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Chevrolet has debuted its new compressed natural gas (CNG) bi-fuel 2015 Silverado 2500HD and 3500HD trucks, which offer a total driving range of up to 650 miles while maintaining strong horsepower and torque performance.

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As much of America gets gassed debating whether or not an electric car will outsell a hydrogen fuel cell car, truck owners stand by amused. It will be quite some time before any of these new technologies can deliver the power required by a truck. Nevertheless, change is under way in 2014. An American energy boom has driven natural gas prices down and offerings of bi-fuel trucks up. Here's a look at which compressed natural gas, or CNG, powered trucks are available this year.

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Pennsylvania-based Clinton County Solid Waste Authority has opened to the public its new compressed natural gas (CNG) refueling station, located at the Wayne Township Landfill in McElhattan, Pa.

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The significant and sustained lower relative cost of natural gas compared to petroleum-based fuels provides a strong incentive for fleets and individuals to shift to natural gas vehicles (NGVs). But those who seek to make such a switch face two significant obstacles: the higher up-front cost of NGVs and the lack of a comprehensive fueling infrastructure for either compressed natural gas (CNG) or liquefied natural gas (LNG).

Both the federal government and many state governments provide subsidies, tax incentives and loan programs to address these two obstacles. These public policies promote the use of NGVs (and other alternative fuel vehicles) by defraying their higher up-front costs and also support build-out of more natural gas fueling stations. Other policies provide incentives to use alternative fuel vehicles, such as the ability to use high-occupancy vehicle (HOV) lanes regardless of the number of passengers in a vehicle.

 

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By Jason Hall
November 21, 2013

Natural gas vehicles, at least in the U.S., haven't really been in demand for many years. The cheap gasoline (and diesel) that we have enjoyed for decades simply created a situation where there wasn't enough pain at the pump to drive any kind of demand of natural gas as a transportation fuel. However, the domestic cost of gas and diesel, largely driven by the international oil market, has risen considerably in the past half-decade, while the overall price of natural gas has stayed relatively low.

Domestic oil consumption has continued to decline, since peaking in 2006.

With this trend expected to continue as natural gas vehicles start to take market share in both commercial shipping and for private transportation, investment in production and infrastructure to support the growth in demand is ramping up. Does this create any opportunities for investors? Let's take a closer look.

Chicken or egg? Neither
It's only been in the past few years that expensive (by American standards) gas and diesel has created any sustained interest in natural gas vehicles. Add in what is shown above -- a trend of reduced consumption of oil that is also expected to continue -- and this has led companies like Royal Dutch Shell (NYSE: RDS-A ) and ExxonMobil (NYSE: XOM ) to step up their involvement in natural gas production and refueling in North America.

ExxonMobil is one of the largest companies in the world, a dominant player in oil and gas exploration, production, and sales to both consumers at retail and contract sales to fleets. One only has to look at its own website to see that natural gas is going to become a growing part of the company's future results:

For the next two decades, over half the growth in unconventional gas supply will be in North America, moving the U.S. energy mix toward a lower-carbon resource. This competitive energy supply provides a strong foundation for increasing economic output in the United States, opening up new and valuable opportunities in many regions and sectors of the U.S. economy...
ExxonMobil's domestic gas production also points at this: The company was the largest domestic producer of natural gas during the second quarter of 2013. Expect to see ExxonMobil continue to be active in this space.

Shell has been a big player in natural gas for years and is already one of the largest natural gas suppliers in the world. But the company isn't stopping at production. In April, Shell and TravelCenters of America (NYSE: TA ) announced plans to open LNG refueling lanes at "at least" 100 TA and Petro stations in major shipping corridors across North America.

This announcement followed two in March. The first announced plans for two liquefaction plants to provide LNG for heavy-duty land and marine vehicles in the Gulf Coast and Great Lakes regions. The second announced a collaboration between Shell and Volvo, which aims to "provide a complete solution to customers to help them convert to LNG as a fuel."

It's not just big oil

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Mokena, IL based Ozinga Brothers, which delivers concrete throughout the Chicago region and northern Indiana, plans to convert its entire fleet of 500 ready-mix trucks to run on CNG by 2020. The company will operate 112 CNG ready mixer trucks by year's end, up from 82 now, probably the largest fleet of CNG ready mixers in any fleet in the country today. Ozinga operates two ready mix truck configurations: front discharge Oshkosh tractors, and rear discharge Kenworth tractors. In their CNG configurations, both are outfitted with Cummins Westport's 8.9 liter ISL G engine. The company's fleet also includes 25 CNG fueled support vehicles.

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Fleets that register and operate medium- and heavy-duty vehicles in the state of Pennsylvania can now take advantage of the second round of a key grant initiative, announced over the weekend.

The Pennsylvania Department of Environmental Protection is administering these Act 13 Natural Gas Vehicle grants, and about $11 million will be issued through this funding round. The grants are financed through the impact fees that natural gas companies pay to the state.

 

The grants are designed specifically to help fleets defray the cost of acquiring a new NGV or performing an NGV conversion. Money is available for vehicles with a GVWR exceeding 14,000 lbs., and the awards are capped at $25,000 per vehicle (no more than 50% of the conversion cost or incremental cost of an OEM NGV).

Half of this funding round is being funneled exclusively to local transportation organizations, such as nonprofit public transportation agencies, port and redevelopment authorities, and school districts. The other 50% of the funding will be available to all other entities, including nonprofit organizations, private companies, state universities and municipalities.

Grant requests can be no more than 50 percent of the incremental purchase or retrofit cost per vehicle, with a maximum of $25,000 per vehicle.

Applications are due by 4 p.m. Eastern on Friday, Jan. 10, 2014. There will be a special webinar on Wednesday, Nov. 20, from 2 p.m. to 3 p.m. for interested parties to learn more about the grant solicitation.

More information is available from the PA DEP here:http://www.portal.state.pa.us/portal/server.pt/community/act_13/20789/natural_gas_vehicle_program/1157504

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The state Department of Environmental Protection announced $3 million in grants to fund natural gas vehicles today.

 

 

The Alternative Fuels Incentive Grant (AFIG) program was established in 1992 to fund a variety of alternative fuels- including compressed natural gas (CNG), liquefied natural gas (LNG), ethanol, hydrogen, and electricity.

Most of the projects awarded today are for CNG vehicles. A few were for propane, which is produced as a by-product of natural gas processing and crude oil refining.

"This funding makes it possible for many commercial, county and non-profit groups to convert their lighter-weight vehicles to natural gas or other alternative fuels," Acting Secretary Chris Abruzzo said in a statement.

This round of funding was targeted at fleets for businesses, nonprofits and municipalities, but the DEP says citizens can also apply for AFIG rebates of up to $3,000 on alternative fuel passenger vehicles.

Here's a list of all the projects and the amounts they received from the DEP:

Adams

Aero Energy, purchase of three and conversion of 10 commercial fuel delivery vehicles to operate on propane – $52,626

Allegheny

McCandless Township Sanitary Authority, conversion of five vehicles to operate on propane bi-fuel as an investigative demonstrative program to determine if propane can be a viable alternative to gasoline for use in municipal government fleets across Pennsylvania – $21,374

U.S. Steel Corporation, conversion of eight vehicles to CNG to be fueled by natural gas supplied from U.S. Steel's Irvin Plant CNG fueling station – $52,618

Armstrong

CWM Environmental, conversion of 10 vehicles to CNG bi-fuel utilizing EPA certified Auto Gas America kits – $50,975

Bradford
Consolidated Resource, purchase or convert five vehicles to CNG bi-fuel – $25,000

Bradford County Commissioners and Partners, purchase 14 CNG or CNG bi-fuel vehicles. Partners include Northern Tier Counseling, Bradco Supply Company, Hurley Supermarkets, Inc., M.R. Dirt, Inc., and the Dandy Mini Marts, Inc. – $70,020

Butler

Air Star Transportation, conversion of 35 vehicles to propane bi-fuel. Five of the vehicles are propane ADA-compliant wheelchair lift vans – $111,500

Cranberry Taxi, retrofit 25 new dedicated CNG vehicles to expand its para-transit services. CNG fuel systems to be installed by World CNG in Norristown, Montgomery County – $156,250

SWEPI, L.P. (subsidiary of Royal Dutch Shell) purchase 10 CNG bi-fuel vehicles, which will reduce gasoline fuel costs for the fleet by approximately $40,000 a year. SWEPI LP has natural gas exploration and production operations in Tioga County, and has been coordinating with the Tioga County Commissioners to support and advance additional natural gas filling stations – $55,000

Centre

Centre County Commissioners and Partners, purchase eight dedicated CNG and three CNG bi-fuel vehicles to serve para-transit, police and public works operations. Partners are: County Office of Transportation, Centre Area Transportation Authority, Ferguson and Patton townships – $70,146

Clarion

Redbank Chevrolet Partners, conversion of 37 vehicles to CNG. The partnership involves 20 local businesses under a coalition to support and take advantage of a growing local network of CNG fueling stations- $208,800

Francis J. Palo Partners, purchase 14 CNG vehicles and convert three vehicles to CNG, and convert two vehicles to propane as a part of an aggregation of fleet vehicles for four businesses in Clarion County – $118,750

Clearfield

Clearfield County Area Agency on Aging, conversion of four vehicles to CNG bi-fuel and purchase one dedicated CNG vehicle for use in the county's Meals on Wheels program, serving eligible residents of Clearfield County – $28,994

Columbia

Heller's Gas, purchase of 10 propane trucks, eight for bulk delivery of gas, and two rack trucks. This project will displace approximately 40,500 gallons of diesel fuel per year – $124,472

Crawford

Vantage Healthcare Network, purchase five propane vehicles to be used for delivery of linen and pharmacy service to multiple hospitals and nursing homes throughout western Pennsylvania – $29,889

Dauphin

Pennsylvania American Water Company, purchase 14 CNG bi-fuel vehicles to be used to maintain water service to customers – $62,800

Delaware

Keystone Quality Transport, conversion of 74 vehicles to CNG dual fuel, conversion of 73 vehicles to propane, and purchase eight propane vehicles as part of their program to retrofit their entire fleet of para-transit and ambulance vehicles – $248,000

Delaware Express Shuttle, purchase 15 CNG airport shuttle vehicles that will provide service to and from the Philadelphia airport and throughout Southeast Pennsylvania – $96,000

Greene

EMS Southwest, conversion of two wheelchair vans and four ambulances to propane with a service territory in the greater Greene County area – $24,600

Jefferson

O Ring CNG Fuel System and Partners, purchase 18 new CNG vehicles and convert six existing vehicles to CNG. Four local business partners include: O Ring CNG Fuel System, Snyder Brothers, Inc., 3M Transport, LLC, and Dedicated Delivery Service – $133,715

Lackawanna

L.T. Verrastro, Inc., purchase 20 CNG vans, trucks, and sport utility vehicles. LTV has recently initiated the installation of a CNG filling station at its own facility in Old Forge, Lackawanna County. LTV intends to allow local municipalities to access their CNG fill station, along with a structured public access – $135,461

Lancaster

City of Lancaster, purchase six CNG vehicles with the goal of improving the air quality in Lancaster County, as well as reducing the city's fuel costs – $29,950

Luzerne

DeAngelo Brothers, conversion of 43 light and medium-duty trucks from gasoline to propane – $153,000

Montgomery

King Limousine Service, purchase five CNG shuttles vans to provide passenger shuttle service throughout Southeast Pennsylvania – $32,488

VNG Company and Partners, purchase 32 CNG vehicles. Partner fleets include: Aqua PA, Comcast, and HB Electric Services. These vehicles will support the development of a new public CNG fueling station by VNG – $235,000

Asplundh Tree Expert Company, purchase seven CNG trucks for use in its tree trimming business. This project will displace approximately 14,000 gallons (GGE) of gasoline a year – $43,148

Philadelphia

Greater Philadelphia Clean Cities and Partners, purchase 50 propane school buses. Partners include: G. Davis, Inc. in Shohola, serving Pike, Luzerne and Wayne counties; North Pocono Bus Company, serving Lackawanna County; Norristown Area School District, serving Montgomery County, and Radnor Township School District, serving Delaware County – $250,000

Philadelphia Gas Works, purchase 50 CNG vehicles to demonstrate to PGW customers the financial viability of CNG as a fleet fuel – $240,000

Pike

Aqua Pennsylvania Inc., purchase nine CNG vans. This project intends to displace approximately 15,000 gallons of petroleum gasoline annually – $55,807

Washington

McKean Plumbing Heating and Supply Company, conversion of two vehicles to propane and purchase three propane delivery and service vehicles – $20,000

York

Shipley Energy Company York, retrofit 10 gasoline powered HVAC service vans to bi-fuel CNG and replace three service vans with three brand new dedicated CNG vehicles – $75,700

Shipley Energy Company Hanover, conversion of 10 service vehicles to propane bi-fuel – $35,000

Utztran Quality Foods, conversion of 10 delivery trucks to CNG. Each year, this project will displace approximately 14,860 gallons (GGE) of gasoline – $102,050

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By MIKE RAMSEY Oct. 29, 2013 6:37 p.m. ET
Operators of some of the largest U.S. truck fleets, including Lowe's Cos., Procter & Gamble Co. and United Parcel Service Inc., are accelerating a shift to natural gas fueled trucks, betting on new engine technology that promises to drop the cost of shifting from diesel fuel.

Home-improvement retailer Lowe's wants its delivery company to shift all of its several hundred trucks to natural gas by 2017. P&G already has 7% of its trucks on gas and could reach as much as 20% within two years. UPS says it plans to buy 1,000 natural gas trucks by the end of next year. FedEx Corp. plans to shift 30% of its long-distance trucks to natural gas over the next decade.
The nation's supply of relatively cheap
natural gas is helping spur this shift. So are new natural gas engines that can power heavy-duty trucks that weigh up to 80,000 pounds. The first, a 12-liter Cummins Westport Inc. natural gas engine went on sale in
July. Next year, Volvo AB, the Swedish heavy truck maker, will introduce a natural gas engine for its trucks.
Long-distance trucking companies, like Con-way Inc., Schneider National Inc., Swift Transportation Corp. and Werner Enterprises Inc.
are testing compressed natural gas and liquefied natural gas powered trucks as they awaiting more powerful engines and a nationwide fueling and repair infrastructure. Higher initial cost for vehicles, scant natural-gas vehicle suppliers and fuel availability have been impediments.
The take up is just starting: About 5% of all heavy duty trucks sold next year will run on natural gas, up from around 1% this year, according to industry projections. Barriers to wider use are coming down, driven by the relatively low cost of compressed natural gas, or CNG, which sells for about $1.50 less a gallon than its equivalent in diesel fuel, which averaged about $3.87 a gallon this week.
A shift to natural gas for trucking has implications for the U.S. consumption of oil, domestic energy industry and air quality. Natural gas produces less carbon dioxide, carbon monoxide and sulfur-based pollution than diesel or gasoline per mile driven.
The average heavy truck consumes as much fuel as 40 sedans in a year. Such vehicles make up just 1% of the U.S. vehicle fleet, but consume 20% of the fuel, according to
Jim Arthurs, the president of Cummins  Westport, a joint-venture of engine makers Cummins Inc. and Westport Innovations Inc. Diesel-engine trucks get between 5 miles a gallon and 7 mpg and average 100,000 miles a year.
"Within five years, 30% of our fleet could be natural gas," said Ike Brown, president of logistics and trucking company, NFI Intermodal, which provides deliveries to Lowe's in Texas and has some 2,200-trucks in its fleet.
"It's cleaner than the average truck running today," said Steve Palmer, vice president of transportation for the Mooresville, N.C.-based Lowe's. "It's a long-term play that could save a lot of money." The retailer plans to have 100% of its fleet on natural gas by 2017. "And I do believe the 12-liter engine was the inflection point," Mr. Palmer said.
Some other classes of commercial trucks have made rapid shifts to natural gas. This year about 60% of all new garbage trucks purchased use natural gas. Those trucks mostly use a smaller 8.9-liter engine that has been available for several years.
Waste Management Inc.,the largest garbage company in the U.S., has converted about 15% of its 22,000-truck fleet to natural gas. About 90% of its future purchases will be natural gas fueled, helping it save between $15,000 and $20,000 a year per vehicle, a two-year payoff for the more expensive truck.
"It would be a big gamble to flip to" natural gas "if we thought it was going to flip back to diesel being cheaper," said Waste Management's Chief Executive David Steiner. "But as far out as we can see, we think you are going to have lower gas prices and higher diesel prices."
Right now, the expansion into natural gas is inhibited by the scant number of fueling stations and the time required to refill gas tanks. For example, Lowe's has asked NFI Intermodal to start using natural gas powered vehicles to serve its stores in Pennsylvania, but it has to wait for a fueling network to be built.
Private fleets typically operate on regional or local routes, allowing them to refuel at their operators' terminals and garages rather than depending on highway fueling stations. Refilling a compressed natural gas vehicle can take all night with low-pressure compressors or as little as 10 or 15 minutes for a 40 gallon tank using high-pressure "fast-fill" stations. Fast-fill gas is less dense and doesn't allow for as much range on a single tank.
PepsiCo plans to have three natural gas fueling stations in operation by the end of this year and has said it would build seven more. It is also expanding its fleet of natural gas vehicles to 208 which, when it announced that move in June, said it would be "one of the largest compressed natural gas fleets in the U.S."
For many private fleet operators, said Glen Kedzie, vice president and energy and environmental counsel of the American Trucking Associations, "it's a competitive advantage." Over the last two years, he said, truck stop players like Knoxville, Tenn.- based Pilot Flying J and Clean Energy Fuels Corp have been building the infrastructure for trucks to fuel with natural gas.
The cost of the natural gas trucks is still an issue. CNG trucks cost between $40,000 and $50,000 more than a diesel truck, which costs about $120,000, primarily because of the large carbon-fiber fuel tanks required to store CNG or liquefied natural gas. In large fleets, that premium could add millions of dollars to equipment cost.
Still, trucking companies see longer term benefits. Ryder Systems Inc., one of the largest buyers of trucks in the U.S., is quickly adding natural gas to its 50,000-truck fleet, but just how fast it will grow depends on how much truck prices come down and how fast fueling stations pop up, said Scott Perry, vice president of supply management, for Miami-based Ryder.
"I think 10% to 20% is realistic," within five years. "But we still have to see about all the variables."
Clean Energy Fuels, the largest natural gas fueling station company, is working on both the infrastructure and the vehicle cost problems. The Irving, Texas-based company, founded by oil man T. Boone Pickens, has more than 400 fueling stations and is building a network across the country. Recently the company offered a deal through General Electric Co's leasing arm that allow trucking companies to lease a new vehicle for the same price as a diesel if they agree to a fuel contract.
"This is just one of the last barriers," said the president of the company, Andrew Littlefair. "Now they can start saving money immediately."
Mr. Arthurs, the president Cummins Westport, thinks the price of the trucks could come down quickly. There are only a handful of fuel tank makers, but they are expanding capacity and recently St. Paul, Minn.-based 3M got into the business, adding a major manufacturer to the supply chain.
Internal combustion and diesel engines can be converted to natural gas relatively easily. The engines work the same, but require modifications because of the lack of lubrication from the fuel itself.
"It has a very strong value proposition for us," said Mr. Peters, whose fleet at Ryder leases out or operates about 50,000 heavy trucks. "The unknowns are the technology platforms, the engine platforms, the fueling infrastructure, inefficiencies. But it is resonating very strongly."
—Bob Tita and Betsy Morris contributed to this article. Write to Mike Ramsey at This email address is being protected from spambots. You need JavaScript enabled to view it.

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AT&T says it has placed over 7,500 alternative fuel vehicles in 44 states nationwide, reaching the halfway mark of its commitment to invest up to $565 million to deploy close to 15,000 alternative fuel vehicles by 2018.

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Oct 25, 2013 (Menafn - M2 EQUITYBITES via COMTEX) --Ryder System Inc R, a commercial transportation and supply chain management solutions company, disclosed on Thursday that Saddle Creek Logistics Services (Saddle Creek) signed an agreement with the company for a natural gas vehicle solution, in two markets.

 

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Trucking fleets are converting in droves from diesel fuel to natural gas, said John Hausladen, CEO of the Minnesota Trucking Association, which hosts a related summit Thursday at the Earle Brown Heritage Center in Brooklyn Center.

Natural gas is plentiful, up to $2 cheaper per gallon than diesel fuel and manufacturers are collaborating on heavy-duty engines that can power big rigs, Hausladen said.

"New natural gas engines are more expensive but the difference in price can be paid back in a couple of years or less," he said. "We're seeing the fueling network being built out."

Moreover, it's cleaner-burning and cuts carbon-dioxide and other emissions.

Thursday's meeting will include experts from Kwik Trip, Dart Transit, natural-gas distributor Clean Energy Fuels, engine manufacturer Cummins Westport and truck makers Volvo and Daimler.

Convenience store chain Kwik Trip, which has converted 50 of its 350 light-duty and semitrailer trucks to compressed natural gas (CNG) and liquefied natural gas (LNG), has added natural gas pumps at 17 of its 430 fueling stations in Minnesota, Wisconsin and Iowa. More are on the way.

Joel Hirschboeck, superintendent of alternative fuels at Kwik Trip, said the company has ordered 35 new semitrailer trucks that will run on natural gas.

"We're no longer purchasing diesel-fueled trucks, and we're transitioning our fleet to natural gas," he said. "Its cost and environmental benefits ... natural gas is a domestic, cleaner-burning fuel."

Recently, Phoenix-based Republic Services added 23 CNG solid waste and recycling trucks to its Twin Cities fleet, replacing older, diesel-powered trucks.

Republic, which also installed a local natural gas fueling station, projects that each new CNG-fueled truck reduces ozone-forming emissions by as much as 80 percent when compared to older diesel-powered trucks. Republic operates a fleet of more than 1,400 CNG vehicles and 26 natural gas fueling stations nationwide.

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Leon County Schools is entering phase three of its implementation of CNG after completing a new bus maintenance facility over the summer. More than a quarter of the fleet now operates on the alternative fuel.

 

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