Oct 5, 2020 - Economy
Column / Harder Line

In a pandemic winter, dinner comes with a side of propane

Illustration of a waiter holding a serving tray with a propane tank

Illustration: Sarah Grillo/Axios

Americans' plans to socialize outside in colder weather — when COVID-19 will still be a threat to indoor gatherings — are prompting an expensive and environmentally questionable rush on outdoor heaters.

Why it matters: Heating outdoor patios is a big new cost for businesses, and the energy sources are almost always fossil fuels that contribute to climate change.

Where it stands: Nearly 50% of full-service restaurants say they’re taking actions to extend outdoor dining seasons, including patio heaters, according to a survey by the National Restaurant Association. Other businesses, like ski lodges, are also buying more outdoor heaters.

  • Jeremy Sasson, president of Michigan-based Heirloom Hospitality, which runs three restaurants in the Detroit area, said he has increased the numbers of heaters he uses from eight or 10 in previous years to 25 this year.
  • The cost of fuel for heating — which is just one of numerous wholly new categories of costs for restaurants in the pandemic — is about the same as some of his rents, Sasson said, coming in at around $200 a day.
  • “I’m willing to spend the money to stay open,” said Sasson, who employs between 200 and 250 people. “It stabilizes the jobs within the restaurants.”

How it works: Propane, a liquid gas that comes from crude oil and natural gas, is typically the most popular type of energy source because it is freestanding and can be moved around. Electric heaters are another option, but they are not mobile.

  • Among fossil-fuel products, propane is the second cleanest behind natural gas, according to the U.S. Energy Information Administration (EIA).
  • Electric heaters may appear cleaner, but considering almost two-thirds of America’s electricity comes from natural gas and coal, they’re not cleaner and can actually be less efficient, according to experts.
  • In any case, additional carbon emissions come with the use of outdoor heaters of any type unless renewable energy is powering an electric heater.

By the numbers: It's hard to pin down either the total number of heaters being used or the amount of energy being used given the lack of publicly available data. Some experts have nonetheless tried to crunch the numbers.

  • Paul Sankey, an independent oil analyst, estimated that restaurants in New York City using outdoor heaters may consume about 1,600 barrels of propane a day.
  • That’s compared to the approximately 100,000 barrels of propane typically used for commercial uses throughout the entire U.S., per EIA data. Although this is a drop in the bucket, it's for just one (large) city.
  • From an emissions perspective, the overall impact is likely small, but it’s still a whole new category of emissions being created when scientists are saying the world needs to cut emissions.
  • Looking just at the fall season and estimating that maybe half of America’s roughly 1 million restaurants might use outdoor heaters, one environmentalist crunched numbers on behalf of Axios.
  • This person, who doesn’t want to be named given the unofficial nature of the analysis, concluded such heaters could create 1.5 million tons of carbon dioxide emissions per year, which is 0.02% of today’s emissions.

The intrigue: New York City, which has one of the most aggressive climate-change plans of any city, is allowing more use of outdoor heaters, including propane, in the wake of the pandemic.

  • “That doesn’t change our commitment to fighting climate change in New York City,” Mitch Schwartz, a spokesperson for Mayor Bill de Blasio, said in an email to Axios. “It only means we’re in unusual times, and we’re going to do what it takes to support the restaurants that make our city great.”
  • The move has prompted some local media to criticize the city and compare it to other leaders on climate change, namely France, which is banning outdoor heaters (however, only after this winter).

What we're watching: The booming propane business. Paraco, a New York-based propane company, usually sells 100,000 fuel tanks per month this time of year to New York City and surrounding areas. Now, it’s up to a monthly 250,000 tanks.

  • Its sales in this category are up 200%, and one big-box store told the company its patio heater sales are up 1,500%.
  • Sankey describes it as “the seemingly all-but COVID-proof propane market.”
  • Shortages are not expected — for now, per Paraco officials and other propane experts.

Editor’s note: This story has been corrected to say that two-thirds of U.S. electricity is generated by natural gas and coal (not natural gas and oil).

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