Right alongside increasing gas prices, demand for commercial vehicles powered by compressed natural gas (CNG) is moving on up, according to Ford. Fleet managers are finding that there is no time like the present to convert their current vehicles to run on CNG or add CNG-powered machines to their service lineup. The most obvious attraction is, of course, fuel cost savings. While current gas prices are hovering near $4 per gallon after climbing rapidly over the last few months, CNG prices are less volatile – its price per gallon equivalent was at less than $ 2 a gallon as of January 2011, far below its peak of $2.34 in 2008. Added incentives include government rebates and tax credits. There is also federal funding available to help with the installation of more CNG fueling stations.
There's a bigger benefit than the bottom lines of commercial fleet operators. According to the EPA, CNG use may reduce emissions by up to 40 percent. Additionally, 85 percent of the CNG consumed in the United States is produced domestically, so running vehicles on natural gas can reduce dependence on foreign oil. A CNG-fueled public bus sure is more pleasant to be around than breathing in the fumes from one that runs on diesel.
* Rising price of traditional gas coupled with significant government incentives and an increasing number of fuel stations is pumping up demand for compressed natural gas-powered (CNG) vehicles by commercial customers
* Ford meets demand by offering CNG as an option for Transit Connect, E-Series vans and F-Series Super Duty trucks
* An extremely clean-burning fuel, CNG usage can result in 30 to 40 percent less greenhouse gas emissions, according to the U.S. Environmental Protection Agency
DEARBORN, Mich., March 29, 2011 – Higher fuel prices, increasing government incentives and more fueling stations are spurring interest in compressed natural gas-powered commercial vehicles offered by Ford Motor Company.
Consider Metro Taxi of West Haven, Conn., which soon will take delivery of 20 Transit Connect Taxis powered by CNG. Owner Bill Scalzi said he bought the CNG-powered Transit Connect Taxis because of rising gas prices, government funding and the fact that there will soon be more CNG fueling stations in Connecticut, including one he is adding to his facilities.
Scalzi is not alone in wanting to own natural gas fueled vehicles as orders for CNG Transit Connect Taxis are coming from companies in places like Las Vegas, St. Louis, Boston, Chicago and Hartford, Conn.
"Fleet managers are adding all the reasons up and concluding that it makes sense to switch to CNG now more than ever," said Rod Phillips, Ford Commercial Business Manager of the New England area.
CNG is made by compressing natural gas, which is mainly composed of methane. It is stored and distributed in hard containers at a pressure of 2,900 to 3,600 psi. About 85 percent of the CNG used in the United States is produced domestically.
CNG is used in traditional gasoline internal combustion engines that have been modified to operate on CNG. In addition to Transit Connect Taxi, CNG is an option for Ford E-Series vans and F-Series Super Duty trucks.
The benefits are numerous.
First, CNG is a nontoxic, extremely clean-burning fuel and significantly reduces CO, CO2 and NOx compared with gasoline. According to the U.S. Environmental Protection Agency, use of CNG can result in 30 to 40 percent less greenhouse gas emissions.
"The ability to convert the Transit Connect to CNG is a big driving force for us," said J.J. Bell, vice president of Las Vegas-based Whittlesea Blue Cab, which has ordered Transit Connect Taxis powered by CNG. "We are converting more and more of our fleet to this alternative fuel."
Another benefit is cost. According to the U.S. Department of Energy, between September 2005 and January, the price per gallon equivalent of CNG peaked at $2.34 in the summer of 2008. The national average was $1.93 in January 2011, the same as it was in October 2010. That's important at a time when the price of gas is flirting with $4 per gallon.
"Every time fuel costs start climbing, the level of interest in alternative fuels increases," said Carla York, CEO of Reston, Va.-based Innovation Drive Inc., a company that manages alternative fuel-related projects.
She said her organization receives 12 to 20 percent more calls with every 50-cent increase at the pump.
Government incentive support
An additional benefit is the amount of funding available. Government incentives such as rebates or tax credits are prompting fleet owners such as Scalzi to buy or convert their vehicles to run on CNG at reduced rates.
For example, the federally funded Clean Cities Petroleum Reductions Program is providing $300 million in funding to regional projects across the United States. One project is the Connecticut Clean Cities Future Fuels Project, which partially covers the costs of converting a vehicle to CNG. That project alone plans to provide funding for a total of 264 alternative-fuel vehicles.
"Without the help of the government program I wouldn't have been able to purchase so many CNG-powered Transit Connect Taxis at one time," Scalzi said. "I like the Transit Connect Taxi for its spacious passenger area and cargo capacity, so the government assistance was timely."
The incentives also are helping fund construction of CNG fueling stations. Nearly 1,000 CNG fueling stations are now spread across the United States.
As a result, cities such as Tampa, Fla., and St. Louis soon will have their first public CNG stations.
Gerald Koss, marketing manager for Ford fleet operations, said Ford anticipated the infrastructure to support CNG vehicles would evolve and remained committed to its plans to bring CNG-powered commercial vehicles to market – even during economically challenged times.
"We took the chance that infrastructure would expand when we introduced our Transit Connect Taxi CNG capability in advance of any incentives for infrastructure or CNG conversions," said Koss. "It turns out our timing couldn't have been better."
Ford has invested billions in researching and developing new fuel-efficient engines, transmissions and electrified vehicles, even during the depths of the economic downturn when competitors dialed back product spending. Today Ford has 12 vehicles with best-in-class fuel economy and four models with at least 40 mpg – claims no other full-line automaker can match.