Will propane usher in an increasingly popular alternative to gasoline and diesel in America? Or will it be merely a "bridge" fuel, for use in commercial fleets until electric vehicles become more prevalent? Propane is the third-most common vehicle engine fuel behind gas and diesel. 15 million vehicles worldwide run on propane--200,000 of which are in the U.S.--but it's repeatedly failed to gain more widespread traction domestically, favored instead for use in forklifts.

That could change with the uptick in gas prices, which have climbed on average above $4 a gallon in most states, but economic factors alone have yet to propel propane to prominence.

The propane movement gained some political momentum with Michigan Senator Debbie Stabenow's recent support of the Propane Green Autogas Solutions Act of 2011, which has been introduced to give the movement some more visibility in D.C. If passed, the Propane Gas Act will extend federal incentives, encouraging more companies to consider propane-autogas-fueled vehicles.

The governmental involvement stems from the economic and geopolitical concerns inherent in the issue.

"With propane, we've got a fuel that is abundant, it's clean, it's cheap, it's safe, it's domestically produced here in this country," said Todd Mouw, vice president of sales and marketing at Roush, Ford's premier powertrain development partner. "But, as you know, for so long gas and diesel and oil have been so cheap, we haven't been forced to look for an alternative. Now as national security concerns go up, we don't want to continue to send dollars over seas to countries that harm us."

Propane's Advantages

The price, availability, and environmental concerns are ostensibly in propane's favor in the American market when compared to oil and gas.

In the U.S. market, 90% of all propane used comes from domestic sources (mostly Texas, Pennsylvania and Alaska), 7% from Canada, and 3% from other international sources. This self-reliance eliminates the concerns of precarious relationships and contingencies with Middle Eastern countries.

Propane has a 25% reduction in greenhouse gas emissions compared to gasoline, hence the use in forklifts in warehouses that are enclosed. In addition, propane has been 30 to 40% less expensive than gasoline over the last 15 years, with the differential increasing with propane at $2 a gallon now and gas getting pulled toward the $5 mark.

"We need to clean up our environment and we need reduce costs with gas prices going through the roof. Now, all of a sudden, propane is becoming front and center again, because it's a very adaptable, affordable fuel," Mouw said.

For instance, 3,000 Frito Lay delivery trucks run on propane--typically delivery fleets have been favored for propane use--but, more than 100,000 vehicles could be readily converted to propane-power according to Roush.

"D.C. has latched onto electric vehicles, " Mouw said. "Let's take advantage of what we have available today and let the private market figure it out."

The Bridge To Nowhere

The price of natural gas is a major antagonist for propane. In the U.S. it is about half as expensive of as propane, and natural gas vehicle conversions are about 50% more than propane.

"As a bridge fuel, most view [propane] as limited by availability of supply," said Rob Brown, of Craig-Hallum, a research firm. "However, natural gas is viewed as a better bridge fuel, because it is cleaner, more available and cheaper."

The country currently lacks a comprehensive clean energy policy and instead relies on individual proposed acts to bolster each technology or fuel alternative. Propane could offer a viable short term solution to wean us off gas and diesel, but availability of propane supply over the long term is a concern for those betting on it as a major bridge fuel.


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