Posted on 02/10/2014 4:53:03 AM PST by thackney
Natural gas has become the fuel of choice for several large companies with vehicle fleets. Now, smaller firms are beginning to catch on to the trend, too.
With a little nudging, companies that don’t have their own refueling stations are finding ways to start moving their goods and workers on natural gas.
“The fact that it’s $2 a gallon cheaper makes it a no-brainer,” said Mike Little, director of transportation for Bryan-based Mid South Baking, which delivers buns and other products to quick-serve restaurants across the South.
On an energy equivalent bases, diesel costs around $3.65 per gallon in Houston compared to around $2.19 a gallon for natural gas, according to data from AAA and Houston-area natural gas stations. Natural gas has been more than $2 cheaper than diesel at times over the last two years. Cheaper fuel: Gas for $1.52 in the heart of Houston Fuel savings that large have meant a lot for The Woodlands-based NewTexPlumbing, said William Collora, who owns the company.
“We can beat the competition with the savings we get on our trucks,” Collora said. “We’ll be more competitive than they will be and that’s the goal.”
National giants including AT&T, UPS, Waste Management and Frito-Lay have committed hundreds of millions of dollars to buying natural gas vehicles. AT&T alone spent $350 million by the end of last year for a fleet of more than 8,200 natural gas vehicles, according to the company.
But while big business has been able to invest in building refueling stations and buying vehicles that can benefit from the deep price discounts for natural gas, the option hasn’t been as accessible for smaller companies and consumers.
Now, as more natural gas refueling stations are beginning to sprout up in Texas and around the country, the fuel is catching more interest from companies of all sizes.
The number of publicly accessible compressed natural gas refueling stations has jumped by about a third nationwide since 2012, to 664 stations, according to data from the U.S. Department of Energy. Most fleets run on compressed natural gas. Some long-haul trucks use liquefied natural gas, which is more expensive but also more dense, enabling trucks to carry more of the fuel.
As early adopters begin enjoying the benefits of natural gas, other companies may follow suit, said Mark Gamber, a Houston account manager for Clean Energy Fuels Corp., which owns refueling stations nationwide.
“It’s the whole snowball effect,” Gamber said. “As a fleet starts to do it, their competitors see that they’re doing it and they look at why they are doing it.”
Economic considerations are the main motivation for making the switch.
Apple Towing, based in Houston, has six natural-gas powered vehicles in its fleet of 35 trucks, said general manager Don Royal.
The company spent about $1 million on diesel fuel costs annually, but is looking forward to lowering that tally with natural gas, Royal said.
“It’s just gone up and up and one of our biggest expenses is the doggone fuel,” he said. “So we’re just trying to cut expenses and that’s one of the ways to do it.”
More demand for the fuel for transportation purposes could help boost profits for natural gas companies — including Houston-area producers Anadarko Petroleum Corp. and Apache Corp., which have been at the forefront of efforts to promote the fuel for vehicles.
Houston-based Lodge Lumber, which has a fleet of eight trucks, began using its first compressed natural gas-powered vehicle last year. The truck is decorated with a specially printed wrap that touts the company’s use of “clean burning natural gas” in greens and blues. Natural gas vehicles produce fewer greenhouse gas emissions than vehicles running on other fossil fuels.
The annual fuel tab for the new truck will be about $11,000, 40 percent less than what it would have cost running on diesel, said J.W. Lodge, vice president of operations for Lodge Lumber.
A nearby refueling station helped Lodge Lumber make the leap to natural gas, Lodge said. Encouragement from Clean Energy Fuels Corp., which owns the station, helped Lodge see the advantages, he said.
“If that station was 20 miles or 30 miles away, in another part of the city, it probably would have made the decision much tougher and we probably wouldn’t have gone with a CNG vehicle because of the fueling infrastructure,” Lodge said. “But we were just lucky that we had a refueling station close to us.”
There were some obstacles for the type of truck that Lodge wanted. Natural gas versions of vehicles can cost more than their diesel counterparts by as little as $7,000 or as much as $40,000 for some long-haul tractor models. The truck Lodge sought out cost about $160,000 — $70,000 more than its diesel version, he said.
Lodge got help from the Houston-Galveston Area Council, which issued a grant to cover the cost difference of the vehicles over the course of five years. The grant requires that Lodge Lumber use the vehicle within the region and commit to driving it for a specified amount of the companies’ operating miles to reduce emissions, Lodge said.
Other companies, including NewTexPlumbing and Mid South Baking, switched to gas without grants.
Mid South Baking leased two long-haul trucks running on natural gas in October for its fleet of 49 big rigs, said Little, the transportation director.
The fuel cost savings involved with the newly leased trucks has helped Mid South Baking save money while also covering the increased lease payments involved with the natural gas vehicles, Little said.
He came to the decision following discussions with Katy-based CNG4America, which recently opened a natural gas refueling station in Bryan and plans to open five more stations in Texas by the end of the year.
When it comes to performance, Mid South Baking and its drivers so far have been happy, Little said.
“If the equipment continues to perform as well as it has, I see no reason why we wouldn’t be expanding the use of natural gas in our fleet,” he said.
Ten of NewTexPlumbing’s 65 vehicles now run on natural gas, owner Collora said. The company’s savings with the fuel convinced him to install his own refueling pump at the company’s headquarters.
That has produced additional savings. The natural gas equivalent of a gallon of diesel now costs NewTexPlumbing about 85 cents, compared with about $2 at retail natural gas refueling stations nearby, Collora said.
“I’m trying to do everything on natural gas,” he said. “I could see it taking off.”
I’m OK with nat. gas as a motor vehicle fuel, because it seems to be a market driven decision. Certainly more rational than electric vehicles.
CC
Why couldn’t LNG be used to replace Propane?
NG is everywhere in the northern states. If converting it to LNG wasn’t too hard it seems that would be a better option than propane.
The internal-combustion engine, particularly the Diesel configuration, is far from the end of its usefulness as the source of conversion of combustion to motive power. Two questions: when is the Diesel finally going to displace the spark-ignition engines altogether, and when will all road vehicles be fueled with either CNG or propane?
Motor vehicles were being converted to propane back in the 1950’s and 1960’s, so it is not like the technology was either that new or difficult to apply. The use of high-pressure tanks for the carrying of natural gas as a motor fuel is a distinct advance, and the use of insulated tanks for the LNG form is another major advance, but perhaps not practical for personal commuter use.
Heavier grades of petroleum could then be freed up for use as a manufacturing feedstock rather than as motor fuel, while the lighter fractions would be almost exclusively for use as motor fuel and home heating.
There should not be any homes remaining that still use fuel oil for heating. The availability of natural gas and propane should have displaced oil, like fuel oil displaced kerosene and coal for domestic fuels.
LNG requires being kept at -260°F.
This isn’t a reasonable solution for a residential user.
This really is only a solution for an industrial user that consumes the fuel up at a rather quick pace compared to storage volumes. Constant use will auto-refrigerate the storaged LNG if the consumption is large enough in comparison to the storage volume.
I don't see ALL engines being converted. The economics would not justify it past a percentage of use.
Heavier grades of petroleum could then be freed up for use as a manufacturing feedstock
Heavier grades of petroleum are not manufacturing feedstock. Plastics and the like are made from VERY light petroleum molecules, particularly ethane and propane into items like polyethylene and polypropylene. These are Natural Gas Liquids. (not to be confused with Liquid Natural Gas)
Natural Gas actually makes a lot of sense. It’s also safer in case of fire than the liquid gasoline. The leaking gas rises and burns, whereas gasoline and motor oils burn and leak beneath the car, and can form a growing pool underneath, which can spread to other cars. Plus, NG doesn’t have all the impurities when it burns that gasoline.
To displace heating oil with natural gas would require that there is a pipeline in front of your house. There is not one in front of mine and probably never will be.
Propane is more expensive than even fuel oil here in the northeast.
This has lead to many people adding wood stoves or pellet stoves in their residence. However, before adding an appliance like a pellet/wood stove, which are $2500-$5000 installed, you need to add as much insulation to your home as possible. This is where many older homes really are deficient. Even a home that was built in the 1980’s probably does not have enough insulation in its walls or ceilings.
Natural gas is also lighter than air. Therefore, unlike propane, which is heavier, it does not settle to the floor in the case of a leak and end up blowing up the whole building and everything around it.
OK, thanks.
On another point, coal is actually the least expensive energy product available today to heat your home other than cord wood if you cut it yourself(like me). Washed anthracite coal is cheaper than wood pellets, gas or oil. There are coal furnaces that are feed by hoppers that can be filled once every 3-4 days or longer. The other advantage of coal over wood pellets is that they can be stored outside. They can get wet. In fact they are wet in the bag to help eliminate the dust. Wood pellets need to be kept dry.
Which really gets funny why some people can’t see natural gas as a good thing. I mean really, why not even in the logic of a global warmist, convert methane into CO2, which is a less potent GHG than natural gas in terms of quantity of energy absorbed and in terms of more wavelengths, Earth’s got plenty of gas worth putting to use, even pockets of it inside ice.
I find it rediculous how many people don’t realize what anthracite actually is.
“Lodge got help from the Houston-Galveston Area Council, which issued a grant to cover the cost difference of the vehicles over the course of five years.”
Taxpayers put the money in Lodge’s pocket via a grant. Mr. Lodge is another pig slopping at the government trough, but he gets articles written about him and sits by the mayor at all the big meetings.
As usual in the greenie and alternate energy stories ...there is lots they don’t tell you.
Cheapest gasoline conversions is about $15k for new vehicles as they can only be done by EPA certified dealers and pass new emission tests. The older engines(carburetor) are/were much cheaper to convert....but they don’t make those anymore.
CNG just may work for local delivery/commute as long as you only have to drive 200 miles or less and return to base nightly to use you $15k-$35k refueling station that is needed per vehicle. You MIGHT be able to compress enough for 2 vehicles per night...but the faster you need it or the more vehicles you need it for the more expensive the compressors....OR you can buy on site storage tanks which are
1. dangerous
2. expensive
Compressing natural gas to 3,600psi takes lots of time and energy (electricity) for any appreciable amount. You also get into all kinds of moisture problems. Water in CNG will drive a hole thru a piston like a 50 caliber BMG.
Lastly.....think of a collision with a 3,600 psi tank a few feet away.
Just to get it in.....range is only 1/2 for a comparable sized vehicle...tank size being the limit...and the fact that CNG has only 40% of the btu of gasoline.
It won’t get much cheaper in larger production because the compressor and tank tech is all 100 years old (well settled with no innovations on the horizon) and materials required for the tanks and compressors both heavy and expensive.
All this is why the government has to subsidize CNG and has been for 30 years....with the price going up, not down.
The tanks in which it is stored are 3,000 psi, instead of the 250 psi for propane.
When they advertise these furnaces or stoves, there is never even a mention of the word COAL.
“Lodge got help from the Houston-Galveston Area Council, which issued a grant to cover the cost difference of the vehicles over the course of five years.”
Taxpayers put the money in Lodge’s pocket via a grant. Mr. Lodge is another pig slopping at the government trough, but he gets articles written about him and sits by the mayor at all the big meetings.
As usual in the greenie and alternate energy stories ...there is lots they don’t tell you.
Cheapest gasoline conversions is about $15k for new vehicles as they can only be done by EPA certified dealers and pass new emission tests. The older engines(carburetor) are/were much cheaper to convert....but they don’t make those anymore.
CNG just may work for local delivery/commute as long as you only have to drive 200 miles or less and return to base nightly to use you $15k-$35k refueling station that is needed per vehicle. You MIGHT be able to compress enough for 2 vehicles per night...but the faster you need it or the more vehicles you need it for the more expensive the compressors....OR you can buy on site storage tanks which are
1. dangerous
2. expensive
Compressing natural gas to 3,600psi takes lots of time and energy (electricity) for any appreciable amount. You also get into all kinds of moisture problems. Water in CNG will drive a hole thru a piston like a 50 caliber BMG.
Lastly.....think of a collision with a 3,600 psi tank a few feet away.
Just to get it in.....range is only 1/2 for a comparable sized vehicle...tank size being the limit...and the fact that CNG has only 40% of the btu of gasoline.
It won’t get much cheaper in larger production because the compressor and tank tech is all 100 years old (well settled with no innovations on the horizon) and materials required for the tanks and compressors both heavy and expensive.
All this is why the government has to subsidize CNG and has been for 30 years....with the price going up, not down.
The tanks in which it is stored are 3,000 psi, instead of the 250 psi for propane.
It is tough to justify the expense of converting an older (lower value) vehicle. But more manufactures are putting Nat Gas engines from the factory.
http://automobiles.honda.com/civic-natural-gas/
Trucks & Commercial Vans - RAM 2500 CNG
https://www.fleet.chrysler.com/FleetHome/Pages/Vehicle.aspx?BrandID=s500&FamilyID=s1&sid=1037056&KWNM=%2Bram+%2Bcng+%2Btruck&KWID=1431512326&TR=1&channel=paidsearch&gclid=CKfa3vTuwbwCFUHNOgodvnAAkA
But can you mix ethanol into it?
Nope.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.