Winning big with alternative fuel vehicles.
As a number of alternatives to fuel efficiency are now available to reduce reliance on foreign petroleum, stretch fuel dollars and better protect the air, many in businesses, school systems and government agencies have already begun using propane autogas to fuel vehicles, saving thousands of taxpayer dollars a year in fuel charges and maintenance costs while also reducing greenhouse gas emissions.
The Alabama Department of Corrections (ADOC), one state agency using alternative means for conserving fuel and lowering costs, considered these alternative fuels for their 15-passenger vans--which are used to carry work-release inmates to and from their respective locations--that average 5,000 miles per month at an annual cost of $1.3 million.
After investigating several options, ADOC launched a pilot alternative fuel project in 2014 to find the most beneficial transportation options for their facilities. They began by purchasing 10 vans and converting them with bi-fuel kits, so they could run on either gasoline or propane autogas and, through an existing state contract, a 2,000-gallon propane refueling station was also acquired.
With two years of performance data collected, the vans logged more than 1.4 million miles on propane with no significant equipment or maintenance issues. And despite a decline in gasoline prices, ADOC is realizing considerable cost savings while protecting the environment in the process. When fueled by propane, the vans post an 8.6-cents-per-mile advantage in operational fuel costs, compared to the same vans operated on gasoline. In addition, more than 70 metric tons of greenhouse gas emissions equivalent to carbon dioxide have been avoided.
Since launching the program, each van has proved an annual cost savings of $6,600, which is equivalent to 90 percent of conversion cost. The savings exclude rebates from the Alternative Fuels Excise Tax Credit that Congress renewed in December 2015. A 36-cents-per-gallon refund or credit is available for all propane autogas utilized in 2016. Inclusion of the tax credit boosts the observed savings differential to more than 12 cents per mile.
Given the positive results of the pilot program, ADOC has expanded its propane-fueled fleet to more than 60 vans as well as five additional refueling stations. In 2016, ADOC expects the propane-fueled vans to save the department over $300,000 in fuel costs alone, also leading to lower maintenance costs from a cleaner burning fuel.
Is Propane the Best Option as an Alternative Fuel?
During the pilot program, propane proved to be an ideal fit for ADOC, given the relatively small concentrations of high-use vans located at correctional institutions around the state. In situations where there are high concentrations of medium- to high-use vehicles, natural gas may be a better solution as an alternative fuel for price reasons. In terms of gasoline gallon equivalents, the cost of natural gas is generally lower than propane, but a rapid-fill, natural-gas refueling infrastructure can cost 10 to 50 times that of a propane infrastructure.
Thus, the capacity of the infrastructure should be sized based on the following: the number of vehicles the infrastructure is intended to support, the vehicles' periodic fuel consumption and whether propane is used as a fuel alternative. Consideration also should be given to the frequency at which a distributor is able to refill the refueling stations. The average investment to install a skid-mounted, 1,000-gallon propane autogas tank with dispenser is about $30,000.
Manufactures offer alternative fuels, such as propane and natural gas, on a variety of vehicle models. These vehicles are typically "dedicated" or limited operating only on the designated fuel type. Nevertheless, dedicated and bi-fuel aftermarket conversion kits are available for most vehicle engines. Installation costs for these kits generally range from $6,000 to $10,000. But those installed on newer vehicles should be EPA-certified to protect the vehicle's engine warranty.
Installers of alternative fuel conversion kits should be carefully vetted and disclose customer references for prior work. Additionally, alternative-fuel systems may negatively impact the resale value of some vehicle models; therefore, the vehicle's useful life cycle and eventual disposition should be considered. However, many components of aftermarket conversion kits can be transferred to new vehicles to thereby reduce conversion cost.
Depending on projected usage, a distributor may be willing to provide a propane refueling station at either no cost, or at a slight markup per gallon delivered. The threshold for the ADOC propane refueling stations on loan from a distributor is 25,000 gallons annually. Incentives are also available through federal programs for purchasing and installing alternative refueling infrastructures. Subsidies or tax credits for these provide up to 30 percent of the infrastructure cost, capped at $30,000.
Resources for the Program
The success of the propane-fuel project at ADOC relied primarily on a low concentration of high-use vans, and propane fuel being obtainable through an existing state contract at a discounted price. There are excellent online sources that provide in-depth assessments and analysis for alternative fuels.
The U.S. Department of Energy's Clean Cities website, www.cleancities.energy.gov, highlights partnership opportunities with local Clean Fuels or Clean Cities Coalitions. A list of alternative fuels and types of vehicles with factory-equipped alternative fuel systems are listed on the U.S. Department of Energy's Alternative Fuels Data Center website at www.afdc. energy.gov. The Propane Education and Research Council is another excellent source for information on propane autogas and alternative fuel infrastructure. Its website address is www.propanecouncil.org.
In Alabama, the ADOC alternative fuel project is a "win-win" for the department, state taxpayers and environment.
By Dr. Andrew Farquhar
Andrew Farquhar, Ph D., is retired from the Alabama Department of Corrections where he served as departmental energy officer and director of the Alabama Correctional Industries.
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|Date:||Sep 1, 2016|
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