State of the Alternative-Transportation Fuel Industry

Whether you have a fleet of 500 vehicles or five, reports, research, and the touted results from utilizing alternative-fueled vehicles has probably made its way onto a fleet manager’s radar in some form or another. Here is an overview of the current state of alternative fuels and their status in the fleet industry.

Measuring Propane Autogas

Propane autogas has always focused on commercial fleets, those that are centrally fueled, mainly with return-to-base operations whose vehicles typically travel within a 200-mile radius of the home base, ac-cording to Tucker Perkins, chief business development officer for the Propane Education & Research Council (PERC).

“Currently, we have dominated the light-duty segment, as well as school buses, local pickup and delivery, people moving (such as Super Shuttle and mobility companies), and just about everyone with access to a van, pickup truck, or taxi cab,” Perkins said. “These fleets see the value of propane autogas because maintenance is easy and cost-effective and fuel prices with propane are about half that of gasoline or diesel. Most fleets we talk to see ROI within the first year of operation.”

Moving forward, Perkins believes in growth, witnessed by recent robust sales in the school bus fleet industry, working with both Blue Bird and Thomas Built. Additionally, propane autogas has expanded into the medium-duty market, including the Freightliner Custom Chassis Corp. walk-in van based on the MT-45 chassis and the Ford F-650, with dates announced for the Ford F-750.

“What excites us with the medium-duty vehicle class is that local pickup and delivery companies, such as movers, paper companies, crane trucks, etc., are now offered propane autogas options,” Perkins said. “When you really do the math, the total cost of operation with propane autogas — including fuel costs, maintenance, and garaging — is one of the lowest of any fuel.”

One example of a fleet adopting propane autogas is UPS, which tested 20 vehicles and made an announcement that it was purchasing 1,000 units at the 2014 Work Truck Show.

“If people are driving 20,000-25,0000 miles per year or more, and keeping their vehicles in service for five years or more, the economics are very favorable for using propane autogas,” Perkins noted.

In regards to infrastructure, it tends to be a non-factor for propane autogas, according to Perkins.

“We are proud of where our infrastructure is today, with more than 3,000 publicly accessible sites in the U.S.; however, we feel that price and ease of propane infrastructure is not a factor and not a barrier to adoption.”

Most fleets utilizing propane autogas feature return-to-base operations, and installation costs for a fueling site is less than $50,000 and is easy to install, maintain, and operate. The propane industry is now focused on installing more public sites and refueling dispensers on-site for business locations.

“Additionally, propane autogas fueling sites are easy to expand or even change locations, should the business grow or move,” Perkins said, noting that power and maintenance of a propane autogas fueling station only adds approximately 1 cent per gasoline gallon equivalent (GGE).

Propane autogas prices are stable and product is readily available. Unfortunately, the unusually harsh 2013-2014 winter did cause a supply shortage in parts of the upper Midwest, causing some price volatility and fluctuation.

“We still produce far more propane in the U.S. than we consume. It was not a supply problem, but a logistics problem,” Perkins noted. “The rare supply and logistics problems that were experienced are being addressed over the next six months to ensure it doesn’t happen again.”

Looking toward the future, the shale gas revolution in areas of the U.S. will produce unprecedented amounts of propane, which is a by-product of natural gas development.

“It’s more than we have ever had, and coming from natural gas it’s lighter than crude oil,” Perkins said. “We still have to grow the base business, including more propane-autogas-powered forklifts, lawn mowers, etc.”

Currently, Perkins noted the propane autogas industry is thrilled.

“We have supply in excess of demand. We have a relatively stable price and a base of bigger users. We are excited about a migration to direct-injection engines, moving up into larger horsepower and torque to move us more into the traditional diesel space,” he said.

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