Renewable Propane Shared Spotlight at 2017 "ACT" Expo

The propane industry gathered further traction at the Alternative Clean Transportation (ACT) Expo last spring. Propane stalwarts provided updates from a school district that uses propane school buses, as well as the latest products and information on autogas advances at several expo hall exhibits. One highlight was the presentation by Joy Alafia, the president and CEO of the Western Propane Gas Association (WPGA), who underscored the association’s commitment to helping the industry step up production of renewable propane.
ACTExpo 2017

The Long Beach, Calif. event in early May 2017, featured product educational sessions, exhibits, and announcements from companies promoting advances in such areas as hybrid-electric, hydrogen fuel cell, and renewable diesel. Propane garnered attendees’ attention with highlights that included a press conference by fuel systems provider Agility (Costa Mesa, Calif.), confirming its launch of a new propane powertrain systems business unit. Following the Expo, on May 11, Agility made a related announcement that the new unit had acquired the assets of propane fuel system provider CleanFUEL USA (Georgetown, Texas).

A Propane Education & Research Council (PERC) update on emergency responders’ use of propane autogas, a ROUSH CleanTech discussion on its propane product offerings, and an event honoring the Propane Education & Research Council’s (PERC) outgoing president and CEO, Roy Willis, were among other propane highlights.

Alafia provided a presentation on infrastructure while offering an overview of propane and the propane autogas market. She also discussed the propane industry’s work in renewable propane, but she started her presentation by showing a photo of a propane molecule comprising three carbon atoms and eight hydrogen atoms, and then noting that selecting a fuel for your fleet is similar to choosing a pair of eyeglasses.

“It’s all about the right fit,” she said, comparing the selection of a fuel for a fleet to choosing eyeglasses. “Electricity might work great for some. For others, it might just be cost-prohibitive. Natural gas might work great for some, and propane could fit for some. So it’s really about finding the ‘right pair of glasses’ for your fleet.”
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Moving on to discuss renewable propane, she mentioned the industry’s consideration of hybrid propane-electric engines. “Near-zero-emission technology is coming for propane, and I’d be remiss if I didn’t mention the ‘f’ word for this group—which we know is ‘fossil’—and so we are committed to renewable,” Alafia said.

She noted that Neste Oil is expected to open a biopropane facility this year, adding that the company is looking to produce 40,000 tons of renewable propane per year.

Alafia went on to discuss how renewable propane is produced, from feedstocks such as vegetable oil, micro algae, and waste products. “All this offers a lower carbon intensity than fossil fuels and even, of course, conventional propane.” She noted that today, if all of the facilities that produce renewable diesel were upfitted to produce renewable propane, it would result in a low estimate of 91 million gallons of renewable propane in the market. “The high side would be 165 million gallons, and this is without a lot of market signals to invest in this.”

The 165 million gallons represents 35% of the propane consumed in California, which is a significant number, Alafia stated. But renewable propane is expensive to produce.

“Here’s where we are excited to partner and being part of a green and clean energy economy and being eligible for some of those credits to offset the cost to make it commercially viable.”

In a separate presentation expanding on Alafia’s comments regarding Neste’s work in renewable propane, Neste vice president of sales for North America, Jeremy Baines, explained that the company is in the process of starting production of bio-propane this year, adding that the business is investing more than $60 million to produce biopropane at its refinery in Rotterdam, the Netherlands. Production is expected to total 30,000 to 40,000 tons per year (1.2 million to 1.7 million gallons). The new unit will purify and separate biopropane from the side-stream gases produced by the refinery. Neste’s biopropane is comparable to fossil propane and is suitable for use in existing LPG applications.

Baines went on to note that his company’s biopropane is produced from waste and residues formed in industrial processes, such as waste animal fat or fatty acid distillates, which are vegetable oil processing residues. SHV Energy in the Netherlands will market and sell all of Neste’s 160,000 tons of biopropane over a four-year period.

Also during the ACT Expo, Tad Kledzik, manager, transportation services for Pasco County Schools in Florida, discussed his school’s use of 45 LPG buses. His duties include overseeing the transportation of “loud, active children, 37,000 of them, twice a day. In the morning they’re relatively asleep, and in the afternoon, they’re wired and ready to go.”

The district purchased 13 Bluebird Vision propane buses in 2014 and installed a propane filling station at a district site in Dade City, Fla. In January 2016, the district ordered 32 more buses and added a second filling site with 3700 gallons of storage in Zephyrhills, Fla.

Kledzik spoke about how the alternative fuel excise tax credit, which was 50 cents per gallon and then 36 cents, resulted in about a $140,000 return to the district. He hopes to get additional retroactive funding from the alternative fuel infrastructure tax credit as well, and the state of Florida offers additional incentives of up to 50% of the incremental cost of propane vehicles.

He noted the importance of the $140,000 savings. “In my world, I could say it adds another bus I could buy. But in my world it’s also three to four teachers. It’s also furthering the educational opportunity of the 75,000 kids that are in those schools. That’s where my return on investment comes.”

Kledzik closed his presentation by showing a video of a collision earlier this year between a semi-truck and one of the 32 recently purchased Pasco propane school buses. At least three children and one adult suffered minor injuries. “But the best part of all of this, the fact that this was a propane bus got zero press time. Safety is paramount, and the school bus industry does an amazing job of engineering these buses to a high standard and that certainly includes the alternative-fuel aspects.”

Andrew Cullen, senior vice president, fuels and facility services, for Penske Truck Leasing, presented a session titled “Focusing Freight on Efficiency” covering efficient maintenance processes. He and two other Penske representatives talked with BPN at the Expo, explaining that Penske currently operates about 50 Ford medium-duty vehicles with the ROUSH CleanTech propane system. Customers can lease the vehicles through Penske, which can also provide contract maintenance. One Penske propane customer, Alpha Baking, takes advantage of Penske’s full-service truck leasing and maintenance of its trucks that use the ROUSH CleanTech system.

Dean Stapleton, senior manager of alternative fuels, Penske Truck Leasing, noted that propane is an “up and comer” in the medium-duty market. “I’m getting more calls about propane than I used to get,” he said, adding that many of the calls come from office supply and food delivery companies. “When we look at both CNG and propane, propane sometimes is a better fit depending on the fueling operations, because [for] a fleet of medium-duty trucks like that, if there is no CNG in the area, it’s very easy to drop the propane tank right on the customer’s site. Manufacturers are offering more and more [propane] vehicles. It’s a technology we’re going to see grow. Maybe not a leap, but there will be some incremental growth.”

It has grown enough that Penske will soon add propane stations to its Web-based application, www.altfuelstations.com. The company is working with PERC on that program, and Stapleton estimates that the propane portion of that application will launch in the third quarter of this year.

Stapleton has noticed a misconception among propane customers who are used to paying higher prices for propane to fill their smaller cylinders. They don’t know about the low price of propane compared to other vehicle engine fuels.

He added that Penske uses propane as a heating source at many of its maintenance facilities and warehouses and also as a fuel source for some of its forklifts.

In other propane-related news from the 2017 ACT Expo:

  • Mike Casteel, director of fleet procurement for UPS, participated in a session titled, “Lessons Learned in Reaching 1 Billion Alt Fuel Miles and Expectations for the Next Billion.” A slide showing all of the alternative energies in UPS’ fleet of 8100 alternative-fuel vehicles, including propane, CNG, LNG, electric, ethanol, biomethane, hydraulic hybrid, and electric hybrid, was part of the session. A “UPS Rolling Laboratory” graphic stated that the company uses propane vehicles for rural routes of more than 100 miles. UPS invested in 55 propane fueling sites through 2016.
  • PERC president and CEO Willis, who is retiring this July, was honored along with other energy industry representatives at an event titled, “Perspectives from Transportation Trailblazers.” Erik Neandross, CEO of Gladstein, Neandross & Associates, the company that serves as the planner for the ACT Expo, moderated the “Trailblazers” session and noted that Willis has been “really rolling up his sleeves and getting the organization involved in technology and transportation, vehicles and commercialization, and technology development, and really getting the industry moving in the on-highway vehicle space.” PERC COO Tucker Perkins accepted the honor for Willis.
  • Todd Mouw of ROUSH CleanTech (Livonia, Mich.) was part of a session titled, “Ultra Clean Heavy-Duty Vehicle Summit,” and spoke on “Near Zero Emission Propane Autogas Engines.”
  • Mike Taylor, director of autogas business development for PERC, participated in a forum titled, “Choosing AFVs in First Response Operations.” He discussed “Propane Autogas: The Right Choice for Emergency Situations.”