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Are Natural Gas Vehicles Right for Your Fleet?

A growing number of fleets have already made the switch to natural gas after weighing the benefits and challenges.

May 2011, Work Truck - Feature

by Sean Lyden - Also by this author

Verizon announced its order of 501 new 2011 Ford E-250 vans to be converted to CNG in October 2010.
Verizon announced its order of 501 new 2011 Ford E-250 vans to be converted to CNG in October 2010.

 

At a Glance
Be aware of the facts about compressed natural gas (CNG) before making the switch:
  • How CNG systems work.
  • Cost of CNG conversion.
  • Benefits of CNG from a business perspective.
  • Payback.
  • Limitations.
  • Best applications.
  • Future of CNG.
A growing number of businesses are transitioning their fleets to run on compressed natural gas (CNG) or liquefied natural gas (LNG) as alternatives to gasoline and diesel.

Delivery giant United Parcel Service (UPS), which began using natural gas vehicles (NGV) in 1989, now operates more than 1,300 CNG package delivery trucks in a dozen markets and recently announced it was adding another 48 LNG-powered tractors to its western freight fleet.

AT&T has deployed nearly 3,000 NGVs, comprised primarily of Ford E-250 vans upfitted to CNG at time of purchase, and more recently ordered 101 CNG Chevrolet Express cargo vans direct from GM. Through 2013, the telecom company anticipates purchasing up to 8,000 NGVs as part of its commitment to deploy 15,000 alternative-fuel vehicles throughout its fleet.

In October 2010, Verizon Wireless Inc. ordered 501 new Ford E-250 CNG vans in what company officials indicate is the first phase of what will be a multi-year deployment of NGVs.

Why are these and other businesses making the switch to NGVs?

"Corporate and government fleets are the strongest adopters of natural gas vehicles" said Dave Hurst, senior analyst for Pike Research, which recently published a report analyzing global clean technology markets. "More and more fleet managers are attracted to the lower fuel costs of natural gas, in addition to the opportunity to reduce their vehicles' carbon footprint."

Jerome Webber, senior vice president of AT&T Global Fleet Operations, agrees. "CNG vehicles provide a reduction in carbon emissions - by approximately 25 percent compared with our traditional gasoline vehicles. That supports our corporate commitment to reduce our impact on the environment. We also expect a decrease in our overall fuel costs, especially as gasoline prices continue to trend upwards. Historically, CNG is 30-40 percent cheaper than unleaded gasoline, so adding this many CNG vehicles to our fleet will have a positive impact both economically and environmentally."

Despite these advantages, NGVs' need for fueling infrastructure has hindered more widespread adoption. "NGVs are a good fit for fleets like UPS, AT&T, and Verizon because they have relatively high fuel use and are either return-to-base or repetitive route applications," said Stephe Yborra, director of market development at NGVAmerica. "Investments in fueling infrastructure, whether company-owned and operated or provided by a utility or independent fuel retailer, are driven by fuel use."

Yborra said that while the transit, airport, and refuse sectors account for more than 75 percent of vehicular natural gas use, there's been significant growth in work truck fleets applications, such as utilities, food and beverage distributors, textile rental services, and local-regional freight delivery companies. He noted that as more truck platforms become available to meet different fleets' needs, and the gap between natural gas and petroleum fuel prices grows, economics will drive additional investment in fueling infrastructure. "NGVs are not for everybody - yet," said Yborra. "Fleet operators need to weigh the benefits and challenges against their corporate goals."

"Our greatest challenge in deploying CNG vehicles continues to be the limited availability of public refueling facilities," said AT&T's Webber. "It's our hope that by applying our market size, we're also helping our nation's infrastructure. To help meet our needs, we've teamed with the DOE [Department of Energy] Clean Cities organizations across the nation to help match and time our deployments with public refueling infrastructure."

What is Vehicular Natural Gas?

Vehicular natural gas is the same "blue flame" gas that is used in factories, businesses, and homes for industrial processes, heating, water heating, cooking, and other domestic uses. Natural gas is comprised primarily of methane (CH4), an energy dense single carbon molecule that produces far fewer harmful emissions than either gasoline or diesel when combusted. While most natural gas used today is a fossil fuel extracted from deposits found deep within the earth, a growing amount of renewable natural gas produced from landfills, sewage plants and agricultural waste (referred to as bio-gas or bio-methane) is being utilized, including by some fleets.

Since nearly 98 percent of all natural gas used in the U.S. comes from North America, proponents argue that increased use, especially in the transportation sector which currently relies heavily on imported oil, is a viable path for the United States to achieve greater energy independence now and for the foreseeable future.

"The existing and growing U.S. reserves of well gas and bio-methane are more than enough to absorb tremendous growth in the transportation sector," said Yborra. "The 115,000 NGVs on U.S. roads today account for less than one-half of 1 percent of all U.S. natural gas use, so there's lots of room to grow." 

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