sustainable gas regime demands simultaneous solutions of three interrelated issues, namely: i) consumer demand for the security of gas supply to allow them to switch, ii) requirement by suppliers for the security of demand to facilitate investment in supply, and iii) the need for investment in appropriate gas infrastructure (pipelines, storage, and appliances) by suppliers and consumers alike. LPG is the most appropriate way to build demand to a critical mass that is required to drive the requisite gas supply framework. For South Africa, to adequately meet the majority of residential and commercial energy demand, solving the gas trilemma is important.


For people who had been previously denied access to electricity, promoting the use of gas for space heating, cooking, and water heating, could be perceived as a step backward. Universal access to electricity is an admirable aspiration for all South Africans, however, throwing electricity into all energy problems is not a solution. In developed countries, with great renewable energy agendas, gas is integral in their gas supply mix, not only in terms of gas-to-power but in the direct use of gas.


Figure 1 – Gas use in the US


As can be seen in Figure 1, according to the Energy Information Administration (EIA), “In 2020, 61% of U.S. households used natural gas for at least one energy end use, according to our 2020 Residential Energy Consumption Survey (RECS). Space heating, water heating, and cooking were the most common end uses; more than half of U.S. households used natural gas for space heating, closely followed by water heating… Although space heating, water heating, and cooking are the most prevalent household uses of natural gas in the United States, it is also used for clothes drying, outdoor grilling, and heating pools and hot tubs.”


For thermal applications, the use of gas is the most economical decision to make. Considering Table 1, it is quite clear that using LPG for heating is the cheapest option for residential consumers. Consumers can save up to three-quarters of energy costs through the correct choice and use of gas. LPG has no equal for heating.


Table 1 – Theoretical comparisons of energy carriers


Safety concerns associated with LPG are real. Gas is a potent energy carrier and it demands that it be treated with the respect it deserves, which includes correct choice, installation, and safe use of appliances and equipment. Gas is arguably the correct tool for thermal applications but it demands correct and correctly maintained appliances, and safe supply infrastructure installation (eg. home piping, etc.). For gas, safety is the ultimate – including ensuring that both installations and installers are accredited. Gas is ultimately the correct tool for thermal applications.