Propane offers some relief from recent high gas prices
January 4, 2014 7:16 PM
Matt Wright of Globe Parking fills the shuttle bus with propane last month at the station in Coraopolis. Globe Parking recently converted all of its shuttle buses to propane autogas and is paying less than $2 as a result.
By Michael Sanserino / Pittsburgh Post-Gazette
In using a technology that's more than 100 years old, Globe Airport Parking finds itself on the cutting edge of a trend.
The off-site airport parking company switched most of its shuttle bus fleet to a propane-based fueling system over the past year, part of a nationwide movement as businesses search for long-term relief from high gas prices.
Though the recent shale boom has generated interest in natural gas vehicles, the use of propane -- a byproduct of shale gas that was first used as an automotive fuel in 1913 -- is growing in popularity for vehicles as well.
Propane vehicle sales more than doubled in 2012 -- from less than 5,000 to more than 10,000 nationwide, according to ICF International, an energy consulting firm based in Fairfax, Va. Most of those new vehicle sales have been attributed to "green" consumers, since propane is a federally certified clean fuel.
More than 270,000 vehicles nationwide use propane, according to the Department of Energy, making it the third most popular fuel in the United States, behind gasoline and diesel.
This isn't the first time that propane has gained favor in the nation's fuel choices.
"During the energy crisis in the '70s, when gas and diesel were short, we had a spurt of growth back then in the industry," said Ron Schramm, president of ProGas Inc., a Zelienople-based propane supplier that converted Globe's vehicles.
The former Pittsburgh Press converted many of its distribution vehicles to propane at the time.
"Then the [gas] price dropped below what the benefits of propane would give them," Mr. Schramm said. "And it went away. People just stopped doing it."
But the long-term price outlook could help the trend stick this time. Gasoline prices are projected to remain high, while propane prices are projected to drop slightly. ICF International projects that by 2020, more than 40,000 propane vehicles will be sold each year.
Tim Maida, vice president at Globe Airport Parking in Moon, started exploring alternative fuels about two years ago, when gas prices hovered near $4 a gallon at the pump.
Though he considered going to natural gas, he abandoned that idea because the equipment needed to convert his buses was too big and the conversion cost was too high -- about $15,000 per bus, not including the cost of installing an on-site fuel tank and pump.
Propane seemed like a viable alternative; It cost $7,000 to convert each bus and offered comparable savings off the price of gasoline.
"I was looking for something different," Mr. Maida said. "I was hem hawing around, and I was saying to myself, 'My father's never going to go for this.' "
His father, Dan, founded the company 35 years ago. But after being presented with the potential savings, he agreed last August to test one of his buses with the bifuel system. It uses traditional gasoline to start and switches to propane when the engine warms. Other propane vehicles run solely on propane.
A month after switching the first bus, Globe switched the other three gasoline buses to the bifuel propane system. The company still operates two diesel-only buses.
In its first full year, Mr. Maida said the company will save about $45,000 on fuel costs -- a good return on his initial $28,000 investment. Those savings include a 50-cent-per-gallon alternative fuel tax credit from the federal government, also available for natural gas vehicles.
There are some drawbacks. Propane is not as fuel efficient as gasoline; Mr. Maida said his buses average between 8 mpg and 9 mpg, below the 10 to 11 mpg they averaged with gas. Natural gas offers better fuel efficiency and currently sells about 60 cents per gallon cheaper than propane.
But for Globe and many companies with a small- to mid-sized vehicle fleet, propane makes sense.
Companies such as ProGas, AmeriGas, based in Valley Forge, Pa., and FerrellGas, based in Overland Park, Kan., can install on-site fuel tanks with regular supply. An on-site fuel tank that delivers natural gas is cost-prohibitive for most smaller firms.
Globe is scheduled to receive a new bus this week, which also will have a propane-based fuel system. All future buses will be retrofitted with the propane-injection system from the bus it replaces in the fleet.
Perhaps most importantly, Mr. Maida made his boss -- his dad -- a believer.
"He likes the savings."
Michael Sanserino: firstname.lastname@example.org, 412-263-1969 and Twitter @msanserino.
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