on September 28, 2013 - 11:00 PM
As local companies grapple with high fuel costs, a small – but growing – number of businesses are aggressively pursuing compressed natural gas as an alternative.
Companies, like Waste Management and Try-It Distributing, are converting their fleets to take advantage of fuel that costs anywhere from a third to half as much as gasoline and diesel fuel.
And automakers are starting to offer more choices for consumers who also want to save at the pump.
But CNG still faces huge hurdles. Retrofitting a vehicle to CNG can cost up to $12,000, stretching the payback time and forcing energy-conscious consumers to bear sizable upfront costs. And CNG public fueling stations are rare, with just five in the Buffalo Niagara region, and six more on the way.
So a CNG vehicle isn’t for everyone. But interest is growing.
Try-It is buying a new fleet of 43 CNG-powered trucks, and a public fueling station is being built on its Lancaster site.
With the country’s abundant supply of natural gas, Jeff Gicewicz, vice president of corporate holdings at Try-It, believes CNG could relieve the nation’s reliance on foreign oil.
“It makes good economic sense long term. It’s a domestically available resource. We are very excited about it,” Gicewicz said.
In the past two years, Waste Management built a $3 million CNG filling station and spent $12 million to replace all 43 of its diesel trucks with CNG models. It’s the state’s first waste disposal company to convert its entire fleet to CNG. And the company plans to replace its entire fleet of 18,000 vehicles nationwide to CNG within the next five years.
“Use of CNG in Waste Management’s collection vehicles fleet significantly reduces our greenhouse gas and nitrogen oxides emissions compared to diesel trucks, and it’s a more cost-effective fuel,” said Eric Woods, the company’s vice president of fleet. “That’s why we’re converting our fleet to CNG.”
And earlier this year Cotton Drilling in Sheridan made the switch to CNG with new vehicles and built a public filling station. The business is already reporting a 50 percent drop in fueling costs.
“If you have a fleet of vehicles that use a good amount of fuel and the vehicles report back to a central location,” said Karen Merkel, a National Fuel Gas spokeswoman, “your company can achieve substantial savings over the long run by converting to natural gas.”
That’s because local compressed natural gas prices range from $1.24 to $1.99 per gasoline gallon equivalent, compared with $3.80 for unleaded gasoline and $4.14 for diesel.
“CNG’s fuel efficiency is about the same as gasoline, but it’s significantly cheaper,” said Craig Jackson, coordinator of Clean Communities of Western New York. “It’s cleaner burning at nearly half the price.”
But filling up with CNG takes some advance planning, because the fueling stations are few and far between.
The area currently has five public CNG filling stations, including two run by National Fuel, that can be used by companies and individuals with CNG vehicles, and as many as six more stations are planned for the near future.
“We have more public stations than most cities,” Jackson said “We’re fortunate and ahead of the curve.”
There currently are 605 public CNG stations around the country, a tiny sum compared to 168,000 gasoline retail outlets. Of the 14.8 million vehicles on America’s roads, about 112,000 – or less than 1 percent – run on natural gas, according to the U.S. Department of Energy.
Yet CNG is slowly making headroads. Since 2009, there has been an 11 percent increase each year in stations around the country, said Kathryn Clay, executive director of the Washington, D.C.-based Drive Natural Gas Initiative.
“In every market around the country, natural gas is such an attractive alternative,” Clay said. “Businesses would rather put money back in their businesses than in their fuel tanks.”
As a result, the majority of CNG-powered vehicles are fleets.
“Right now, the economics work best for fleet owners because of the volume of fuel used,” Merkel said. “However, the number of available public filling stations, and over time, the types of vehicles available for consumers, will continue to broaden and make CNGVs more attractive to individuals.”
Economics and environmental benefits are fueling the increase of CNG for transportation use in the area. The clean-burning fuel alternative has lower exhaust emissions, and it’s a cheaper than diesel and gasoline.
But the conversion to CNG is costly, and for it to make economic sense, requires public subsidies.
There are incentive programs through the New York State Energy Research and Development Agency offering assistance in feasibility studies, vouchers and grants to companies. National Fuel also offers buydowns between $10,000 to $200,000 to eligible businesses making the switch or building a station.
While local companies are joining the CNG movement, residents have been much slower to get onboard. While filling stations are multiplying, the current infrastructure is a long way from even approaching the apparatus in place for gasoline. And some of the existing filling stations are not open to the public.
Further, Honda is the only major automaker in the country with CNG-powered cars. And retrofitting a vehicle can range from $6,500 to $12,000.
But residents who’ve made the switch said the savings outweigh the inconvenience of a dearth of stations and the extra cost to buy their factory-built CNG Civics.
“It’s very inexpensive to drive it,” said Bob Reynolds, an Amherst resident who bought his car in 2008. “It’s $23 for the whole month of driving. It’s crazy cheap.”
This fall, Ford will unveil a CNG/gasoline F-150 pick-up truck, and other major automakers are working on light-duty vehicles.
“The CNG vehicles available on the market are more diverse now, and availability is significantly enhanced,” Merkel said. “It used to be that just heavy-duty vehicles for commercial usage were marketed, but now there are vehicles that are more recreationally based or consumer-geared are being made available.”
As individuals and companies jump on the CNG bandwagon, a “CNG market is emerging and growing rapidly,” said Jackson, who is also the business manager for Buffalo-based Cobey Energy, which now makes components for CNG stations.
Last week Cobey was awarded a contract to supply CNG equipment for new station in Millersburg, Ohio. And last year, Wendel Duchscherer Architects and Engineers was commissioned to design a station for the Greater Richmond Transporation Co. in Richmond, Va.