Also known as liquefied petroleum gas (LPG), propane autogas is the world’s third most common vehicular fuel, behind gasoline and diesel, powering more than 15 million vehicles globally. That number is expected to reach 23 million by 2020, according to Pike Research, a part of Navigant, with growth driven by lower fuel prices relative to gasoline and an expanding fueling infrastructure.
However, with a $4,000 to $12,000 investment to convert vehicles to run on either dedicated propane autogas or bi-fuel systems, is there a sufficient business case for fleets to switch to the alternative fuel?
Green Fleet spoke with representatives from several organizations that have made the switch to
GO Riteway Transportation Group
● Sector: Transportation.
● Total fleet: 683.
● Total propane-autogas vehicles: 36 airport shuttle vans and school buses.
● Overview: GO Riteway Transportation Group is a ground transportation company that employs 900 people and operates out of 13 locations in Wisconsin, with a fleet of 683 vehicles, including school buses, motor coaches, shuttle coaches, limousines, executive sedans, and vans. Since starting its propane-autogas initiative in November 2011, the company has converted 31 Ford E-350 airport shuttle vans and five school buses to operate on propane autogas.
● Reason for switch: “Overall, there’s a cost savings involved,” said Jason Ebert, fleet facilities manager, GO Riteway Transportation Group. “When we converted our vehicles from gasoline to propane autogas, most of the cost savings was achieved from the cost of the propane autogas itself. We pay roughly half [per gallon] what a consumer pays for gasoline. When you factor in that you’re only losing about 10-15 percent on efficiency (with propane autogas), you’re gaining about a net 35-percent lower cost per mile.”
While GO Riteway has purchased a few hybrid-electric buses, Ebert said current hybrid technology is too cost-prohibitive to achieve a payback within a reasonable amount of time, compared to propane autogas. “We’re getting 10- to 12-percent better fuel economy [compared to diesel] with our hybrid-electric buses, but we’re paying twice as much for the bus. So, the payback is not there when you’re talking about hybrid electric at this point.”
The company also considered compressed natural gas (CNG), however, the fuel tank for CNG would take up too much cargo space, compared to the propane-autogas tank, Ebert said. “CNG is only about 30 percent as efficient as gasoline, but the same volume of propane autogas is 90 percent as efficient [as gasoline]. It allows us to maintain our cargo space, without sacrificing fuel range of the vehicle as we would have to do with CNG.”
● Results: “With our shuttles getting 100,000 miles per year, we’re looking at a year to a year-and-a-half turnaround on our investment,” Ebert said. “In terms of power, our drivers can’t tell the difference between propane autogas and gasoline.”
● Impact on operations: “We were concerned that, since propane autogas burns hotter than gasoline, we would have shorter oil change cycles. But, we did an oil change analysis and found that we could extend our oil change interval by 1,000 miles over gasoline by using propane autogas because it also burns cleaner than gasoline,” Ebert said.
● Challenges: “You can’t just go to any auto parts store or dealership to buy parts for your propane-autogas fuel system,” Ebert noted. “The turnaround time [for replacement propane-autogas parts] can take three to five business days, whereas I can get parts for gasoline systems by noon same day. As more companies buy propane-autogas conversion kits and the market expands, this should help with parts availability.”
● Future plans: “I think we’re going to keep expanding. I think it makes sense, especially with the fast turnaround we’re getting in terms of payback,” Ebert said. “We’ll likely expand [propane autogas] use in our sedan and limousine service, which is housed in the same facility our airport shuttle service is based, onsite with our fueling station. The issue has been that there aren’t [conversion] kits available that are dedicated propane autogas-only for those vehicles we use for our limousine and sedan services.”
Lake Michigan Mailers
● Sector: Marketing.
● Total fleet: 30.
● Total propane-autogas vehicles: Out of 30 vehicles, 6 of the ½-ton vans.
● Overview: Lake Michigan Mailers offers a full-range of document management, digital marketing, and distribution services with offices in Kalamazoo, Mich., and South Bend, Ind. The company began converting its fleet of Ford E-150 delivery vans to propane autogas in June 2012.
● Reason for switch: “We didn’t start out looking to switch to propane autogas,” recalled David Rhoa, president of Lake Michigan Mailers. “We started by asking the question, ‘Would an all-electric vehicle work for us?’ That question broadened to include the possibility of using other alternative fuels. When we brought in an outside consultant to review our fuel and fleet use, they were charged with finding the best alternative fuels for our operation. It was not until after we studied the issue that it became clear that propane autogas was the alternative to gasoline that gave us the fastest return on investment.
● Results: “We’ve only been actively using propane autogas since June 2012, however, our experience has been very positive across all measurable metrics,” Rhoa said, noting a $0.121 fuel savings per mile driven. “We expect each vehicle to have between a one-year and 1.3-year payback, and all indications are that we are on pace to hit those [return on investment] goals.”
● Challenges: “We really haven’t experienced any challenges or limitations related to propane autogas itself,” Rhoa said. “Our biggest challenge was when we started investigating the possibility of using propane autogas — to find relevant information regarding propane autogas for small- to medium-sized fleets. All the information that was available to us was regarding large fleets such as UPS, FedEx, or Frito-Lay.”
● Future plans: “We expect to have 22 of our 30 vehicles running on a bi-fuel propane autogas platform by Q4 of 2014,” Rhoa said.
Badger Cab Company
● Sector: Transportation and taxi service.
● Total fleet: 45.
● Total propane-autogas vehicles: All 45 four-door sedans.
● Overview: Shortly after the sale of Madison, Wis.-based Badger Cab Company to its present owner in 1978, gasoline prices had nearly tripled due to the national fuel crisis, compelling the company to evaluate alternative fuels as a means to continue fulfilling its mission of “providing low-priced transportation.” By 1981, Badger Cab had converted its entire sedan fleet to run on propane autogas.
● Reason for switch: “We found the conversion to propane autogas was relatively easily done and for lower cost than other alternatives,” said Bob Frick, sales manager, Badger Cab Company. “Also, we can stock propane autogas with relative ease, and it is more available at public fueling stations than other gasoline alternatives.”
Frick said the company considered CNG because of the low price of the fuel, but the fueling speed of CNG was a concern. “The fueling process with propane autogas is fast, very comparable to fueling with gasoline,” Frick said. “CNG has a longer fueling time, which would not work well in our environment because all of our drivers fuel the vehicles prior to beginning a shift and several times during their shift.”
● Results: “Propane autogas has made financial sense for us because, historically, the cost of a gallon of propane autogas has ranged from one-third to about one-half that of gasoline,” Frick said. “Also, the logistics of managing fueling, conversion, and running vehicles on propane autogas don’t require additional man-hours or extensive training. And, since propane autogas burns cleaner than gasoline, we’re conserving environmental resources. So, using propane autogas is not only good for our business, it’s good for the environment.”
● Challenges: “We do experience perhaps slightly lower fuel mileage — that is, very slightly. However, we do consider that taxis are mostly city driving in stop-and-go conditions, which are perhaps the worst conditions for fuel economy,” Frick said.
“In some cases, engine diagnostics can be challenging, such as determining whether the problem is propane-autogas related or caused by another issue,” Frick said. “From our perspective, if we do get calls that take us far out of town, beyond the fuel range of the vehicle, clearly we are somewhat limited as to where we can obtain fuel. For a fleet operation that works largely in a localized area, propane autogas is ideal.”
● Future plans: “Being responsible stewards of our business, we’re constantly looking at the best ways to conserve resources,” Frick said. “Propane autogas fueling remains the best fuel alternative for us now — and at least several years into the future. However, circumstances caused us to change [from gasoline to propane autogas] initially, and it’s conceivable that could occur again.”