Compressed natural gas gets new life as alternative fuel

Compressed natural gas is seeing signs of life in St. Louis, more than a decade after the alternative fuel for cars, trucks and buses made its debut here.

The move reflects a broader push by companies, including UPS, AT&T and Verizon, and municipal bodies nationwide to seek a cheaper and more environmentally friendly alternative to gasoline and diesel.

Increased demand now is prompting several automakers, including General Motors and Ford, to roll out vehicles that can be converted to run on compressed natural gas — or CNG — primarily for commercial use.

The renewed interest may even draw a local investment from Texas billionaire T. Boone Pickens, an outspoken advocate for the alternative fuel.

The company he co-founded, Clean Energy Fuels Corp., is in negotiations with a convenience store operator to open a compressed natural gas (CNG) fuel station at location in Bridgeton within the next 12 months.

The dispenser would be the region’s first public CNG station that’s open 24 hours a day. Clean Energy has 273 CNG fueling stations across the country – although none yet in Missouri – and estimates there are about 1,100 total CNG stations, both public and nonpublic, nationwide.

The development of a 24-hour-a-day public fuel station comes as the St. Louis region is poised to get an influx of new vans powered by natural gas on area roadways.

Last month, AT&T ordered 1,200 compressed natural gas cargo vans, marking General Motors’ largest order to date of the alternative fuel vehicles the automaker began producing in 2010. Since production began, GM has sold 3,000 CNG vans.

The Chevrolet Express vans AT&T ordered are being assembled at GM’s plant in Wentzville, giving a boost to the plant that added a second shift last month after more than two years as a single-shift facility.

“Right now, (CNG vans) are a small percentage of what we produce, but we expect that to grow,” said John Dansby GM’s plant manager in Wentzville.

From Wentzville, the vans travel to a supplier, Impco Automotive, in Union City, Ind., where the CNG fuel systems are installed.

“Our anticipation is that as long as there’s uncertainty in the price of gasoline, that continues to drive a strong interest in compressed natural gas because there’s consistency in price,” said Mike Jones, product manager for GM’s fleet and commercial operations.

The CNG option adds about $14,000 to the cost of each Chevrolet Express van, but for commercial fleets that spend a lot of time on the roads, the investment pays off, said Jerome Webber, AT&T’s vice president of global fleet operations, an AT&T unit that’s based in St. Louis.

At the St. Louis region’s only existing public CNG fueling station – located at a Laclede Gas facility in Shrewsbury – a gallon equivalent of compressed natural gas costs $1.89 versus more than $3 for a gallon of gasoline. The pump is only open to the public from 6:30 a.m. to 6 p.m., Monday through Friday.

A majority of the pump’s users are fleet customers, such as AT&T and Laclede’s own service vehicles. Some companies have contracted with Laclede to use the fuel station after hours.

AT&T began exploring alternative fuels in 2007 for its 70,000 vehicles deployed in the U.S. as alternative fuel options and availability of refueling stations began to increase. The four CNG vehicles the company initially tested matched the fuel economy and reliability of gasoline or diesel options, and cost at least 30 percent less to fuel.

“There wasn’t a loss of fuel economy that you see with other ‘green’ vehicles like ethanol,” Webber said.

AT&T is on track to add up to 8,000 CNG vehicles to its fleet through next year, at a cost of $350 million. When the company began adding CNG vehicles to its fleet, 70 percent went to California, which has a wide network of CNG fueling stations. Now, with more fueling stations popping up, like in St. Louis, more than half of AT&T’s CNG vehicles are outside of California.

With its latest order from GM, 46 of the 1,200 vehicles will be used by AT&T in Missouri, adding to its existing fleet of more than 200 alternative fuel vehicles in the state.

In addition to cost benefits, AT&T says reducing fleet-based carbon emissions is driving its push for CNG vehicles. Vans fueled by compressed natural gas can produce 25 percent fewer carbon dioxide emissions than their gasoline or diesel-powered counterparts, GM says, citing U.S. Environmental Protection Agency data.

Speed bumps

The recent developments represent a dramatic turnabout for this fuel, both nationally and locally.

When Laclede Gas opened a CNG station for public use at a Shell station at Interstate 44 and Hampton in 1997, it was seldom used.

“That was a ‘build it, and they will come’ philosophy,” said Richard Ockers, project engineer with Laclede Gas. “Well, we built it, and they didn’t come. It can be a difficult sell to have to adapt to new technology.”

Laclede’s CNG equipment was moved in 2004 to its current spot in Shrewsbury because of underutilization.

“Laclede Gas knew the technology worked, and we decided instead of scrapping the equipment to move it to our own facility,” Ockers said.

Also in the 1990s, St. Louis’ public transportation system operator, Metro, made a sizable investment in CNG buses, spending more than $11 million to buy 37 CNG buses with plans to buy more.

However, the buses broke down more easily than their gasoline-fueled counterparts and needed to be refueled more often. Metro has since phased out its use of CNG vehicles, said Metro spokeswoman Dianne Williams.

The alternative fuel also saw a setback last year when Wentzville city officials abandoned a plan years in the making to build a natural gas refueling station, citing high costs.

But as the technology has improved, use of CNG for commercial vehicles has grown across the country over the past decade, primarily for bus and shuttle fleets. Los Angeles’ transit system added 95 CNG buses to its fleet in December, funded in part by federal grants.

Some local fleet operators are convinced of the value of compressed natural gas, including the St. Louis Airport Authority, which first began using a CNG vehicle in 1998. Since then, the authority’s CNG fleet has grown to 120 vehicles, including nearly 40 Super Park shuttles.

The authority refuels its fleet at a nonpublic CNG station that has four dispensers on a corner of the Cypress parking lot near Lambert-St. Louis International Airport. The authority also has a second CNG fueling station on airport property.

“I am replacing as many as I can with CNG,” said Mike Bernich, fleet manager at Lambert, who said the shuttles powered by CNG match the reliability of gasoline or diesel vehicles.

The authority saved $700,000 in fuel costs last year by using CNG instead of gasoline or diesel, according to an estimate by Thomas Schultz, manager of utilization engineering for Laclede Gas.

Clean Energy hopes the authority’s interest will spread to other businesses that serve the airport. The company has fueling centers near 26 U.S. airports, and St. Louis’ size and number of CNG vehicles in use made it a good fit for a new fuel center, said Ken Nicholson, Clean Energy’s vice president for the central region.

Kevin Herdler, executive director of the St. Louis Regional Clean Cities, a U.S. Department of Energy-sponsored initiative that works to reduce petroleum use in transportation, said the low prices and ample supply of natural gas – there’s at least a 100-year domestic supply — should keep costs down for the foreseeable future.

“There’s so much abundance of natural gas, it’s going to stay well below what gasoline sells for,” Herdler said. “It doesn’t take long to see the benefits, not only on the air quality, but also on the bottom line for these companies that use compressed natural gas.”

This article was first published by STL Today.

Read more: http://www.stltoday.com/business/local/compressed-natural-gas-gets-new-life-as-alternative-fuel/article_d800b0d2-5354-11e1-b476-0019bb30f31a.html#ixzz1mIqSIzJE

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