The Propane Effect

Fleet sees return-on-investment in just a year’s time

 Among the considerations fleets must review before switching to an alternative fuel are vehicle miles driven in a day, total cost of ownership, infrastructure improvements, and fuel price. For some fleets, answering that quartet of questions opens a number of possibilities. For Lake Michigan Mailers, though, the answers led to a single conclusion.

“Not only did propane autogas fulfill all of our requirements, but a study showed it would give us the fastest return on our investment,” says David Rhoa, president. “When we saw the results, we were absolutely convinced that propane autogas was the most viable option for our needs.”

A typical Ford E-150 van in Lake Michigan’s 30-vehicle fleet runs more than 100 mi. a day, making electric vehicles an impractical option, Rhoa says. Compressed natural gas was rejected because of the costs associated with building a supporting infrastructure for a fleet the size of Lake Michigan. The E85 blend of gasoline was also not a viable solution because fewer Michigan gas stations support that fuel. But propane was the answer to each question asked. With the help of propane supplier AmeriGas, which has installed a 1,000 gal. propane autogas tank at Lake Michigan’s Kalamazoo, MI, facility, the company is on its way to a fleet conversion. Read more here.

Five Green Trends in Fleet

When it comes to the world of alternative fuels, alternative power and environmental initiatives for fleets, the Green Fleet Conference is the hub of the universe. From last week’s conference in Phoenix and other recent travels and inquiries, here are a few trend lines to follow:

Natural gas is taking over the universe.

Not really, but it feels that way. In recent years, the movement to compressed natural gas (CNG) was advancing with the help of third-party CNG conversion manufacturers such as Westport, Landi Renzo and Venchurs. These companies are not only surviving, but they’re also expanding their offerings. But when the auto manufacturers initiate their own product offensives, you know that CNG has come into its own.

General Motor’s next generation HD pickups will have a bi-fuel CNG option for all cab styles, while dedicated CNG options continue to be available on GM vans. Chrysler’s CNG Ram 2500 went on sale this year. Ford has expanded CNG offerings with four QVMs now. Large truck makers, including Kenworth, Navistar and Mack, are adding options for CNG and LNG (liquefied natural gas). Navistar head Dan Ustian has called natural gas “the most realistic alternative fuel option to the trucking industry.”

The premium on CNG conversions is shrinking. Materials costs for tanks are coming down and economies of scale are being realized. A few years ago, light-duty conversions retailed for more than $11,000; today, Venchurs’ conversion for Ford’s F-250 and F-350 models with a 24-gallon tank costs $8,350.

At Green Fleet, when the conversation centered on fleet implementation and measurable return on investment, fleet managers were talking about CNG more than anything else.

Propane is still a part of the conversation and is expected to grow, especially in vocational applications such as school transportation and shuttle buses. Though per-gallon pricing is generally higher than CNG and pricing is subjected to more fluctuation, propane is particularly attractive because the costs to install a fueling station are significantly less than one for CNG.

The EV market has stalled (at least with fleets).

Again, when truck manufacturers either expand or abandon their alt-fuel or power product portfolios, it’s a good way to gauge how the trade winds are blowing. Last year, Ford ditched its Transit Connect Electric upon the bankruptcy of electric components maker Azure Dynamics. Navistar is no longer making its eStar electric truck, while Eaton has quietly dropped its Hydraulic Launch Assist system for diesel-electric hybrids.

At a Green Fleet seminar, Andrew Douglas of Kenworth reported “a dramatic drop off in sales of diesel-electric hybrids in favor of CNG.” In general, fleets report that they are staying on the sidelines when it comes to electric because the technology still relies on government subsidies, and no one thinks that existing subsidies will remain for much longer. Read more here.

Propane and Natural Gas Vehicles Could Get a Nice Boost from New Legislation

State representatives Sean J. O'Brien and Dave Hall introduced legislation into the Ohio House of Representatives this week that is aimed at goosing the state's alternative fuel vehicle sector.

Central to the proposed bill is a gaseous fuel vehicle conversion program, covering vehicles that run on compressed natural gas (CNG), liquefied natural gas (LNG) or propane autogas. Through the program, the state would offer grants to public fleets - namely, state and municipal entities, school districts and public transportation agencies - as well as nonprofit corporations.

These grants would cover 100% of the cost of CNG, LNG or propane vehicle conversions, or 100% of the incremental cost of buying an OEM natural gas or propane vehicle.

Should the bill be enacted, the specific eligibility requirements would need to be specified. But the bill does note that the cap on these grants would be $500,000 per "eligible entity." And O'Brien's office tells NGT News that the grant program overall would be capped at $16 million annually.

For private business fleets and individuals, the bill would enact tax credits for alternative fuel vehicle purchases or conversions. Like the public fleet grant program, these tax incentive would cover CNG, LNG or propane vehicles - both dedicated and bi-fuel models.

The credits for private fleets and consumers would be equal to 50% of the incremental cost of acquiring an alt-fuel vehicle from an OEM, or 50% of the vehicle conversion cost. The legislation does include per-vehicle caps on the tax incentives: For vehicles 8,500 lbs. GVWR or less, $5,000; for medium-duty vehicles 8,500 lbs. to 10,000 lbs. GVWR, $10,000; and for medium- and heavy-duty vehicles that come in at more than 10,000 lbs. GVWR, $25,000.

The bill specifies that the grant and tax-credit programs be phased out after a five-year period. This measure, says Clean Fuels Ohio Executive Director Sam Spofforth, was particularly helpful in attaining the immense co-sponsorship for the O'Brien/Hall bill - some 61 fellow House members, along bipartisan lines, O'Brien's office confirms. Read more here.

Energy Department Launches Alternative Fueling Station Locator App

As part of the Obama Administration's commitment to expand access to data and give consumers more transportation options that save money at the pump, the Energy Department today launched a new mobile app to help drivers find stations that provide alternative fuel for vehicles.

Developed by the National Renewable Energy Laboratory with support from the Energy Department, the Alternative Fueling Station Locator app provides information on more than 15,000 stations across the country. Users can search for stations that offer electricity, biodiesel (B20), natural gas (compressed and liquefied), ethanol (E85), hydrogen, and propane. After the user selects a fuel, the app maps the stations closest to his or her current location. The app also includes the stations' addresses, phone numbers, and operating hours. Using the app's filters, drivers can also search for stations that meet certain parameters, such as whether the station is open to the public and what payment methods it accepts.

Alternative fuel vehicles produce fewer greenhouse gases and harmful emissions than their conventional counterparts and reduce the United States' dependence on imported oil. This app is just the latest tool the Energy Department has made available to help drivers find the right vehicle and fuel that suits their needs. It is a mobile version of the Alternative Fueling Station Locator website, one of 15 tools designed to reduce the use of petroleum in transportation available on the Department's Alternative Fuels Data Center. Read more here.

Texas Part of Global Autogas Trend

Home to the world’s largest propane storage facility, Texas continues to be among the global leaders in using propane autogas to power fleet vehicles and mowers. Propane autogas, the world’s top alternative fuel, is one of most widely used global fuel sources, ranking third only to gasoline and diesel. Cost-effective and clean-burning, autogas is used to power more than 21 million vehicles worldwide. Because of its economic and practical uses, the number of fleet operators converting to propane autogas both in Texas and around the globe continues to grow.

Along with Texas, fleets in UK, Hong Kong, India, and Australia are switching to propane autogas. For instance, Hong Kong is making strides transitioning to alternative fuel. The Hong Kong version of Ford Motor Co.’s Transit Connect Taxi, which will run on a liquefied petroleum gas fuel system, made its debut in the Chinese city late last month.

In Texas, there are more than 2,000 school buses powered by propane. State agencies like the Texas Department of Transportation have more than 900 propane vehicles in their fleets, and local governments like municipalities and counties are also making the switch to propane. Public entities are not the only ones switching to the popular alternative fuel; businesses like Frito Lay, Dish Network and DHL are also going green with propane. Read more here.

Feds Develop Alt-Fuel Analytical Tool

Several federal environmental agencies have developed an online calculator for fleet managers that helps estimate gasoline usage, greenhouse gas emissions, air pollutant emissions, and the cost of ownership of vehicles.

The Argonne National Laboratory and Clean Cities have released the Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET) tool, which uses simple spreadsheet inputs. The AFLEET tool provides three calculation methods.

First, the Simple Payback Calculator estimates a simple payback of the purchase of a new alternative-fuel vehicle compared to a conventional counterpart. The calculator factors in acquisition and annual operating costs, as well as average annual petroleum use, greenhouse gases, and air pollutant emissions.

The tool also offers the Total Cost of Ownership Calculator, which estimates the net present value of operating and fixed costs over the years of planned ownership of a new vehicle, as well as lifetime petroleum use, greenhouse gases, and air pollutant emissions.

Lastly, the Fleet Energy and Emissions Footprint Calculator estimates the annual petroleum use, greenhouse gases, and air pollutant emissions of existing and new vehicles, taking into consideration that older vehicles typically have higher air pollutant emission rates than newer ones. Read more here and download the spreadsheet here.

Stakeholder Spotlight: Seguin Independent School District

Seguin Independent School District's Transportation Department shares their story for implementing propane school buses into their fleet.

Every day the transportation department for Seguin Independent School District (ISD), the largest school district in Guadalupe County, transports students all across the 365-mile district. Whether students are attending sports functions, field trips, or needing to get to and from school, there is a bus driver ready at the wheel to transport them.

Like most districts, Seguin ISD’s school buses are big, bright yellow buses with the name of their district stenciled across the sides in black paint. However, unlike conventional buses that run on diesel, many of Seguin ISD’s buses run on propane.

In 2008, Seguin ISD received 21 propane-powered school buses for their transportation department. Purchasing the alternative fuel buses was not an easy decision and was conducted for nearly a year before the purchase was made.

A contributing factor to the decision to purchase the propane buses was cleaner air for students and the community. When compared to vehicles fueled by conventional diesel or gasoline, propane creates lower amounts of some harmful air pollutants and greenhouse gases. For more information on propane vehicle emissions visit: http://www.afdc.energy.gov/vehicles/propane_emissions.html.

In addition to reducing harmful emissions, there’s another important benefit to using propane. The cost of running the bus fleet on propane is much less than running it on diesel. Read more here.