CEO_shield.pngCEO Policy & Research Team

 

When thinking of alternative fuel vehicles, one’s mind usually gravitates towards the media-star electric vehicles. But there are other options out there, especially for fleet managers, who are looking for cleaner burning and more cost effective fuels. In particular, for vehicles that are operated indoors, a great alternative fuel for you is propane, which is already popular among heavy and medium sized industrial vehicles such as tractors, zambonis, fleets, forklifts, and buses. The Propane Education & Research Council lists four reasons that we should be thankful for propane including propane being clean, American-made, abundant, and affordable. The two awesome facts that we would like to highlight here are how clean burning and economic propane is.

 

To demonstrate the economics of propane, we were fortunate enough to get in contact with Brad Bayne, who is a fleet manager for Supershuttle in Fort Collins who operates his fleet on the resource. The Colorado Energy Office (CEO) Policy and Research team talked to him to find out why propane is good for his fleet and why it is a good option for yours.

 

New Design crop.jpg

 

Why do you run your shuttles on propane?

Initial reasons were lower fuel costs and better for the environment.

 

What are the economic benefits?

We save ~$300k per year in fuel costs over a traditional gasoline version.

 

What gave you the idea?

This decision was made before me, but our HQ were looking for cost saving measures in 2012 and partnered with Roush on the E350 platform.

 

*E350 is a type of van

 

Have costs gone significantly down since the natural gas boom?

When I started in early 2014 propane costs were at an all-time high.  Since that time we have signed a national deal with Alliance Autogas and with the current federal tax credit we are currently purchasing propane at all-time low prices.

 

*Brad is referencing the Alternative Fuel Excise Tax Credit. This incentive makes available a $.50/gallon tax credit available for natural gas and propane powered vehicles.

 

What has turned you into not only a user but a proponent of propane vehicles?

After I started with the company I quickly realized the annual fuel savings.  On our E450 vehicles we save ~$14k per year based upon our usage.  We see a ROI on the incremental costs of the propane system in less than a year and almost see a complete ROI on upfront costs during our 5 year life cycle of these units. Based upon initial vehicle costs and maintenance costs during the 5 year life of our vehicles which equates to ~$100k, we save $70k in fuel costs for a net vehicle cost of $30k.   These numbers are based upon $1 propane and $2.10 gasoline per gallon.

 

*”One of the unique aspects of propane compared to gasoline in many instances is the ability for entities to arrange for long-term fixed price contracts with propane suppliers, thereby locking in prices which can be beneficial to entities, as long as gasoline prices remain higher than propane prices. The actual savings on fuel costs vary from state to state, region to region, so applying an “across-the-board” savings calculator on propane is not a practical measure at this point.” - The Stennis Institute

 

I.e. Not all contracts will secure propane for as low as $1/gal, Brad’s contract purchases 180,000 gallons of propane per year.

 

Have maintenance costs for your fleet vehicles gone down since you switched to propane?

We have maintained our maintenance costs using propane.   

 

In an awesome sum, propane is cost-effective for his fleet. Reducing your net vehicle costs from $100K to $30K is massive. Plus, when he mentions his costs savings based on $1 propane and $2.10 gasoline per gallon prices, that $1 is not including the Alternative Fuel Excise Tax Credit.

 

As mentioned in Brad’s statements as well, we should also be thankful for propane since it cleaner burning than fossil fuels. Which is why propane is beneficial for indoor applications, since its emissions are less toxic which make it safer for operating in confined spaces. “Propane has 12 percent less carbon dioxide, almost 20 percent less nitrogen oxide, up to 25 percent less greenhouse gases, and up to 60 percent less carbon monoxide than gasoline-powered vehicles.” Some even argue that due to the power and cost implications, propane fueled vehicles are even more effective than electric powertrains. Propane also presents no threat to soil, surface water, or groundwater because it is gaseous and therefore if spilled would release into the atmosphere not the ground. It is also safer to use and operate compared to other natural gas byproducts due to its low pressurization requirements.

 

Fun fact, propane vehicles also tend to perform better in cold weather because of its gaseous fuel mixture (propane and air), which allows the vehicles to not deal with the cold start issues that liquid fuel cars have. So thanks for that.

 

So we here at the CEO would like to give thanks to propane. For being a clean burning alternative fuel that is still strong and efficient, providing farmers and fleet managers alike with a powerful resource for operating heavy and medium sized vehicles. We would also like to thank propane for making it an easy choice economically as well, where it’s fuel price tends to be about half the price of gasoline consistently. To learn more reasons to be thankful for propane, check out the liquified petroleum gas (LPG) section of the Refuel Colorado site!

 
Tags: 
Decision Resources, Fleets, Solutions / Case Studies