Question of the Month: During the winter of 2013-2014, propane shortages and price spikes were widely publicized by news media, and some fleets reported difficulty getting propane for their vehicles. What really happened and what steps can propane fleets take to protect themselves from similar issues in the future?
Answer: Several factors contributed to the recent winter supply constraints and increased propane prices, including record low temperatures around the country (the 2013-2014 winter was almost 30% colder than the previous winter), increased rain fall requiring additional propane supply for crop drying, pipeline outages (the Midwest Cochin pipeline shut down for three weeks in December 2013), Canadian supply constraints, and increased exports leading to reduced propane reserves. It is important to note, however, that while the demand for propane used to heat homes in colder months fluctuates, fleet demand for propane remains stable throughout the year. As a result, propane suppliers are generally willing to offer longer term fuel contracts to fleets at prices that do not vary during the winter. But fleet customers need to plan ahead and negotiate these agreements in advance. Don’t wait until the coldest day of the year to start asking questions.
Fleets should develop and maintain a long-term fuel contract based on projected consumption with their local propane marketer or fueling station operator. These contracts can provide a reasonably steady price for propane year-round, regardless of temperature fluctuations and other issues. However, fleets that fuel their vehicles at retail locations where there is no contractual relationship can expect to pay the current market price, which may be equal to or higher than gasoline during peak use periods. As such, the propane price spikes reported in the winter of 2013-2014 primarily affected fleets and drivers without fuel contracts.
While some fleets with fuel contracts also faced supply limitations and price increases this winter, these incidences may have occurred as a result of other circumstances. For instance, some pricing contracts are set up to fluctuate based on a floating commodity price, or they might be indexed to automatically track gasoline or diesel prices. In addition, state fleets may be subject to certain fueling restrictions if the governor addresses energy supply issues through executive action. The prolonged severe weather this past winter resulted in several regions declaring official states of emergency. Similarly, fleets with bi-fuel vehicles, which provide the option to fuel with gasoline, may be subject to caveats during emergency periods that would not affect fleets with dedicated propane vehicles. To avoid unwanted disruptions in propane supply and price spikes, fleet administrators should closely review current and future fuel contracts and discuss various scenarios with their propane marketer to ensure that the contract terms match up with the fleet’s needs and expectations.
Working with Propane Marketers Local propane marketers are present in most communities across the United States and can provide expertise and assistance in building fueling stations and deploying vehicles. Additionally, many marketers offer attractive lease options for fuel storage tanks, pumps, and dispensing equipment in return for a multi-year fuel supply contract. The cost of this equipment can be paid back over time through a shared savings or performance contracting agreement, virtually eliminating up-front costs to the fleet operator.
The cost to purchase and install propane fueling infrastructure can be significant depending on the fleet’s choice of refueling options; however, fuel contracts can greatly reduce the financial burden. In most cases, the fleet is only responsible for the cost of infrastructure that cannot be removed from the site when the fuel contract is over, such as the electricity line or the concrete pad for the storage tank.
Current and Future Propane Supply While the issues last winter raised concerns, it is important to note that the supply of propane in the United States is on the rise. Propane is a by-product of natural gas processing and crude oil refining. In recent years, as natural gas production levels in the United States have increased, so has the propane supply from these operations. Between 2007 and 2013, the percentage of the U.S. propane supply produced from North American resources increased from 76% to 92%. As such, propane is not subject to the same types of energy security risks as petroleum based fuels that depend on foreign oil supplies face.
For more information on propane production and distribution, pricing, supply, and infrastructure, you can visit the following websites:
GAFFNEY, SC, July 14, 2014 — Freightliner Custom Chassis Corp. (FCCC) has released a new mobile app that connects customers with its legendary, nationwide dealer and service network no matter regardless of time of day or geographic location.
The 24/7 Direct app from FCCC made its debut in Apple’s App Store for the iOS mobile operating system this week, joining recently released versions of the app for Android and Windows Phone. The 24/7 Direct app, which is available free of charge, makes FCCC customer service available 24 hours a day, seven days a week by putting the entirety of the FCCC dealer and service network in the palm of users’ hands. The app is designed for customers riding on RV, walk-in van, and commercial bus chassis.
“We design and build products made for people who love spending time on the road, which means the need to locate and connect with a dealer or service center can happen anywhere,” said Bryan Henke, manager of product marketing for FCCC. “When we say we’re ‘Driven by You,’ we mean it. And a big part of that drive is providing the best and most comprehensive support network we can. The 24/7 Direct app makes that network even more accessible and effective for our customers.”
The location-based app uses GPS coordinates to provide customers with information on the closest dealers within a set distance, from as close as 25 miles up to 250 miles. App users can then connect easily with an individual dealership via phone or email; users can also connect with FCCC directly via phone or email via the app.
The 24/7 Direct app is the first customer-focused app from FCCC; it released a dealer- and service-focused app, SalesHQ, in 2013. To download 24/7 Direct, search for “24/7 Direct” or “FCCC” in the app stores for Apple, Android and Windows Phone.
Freightliner Custom Chassis Corporation manufactures premium chassis for the motorhome, delivery walk-in van, and school bus and shuttle bus markets. Visit the Freightliner Custom Chassis Corporation website at www.freightlinerchassis.com for additional FCCC news and product information. Freightliner Custom Chassis Corporation is a subsidiary of Daimler Trucks North America LLC, a Daimler company. Read more here.
FCCC’s S2G and Thomas Built C2 Are Both in Full Production
CleanFuel USA is talking up its role in two new propane autogas powered vehicles, both now in full production: the S2G truck chassis by Freightliner Customer Chassis Corp and the Thomas Built Saf-T-Liner C2 school bus.
CleanFuel USA supplies the liquid propane injection fuel system for the vehicle’s 8.0-liter engine by Powertrain Integration, including fuel rails, lines, tank package with fuel pump, and control module. The engine is now marketed as the PIthon (F&F, May 11).
“The CleanFuel USA LPI propane autogas fuel system is technologically advanced, fully integrated and factory-installed, requiring no aftermarket modifications, for seamless integration and consistent quality,” CleanFuel USA said this morning.
Both vehicles are U.S. EPA- and California Air Resources Board-certified.
“We are ecstatic that the S2G and C2 are in full production, as demand is strong in the fleet industry for propane-powered solutions that meet these two vehicles’ market needs,” said, CleanFuel USA founder and managing director Curtis Donaldson said in release.
“With a significant order bank and ever-increasing customer interest, the potential for both products is huge.”
The PIthon engine produces 495 foor-pounds of torque at 3100 rpm and 339 horsepower at 4100 rpm, CleanFuel USA. Both the S2G truck and C2 bus feature Allison 2300 automatic transmission with PTO provision. Full article here.
Both vehicles feature liquid propane injection systems from CleanFUEL USA, paired with Powertrain Integration's purpose-built 8.0-liter engine and Allison's 2300 series automatic transmission. The engine offers 495 ft.-lbs. of torque at 3,100 rpm and 339 hp at 4,100 rpm.
"We are ecstatic that the S2G and C2 are in full production, as demand is strong in the fleet industry for propane-powered solutions that meet these two vehicles' market needs," says Curtis Donaldson, founder and managing director of CleanFUEL USA. "With a significant order bank and ever-increasing customer interest, the potential for both products is huge."
Both the S2G and C2 are backed by warranties and service programs, and they are certified by both the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB).
CleanFUEL USA notes that its autogas fuel system is fully integrated at the OEMs' factories, requiring no aftermarket modifications.See full article here.
The Arkansas Energy Office is offering funds through its Clean Fuel Vehicle Rebate Program to support fleets' deployments of vehicles that run on compressed natural gas (CNG) or propane autogas.
The program allows fleet operators to recoup some of their investment in propane or CNG vehicles, whether converted assets or new vehicles. The rebates are 50% of the conversion or incremental cost of the vehicle, capped at $4,500. Funding totaling $150,000 is being made available in this current round of rebates. There is no application deadline, but the rebates are available only on a first-come, first-served basis.
The state also recently awarded funds through its Gaseous Fuels Rebate Program to support the development of two public-access CNG stations: Kum & Go, located in Springdale, received a $400,000 rebate, and Arkansas Oklahoma Gas' CNG station project in Fort Smith received $200,000.
"The popularity of clean fuel vehicles continues to rise, but more can be done to entice consumers to make the switch to clean fuels," says Mitchell Simpson, deputy director of the Arkansas Energy Office. "By providing incentives to both fleet operators and fuel stations, there is a better opportunity for alternative motor fuels to take hold." Read full article here.
For more information about the alt-fuel vehicle rebates, clickhere.
BOULDER, Colo.--(BUSINESS WIRE)-- Medium and heavy duty vehicles (MHDVs) represent less than 5 percent of the total vehicle market today, and the vast majority of these use conventional internal combustion engines (ICE) powered by either gasoline or diesel. That is changing as less expensive alternatives to petroleum-based fuels, such as natural gas, liquefied petroleum gas (LPG – also known as propane or autogas), and electricity make inroads in the market. According to a new report from Navigant Research, worldwide sales of alternative fuel vehicles will reach 14 percent of total sales of medium and heavy duty vehicles by 2035.
“Attractive business cases for medium and heavy duty alternative fuel vehicles are emerging across varying segments of the market,” says Scott Shepard, research analyst with Navigant Research. “Natural gas has a significant advantage over most alternative fuels, in that low fuel costs and advances in infrastructure for both liquefied natural gas and fast-fill compressed natural gas make the fuel competitive in all market segments, including heavy duty long-haul trucking.”
The total number of MHDVs in use worldwide will nearly double between 2014 and 2035, according to the report. Unlike light duty vehicles, most of today’s MHDVs are fueled by diesel fuel. While diesel will remain the primary fuel choice of MHDVs throughout the forecast period, the percentage of MHDVs powered by diesel is expected to fall from more than 79 percent in 2014 to 76 percent in 2035.
The report, “Transportation Forecast: Medium and Heavy Duty Vehicles”, analyzes the global MHDV market in seven segments: conventional ICE vehicles, hybrid electric vehicles, plug-in hybrid electric vehicles, battery electric vehicles, natural gas vehicles, propane autogas vehicles, and fuel cell vehicles. Forecasts for two segments fueled primarily by petroleum derivatives (ICE and hybrid electric vehicles) are broken out by region and by fuel: gasoline or diesel. Global market forecasts for sales and conversions and the number of vehicles in use, segmented by country, drivetrain, and primary fuel, extend through 2035. An Executive Summary of the report is available for free download on the Navigant Research website. Read more here.