Why Compressed Natural Gas is the best Alternative Fuel for Corporate Fleets

Posted on June 2, 2010

Federal mandates for low-pollution vehicles like the pending NAT GAS Act (S. 1408) are encouraging company fleets to switch from fossil fuels to cleaner, domestically produced fuel sources. There is special emphasis on compressed natural gas (CNG ) for short-range mid-sized vehicles. Corporate fleets that convert their mid-sized cars, SUVs and limousines to CNG quickly will be able to reap a host of tax benefits and credits from the anticipated federal policies, making CNG the obvious choice over other alternative fuels that will not receive such healthy perks. In addition, many state and local agencies are offering programs to help offset the initial costs for CNG conversion. By combining federal tax incentives and rebates with local programs, corporate fleets that select CNG conversion over other ‘green’ fuel sources will see the most return on their investment.

Growing CNG Maintenance and Support

The California Natural Gas Vehicle Coalition issued a report showing that trucks and buses powered by natural gas cost no more to operate and maintain than their diesel and gasoline powered counterpart, especially because spark plugs are not fouled since CNG does not contain lead or benzene. The savings on fueling and maintaining CNG vehicles will continue to rise since new legislation anticipates up to 600,000 new jobs will be created to support the surge in natural gas demand for fleet vehicles. This means a flood of resources will hit the market in the coming years to support CNG technology as it becomes readily available nationwide. Companies like P.C. McKenzie already offer complete conversion kits that include on-site re-fueling stations.

Price of CNG

Natural gas has historically been priced lower than fossil fuels, and in 2010 the cost of U.S. commercial grade CNG averaged roughly 30 to 60 percent than gas or diesel. Also, federal motor fuel taxes do not currently apply to natural gas, although this may change as the market expands. Fuel efficiency for CNG vehicles show the bigger models like corporate fleet vehicles benefit the most from the conversion process because they can easily handle the weight that CNG tanks add to the vehicle. Typically, it takes 150 pounds of CNG to equal 5 gallons of gasoline, meaning a 15 mile range would add up to 500 pounds to the car and consume a lot of trunk space unless it is specifically designed to be a CNG vehicle. Consequently, the efficiency rating is only 5 to 15 percent over fossil fuel powered vehicles.

American Resources for CNG

The Center for American Progress (CAP) has released a report titled “Developing Natural Gas for Heavy Vehicles” that supports the economic premise of the NAT GAS Act, especially in light of the recent advances in horizontal drilling technology that can extract natural gas from shale. It is reported that the U.S. has a 200 year supply of natural gas that can lessen dependence on foreign oil.

EPA Considerations

The EPA is also supportive of the NAT GAS Act because CNG powered vehicles emit up to 25-30 percent less carbon that either diesel or gasoline powered engines. This factor will make CNG appealing to corporations that have mandates to reduce their carbon footprint. CNG is also considered effective in reducing nationwide air pollution, especially in urban areas that still exceed the EPA regulations established by the Clean Air Act. In addition, the American Clean Skies Foundation will support EPA programs encouraging rapid CNG conversion in major metropolitan centers — where most corporate fleet services operate — in anticipation of future federal, state and local mandates.

Safety Factors

Even though CNG tanks hold up to 3,600 pounds per square inch, it is a much safer fuel to deal with than gasoline or diesel, mainly because the ignition temperature is so high for CNG. It is also lighter than air, which means it will not ‘puddle’ like gasoline or leak into the ground. The storage systems used for CNG are much stronger than standard gasoline tanks found on current cars and trucks and much less likely to explode on impact.

Nationwide Availability

It is anticipated that federal incentives will be focused on creating a ‘natural gas corridor’ along major transportation routes. The American Trucking Association is promoting LNG for long range heavy duty vehicles because requires fewer fill-ups, but there would need to be a refueling network set up to support it nationwide, and such stations would also offer CNG pumps. Another aspect of this pending legislation is the manufacture of natural gas/electricity hybrids, and the American Public Gas Association (APGA), NGVAmerica, and Hybrid Kinetic Motors Corporation (HK Motors) have formed a business alliance to promote the mass production of natural gas powered electric hybrid cars to meet the expected deadlines. These vehicles can be used for long-range travel into areas where there are limited CNG stations.

Anticipated Federal Mandates

To achieve the goals set forth under the current and pending regulations, the CAP study has outlined the following procedures to institute CNG onto the market to meet the 10 year goad set by the pending NAT GAS legislation. Their projections were based on the DOE publication titled “Annual Energy Outlook 2010.”

1. Any new mid-range vehicles entering a fleet should be mandated to run on natural gas.
2. All classes of vehicles (heavy trucks, medium trucks, transit buses and school buses) will have independent natural gas conversion criteria and matching incentives.
3. New vehicle sales of mid range natural gas powered fleet vehicles should be at least one-third of the total production.
4. Approximately .5% of the existing gasoline and diesel powered fleet vehicles should be converted to natural gas.

In conclusion, corporate fleet owners who act quickly to institute CNG powered vehicles will reap the most benefits from the anticipated surge towards clean, economical natural gas. Support from federal, state and local agencies will be enhanced by a growing network of suppliers, technicians and mechanics. The price of CNG should also remain much more constant that petroleum based fuels in the future ‘green’ energy environment.

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