Propane Market Share Increases as Fleet Operators Warm to Fuel’s Advantages

July 26, 2017 by Dale Buss, @DaleDBuss

Propane fuel continues to gain share as an alternative fuel choice for commercial vehicles as its affordability, price advantage and fueling-infrastructure simplicity win adherents among fleet operators.

Known in the trucking and delivery business as “autogas,” propane also attracts commercial fleet operators because of the overall lower cost of ownership compared with diesel, gasoline or compressed natural gas counterparts.

And propane autogas is approved as a clean alternative fuel under the Clean Air Act of 1990 and is sourced domestically.

“We’re seeing repeat buying,” said Michael Taylor, director of autogas business development for the Propane Education & Research Council, a national trade group. “Customers are beginning to establish propane in their fleets as a fuel of choice rather than as an alternative fuel.”

Orders of propane vehicles for 2018 and beyond have hit record levels, said Todd Mouw, vice president of sales and marketing for Roush CleanTech, a Livonia, Mich.-based company that manufactures propane fuel systems.

Roush is slated to do a conversion of a 400-truck fleet later this year, and is experiencing “record growth this year from existing customers,” Mouw said.

Recent projects include the conversion of 50 Ford F-550 trucks for propane provider AmeriGas, 22 Ford F-450 bakery trucks for Alpha Baking and an additional 20 Ford F-59 trucks for H&S Bakery.

H&S Bakery truck running on propane gas

An H&S Bakery truck running on propane gas. (Photo: Roush CleanTech)

Last year, Bimbo Bakeries USA deployed 84 new Ford F-59 trucks equipped with Roush’s technology to deliver baked good from a variety of its brands to retail locations in Chicago, Denver and Washington, D.C., markets.

And Nestlé Waters North America — which bottles the Pure Life, Poland Spring, Perrier and S. Pellegrino brands — added 155 Ford F-650 delivery trucks that run on propane autogas.

Roush is also working to replace more than 300 ConocoPhillips trucks with vehicles powered by propane by 2021. The project started with 30 trucks in 2015.

“The F-250/350 propane autogas vehicle deployment with Conoco has been very successful,” Mouw said.

The company will continue to support Conoco’s fleet, though Roush is phasing out its propane conversions of smaller trucks such a the oil company is using to focus more on Class 4 through 7 vehicles.

Roush truck clean tech

Roush CleanTech’s new 35-usable gallon, single-saddle propane autogas fuel tank for the Ford F-450/F-550, on display at the National Propane Gas Association Southeastern Convention & International Propane Expo in Nashville. (Photo: Roush CleanTech)

Bus operators and fleets with trucks in the Class 4 through 7 weight segments are the most likely to convert existing vehicles to propane and order new ones outfitted with autogas-burning systems, Mouw said.

“School buses continue to lead the way,” said Nathan Ediger, vice president of autogas for Ferrellgas, an Overland Park, Kan.-based propane provider. “But we are seeing growth in all forms of transportation.”

Municipal fleets are choosing propane-powered vehicles for their transit agencies, and the food and beverage industry has really taken to autogas for delivery trucks, Ediger said.

At the point of use, propane emits fewer greenhouse gases than gasoline, diesel, heavy fuel oil or E85 ethanol per unit of energy, according to the Propane Education & Research Council.

As far as long-term fuel availability is concerned, propane — like natural gas — benefits from the increasingly ample supply of hydrocarbons being produced in the U.S.

“This country will export 10 billion-plus gallons of propane this year, so there will be price stability for years to come,” Taylor said.

There is a slew of other benefits to autogas.

“Propane fuel systems are lower pressure and less complex than their CNG and diesel counterparts,” Ediger said.

Propane works at just a couple of hundred pounds of pressure compared with 3,600 for compressed natural gas, making it a safer option. The fuel tank is also smaller.

Also, as autogas use grows, so do the number of conversion options being provided by manufacturers and aftermarket suppliers.

Ford, for instance, just launched a saddle-mount tank option for its F-550 truck so buyers no longer have to extend their cab axles to use autogas. And similar options have proliferated for Class 6 and 7 trucks, Taylor said.

Ford f-550 propane engine

Ford F-550 truck with saddle-mount tank option. (Photo: Ford)

“For maneuverability, storage — all the things that operators struggled with before with propane — we’ve eliminated some of those barriers to entry,” he said.

Operators are also drawn to the convenience and cost of establishing an autogas-fueling infrastructure.

More fleets have soured on the time wasted by drivers filling up at public stations where they have to get into queues for diesel fuel, Taylor said.

“With a proprietary propane fueling station, trucks can be fueled and ready to go before drivers come in,” he said.

And operators “can control the process more versus having guys go out and do public fueling,” Taylor said.

Installing a propane-fueling infrastructure is relatively easy and inexpensive compared with other truck fuels.

“You can get a pretty sophisticated setup for $50,000 or less, and a lot of propane companies will do that for free in exchange for a contract,” Taylor said.

Their engine maintenance costs also are much lower in contrast to diesel fuel.

Operators “are getting more schooled on the upcoming regulatory requirements for diesel, which make it more difficult from a cost as well as maintenance perspective,” Mouw said.

“Industry leaders are making major purchases, and the people on the periphery are getting more confidence to decide for propane,” he said. “We continue to see growth across all fleet segments, but recently the largest movement is replacing diesel and CNG fleets.”

“Fuel costs have remained relatively flat, but the vehicle purchase price and overall cost of ownership has fleet managers looking for another option,” Mouw said.

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