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Natural Gas Plentiful; Fueling Stations Are Not
YOUNGSTOWN, Ohio -- By the end of 2013, the Stark Area Regional Transit Authority in Canton will have 50 vehicles in its fleet that operate on compressed natural gas, said its executive director, Kirt Conrad.
The fleet of 85 buses, which includes nine CNG vehicles, will have 23 more CNG buses by the end of summer, Conrad says. To fuel them, the transit authority invested in a $1.5 million to build CNG stations.
“We have built and opened northern Ohio’s first public-private compressed natural gas fueling facility,” Conrad said. “It just opened -- literally -- this month.”
The cost savings to switching from diesel should make up the cost in five years, he says.
Sarta switched to a CNG fleet because not only is compressed natural gas far less expensive -- one-third the price of diesel -- it’s produced domestically.
The price of a new CNG bus is about 10% higher than a comparable diesel vehicle, but fuel costs are lower and mileage is better, Conrad said.
“They actually have better fuel mileage than a diesel [model] does of the same year, so we’re seeing a better fuel economy,” he explained.
The main push for CNG vehicles, however, comes from environmental concerns -- burning natural gas is less harmful to the environment than other fuels.
“It has about 70% less [nitrous oxide] emissions and 50% less carbon dioxide emissions, so there’s a lot [fewer] emission issues there. It’s cleaner for the environment,” Conrad said.
Conrad spoke Tuesday at Youngstown State University at the first of three seminars on bus fleets converting to natural gas. The Tech Belt Energy Innovation Center, Warren, is sponsoring the series.
The seminar also hosted a panel of speakers made up of Dave Mrowzinski, CNG program manager at IGS Energy; Charlie Reidl, market development manager at Chesapeake Energy Corp.; Brad Couch, CNG business development at Ariel Corp.; and Jerry Hutton, director of gaseous fuels transportation partnership at Clean Fuels Ohio.
The panel answered questions from an audience of 36 about the cost of converting to natural gas vehicles, their strengths and weaknesses, and CNG filling stations. The audience consisted of officeholders and fleet operators.
The cost of one fueling unit can range from $5,000 for a unit that could be installed in a residential garage to $60,000, said Mrowzinski of IGS Energy.
IGS, a natural gas and electric energy commodity supplier, recently entered the market of CNG vehicle refueling appliances for public and private use.
“Installation of a natural gas station can be quite expensive,” Mrowzinski said. “There are big capital cost challenges to create a station. Typically, natural gas vehicle fast-fill refueling stations can be anywhere from $500,000 to $2 million, and there are definite economies of scale with larger stations.”
Although there is a large difference between the $1 million and $2 million filling stations, the daily profit from the more expensive station can be as much as five times greater.
“Aggregating demand, not just on one business alone, but from an entire city or multiple businesses joining together to give demand to a station owner, can be quite advantageous to bringing down your overall cost,” Mrowzinski said.
There are two types of station equipment in the natural gas vehicle industry: time-fill and fast-fill, he explained.
With fast-fill stations, the gas is pre-compressed and equalizes into the vehicle tank at the same rate it takes to fill a diesel- or gasoline-powered vehicle. With time-fill, it takes longer, and the vehicle is usually left overnight.
The larger the fleet, the more likely fast-fill is the better option. Time-fill could prove the better option at bus stations where the vehicles are left overnight, such as schools.
The reason TBEIC chose fleet conversion for the seminars is that fleet vehicles on average travel four times as far as a personal vehicle in a given year.
“Typically fleets will be the first movers in natural gas vehicles primarily because of the upfront cost barriers,” Mrowzinski said.
Couch explained getting the country to switch over to natural gas vehicles is a “chicken or the egg” situation. Automakers hesitate to manufacture such vehicles because it’s difficult to market a vehicle that has few places to refuel, but no one will build such a fueling station because automakers aren’t making the cars.
Copyright 2012 The Business Journal, Youngstown, Ohio.