Propane Bobtail Off To a Good Launch

Curtis Donaldson remembers a GM gasoline-powered truck coming out a few years ago that featured a new set of electronics. Although he really wanted a new truck, he decided to wait a while for the electronic bugs to get worked out. He eventually bought the truck and converted it to propane, but he thinks about that purchase now when he considers how the Freightliner S2G propane-fueled bobtail with a CleanFUEL USA propane system is faring in the second year of its launch.
CleanFUEL Bobtail
Donaldson is always optimistic at the launch of a new propane-fueled product, but then he reminds himself that customers have to warm up to the product. “Every time you launch something, you have launch issues, and you take care of those customers,” he said. “We have a lot of positive testimonies, but some marketers have said, ‘I’m waiting a year,’ and that is understandable.”

Regardless of that hesitancy, the number of S2Gs sold so far has come close to expectations, and more orders had come in as of February than at this time in 2014. Order numbers are also strong for the Thomas Built bus with the same CleanFUEL USA propane system.

“We’re seeing a larger demand than you would expect to see in the second year of a program. With low gas prices, the future is bright.”

Broad Choice of Vehicles Helps Industry Survive Price Crunch

Why should people choose propane autogas when the price of gasoline has fallen so much? In February, a transportation industry trade publication reporter asked Curtis Donaldson of CleanFUEL USA (Georgetown, Texas) that question, which Donaldson has heard many times lately. The CEO of the liquid propane injection (LPI) systems provider told the reporter what he tells his fleet manager customers and everyone else: The other values of autogas don’t go away just because its price is not as favorable compared to gasoline — the fact that propane is readily available, cleaner-burning, and domestically produced doesn’t change when prices change. And energy prices will go back up.
Southeast Donaldson

After his interaction with the reporter, Donaldson saw a news item online that strengthened his point. The article predicted that crude oil would head toward $100/bbl. But he was not surprised because he heard the same thing when he spoke to three major oil company representatives in the previous month.

 “Every one of them said it’s going back up,” said Donaldson, who founded Clean Fueling Technologies in 1993. The company name became CleanFUEL USA in 2000, with a goal of installing 24-hour fueling stations in metropolitan markets. Fifteen years later, it is a global provider of propane vehicles, stations, and dispensers.

Donaldson has experienced the ups and downs of the energy business during his more than 20 years with CleanFUEL USA and about 10 years prior to that as alternative fuel manager for ConocoPhillips. He spoke to BPN about trends he is seeing in the propane industry, predicting that because of the surplus supply of propane, its price won’t rise as quickly when gasoline prices eventually go back up.

“I think the other distinction is, over that same period of time, propane has decoupled itself. We’ve become a net exporter,” he noted. That along with the surplus supply will probably mean more downward pressure on propane prices versus gasoline and diesel. “And diesel prices haven’t necessarily fallen like gasoline has. We’re still a great value compared to diesel.”

He believes his fleet manager customers agree, and he noted that fleet managers don’t make short-term decisions. They might slow down their purchases of propane-fueled products, but they know energy prices will go back up. A fleet manager recently told Donaldson that his company might only buy 15 propane-fueled vehicles rather than its usual 30, but that fleet manager still believes in propane.

“He knows very well the prices are going back up at some point, which is why he is still committed to alternative fuels,” Donaldson stated.

The broad array of propane product offerings is a trend that is helping the propane industry in that area. The choice of propane vehicles is as strong as he has seen, and he remembers back to the 1990s, when the Ford F-150 and the 7.4-L GM engine were pretty much the only propane autogas products. The limited choice hurt the propane autogas industry then as fuel prices fluctuated. Alternative fuel incentives declined, and Ford and GM ceased production of their propane trucks in the early 2000s, essentially killing the propane autogas industry at the time.

But the industry now has enough product offerings to withstand bumps in the road such as declining prices. Ford, GM, CleanFUEL USA, Roush CleanTech, Freightliner Custom Chassis, and other companies are invested in propane and aren’t going away. They believe alternative fuels have a place. Smaller margins between gasoline and propane prices are not causing school districts to back away from propane as school districts are placing more propane school buses on the road daily. The smaller margins have not been a factor in sales of the Freightliner S2G propane-fueled bobtail, either. Freightliner Custom Chassis dealers are reporting a good number of calls for other S2G applications, such as the box truck and flatbed truck. RH Peterson, a manufacturer of specialty fireplaces and outdoor grills based in City of Industry, Calif., took delivery of the first boxtruck version of the S2G late in 2014 (see p. 44). As a result, Donaldson sees continued growth in the propane vehicle market.

“It may be slower growth and less momentum, but I think it picks right back up, and again what sustains us through the blip is that broad offering of vehicles that this industry has never had before. It’s unprecedented that you can turn to the propane industry and say ‘I can get these 20-plus different vehicles from the original equipment manufacturers.’”

Donaldson’s fleet customers are telling him that their propane marketers are working with them to ease the impact of pricing in the midst of the current small margin between gasoline and propane prices. He has spoken to several fleet customers who are still pleased with their decision to run their fleets on propane, and they are not going to let a one-time decrease in gasoline prices that might last six to nine months cause them to waver from their commitment. CleanFUEL USA is responding to school district orders from all over the country for the Thomas Built Bus, indicating that school districts are still on board with propane. They’re on board because they know gasoline and diesel prices will go back up, and they recognize the non-financial benefits of running autogas.

Along those same lines, Donaldson sees a continuing trend of the U.S. Department of Energy (DOE) and other government entities and state governments providing grant funding for research and development of propane and other alternative-fuel technologies. The lower price differential is not causing those government entities to back off.

“If the DOE thought the sky was falling on alternative fuels, they wouldn’t continue to pump funds and grants and research into promoting current alternative fuels,” Donaldson said. He believes the natural gas industry is also surviving in the current price environment, even though that industry has a tougher sell in the total cost of ownership argument because of its high infrastructure cost. “But I think they have done a good job, too, and they have a broad offering of vehicles now available on CNG. I think you see CNG and propane getting through this crunch time.”

Although Donaldson has not seen many new categories of fleet customers moving toward propane, more fleets in the overall delivery market are seeing the benefits of using the fuel. Delivery company UPS’s announcement last year that it would purchase 1000 propane package delivery trucks and install an initial 50 fueling stations at UPS locations is the most prominent example. Finding quality alternative-fuel products has been the challenge for the package delivery market until recently. High-mileage fleets that depend on OEM warranty and service won’t make a change to alternative fuels until they can see OEM alternative-fuel vehicles.

“The UPS order pointed out to all delivery fleets — and I’m not just talking package delivery, but bread, chips and soda, uniforms, etc.— that there is an OEM vehicle that’s available and reliable and the OEM is standing behind it. I think the delivery market is a perfect one for our industry to focus on and go after, given the amount of vehicles in this country and the mileage driven in that market segment.” Daryl Lubinsky

Blossman's Winning Showroom

march15 27
Walking through the front door of the new Blossman Gas showroom in Asheville, N.C., customers are tempted by a vast array of propane-fueled appliances that can make them feel like “kids in a candy store.” But in this case, it’s eye candy for homeowners, who can easily visualize how the many products on display could enhance their lifestyle. Whether it’s a new barbecue grill to transform a simple dinner into a feast, a new fireplace and surround to make a living space cozier, or a new tankless hot water heater to make a long shower more enjoyable, Blossman Gas has thought of everything. And the best way to describe this showroom is “WOW!!”

Blossman’s commitment to propane appliances is nothing new — the company has believed in the importance of appliance sales for more than 20 years. Prior to the completion of its new showroom last October, it had a 1200-sq-ft area devoted to this segment of its business. When it moved into its new, more centralized location, with hopes that the expanded showroom would increase walk-in traffic, little did it realize that sales would exceed budgetary expectations from the day the doors first opened. It appears that the company’s commitment to propane appliance sales has been a hit with consumers.

Talking with David Lipe, branch manager for the new Asheville, N.C. location of Blossman Gas (Ocean Springs, Miss.), you will soon realize out how strongly he believes that propane marketers should sell appliances, and he is likely another reason why this endeavor is so successful. He feels, “If propane marketers don’t sell, promote, and install and service a propane appliance, who will? In other words, we can’t depend on the Lowe’s and Home Depots of the world to sell the products that burn and use the gas that we sell to make a living. I urge every propane marketer in the country to sell appliances.”
Blossman floor plan

As customers enter the front door, it is impossible to not be impressed by the striking 10-ft linear fireplace with 10- to 12-in. dancing flames that welcomes them to the showroom. In front of the fireplace is a long table with two computer touchscreen kiosks that allow customers to find any product in the Blossman lineup. When customers touch a certain category such as grills, the next screen will pop up, letting them select information on eight to 12 grill models. Although only one or two of the models might be displayed for the customer to see on the showroom floor, the kiosk provides information on all the models that the customer can purchase from Blossman.

The kiosks are also helpful if the sales team is busy helping other customers. “In a lot of cases we can direct them to the kiosk and let them explore while we finish up with the prior customer,” Lipe stated. “Then of course they’ve already seen a few of the things and we can discuss them more in detail. It helps capture their curiosity…and keeps them in [the store] if we happen to be busy when they walk in the door.”

march15 30To the left side of the showroom floor is an outdoor kitchen with everything from gas grills, fish fryers, and grill utensils, to rubs, barbecue sauces, and other condiments. A large blue hammock hangs from the ceiling. Another quadrant of this area features a fully functional kitchen with a five-burner, 36-in. cooktop. A selection of ranges, in addition to a well-appointed kitchen, provides builders and their clients, as well as walk-in customers, with an array of ideas to update their kitchens.

In the center of the showroom floor are a number of laundry pairs — some standard white models, another in a granite gray, and yet another in a fanciful cranberry color. When asked why both washers and dryers are on display (since only the dryers utilize propane) the Blossman representative answered that many customers needing a new dryer (or washer) end up wanting a matching set. Because both are available, customers do not need to leave the showroom to purchase the pair.

Continuing to the right side of the room, customers will see the water heater area. A working Rinnai tankless water heater is available over a small sink, where people can view how the water heater works when the water turns on. Bradford White tank water heaters are located in the same area, in direct-vent and power-vent models. Space heaters are nearby, with vented, direct-vent, or vent-free models available.

To the right of the main showroom, customers enter the fireplace room, which includes fireplaces from Regency and Monessan that are vented and functional. Fireplaces and gas log sets from Empire Comfort Systems are some of Blossman’s hot sellers. At one end of the room, visitors will notice a portrait of Blossman Gas founder Woodrow Blossman and another of his son, John Blossman, who was president and CEO of the company before his passing in 2009.

But the “wall of flame” is the main feature of that room, with 12 sets of live-burning gas logs. The six on the top row are vented gas log sets; the bottom six are vent-free. At any one time, a Blossman staff member can turn on one, six, or all 12 of the units for customers, although Lipe doesn’t recommend turning on all 12 at once since it could increase the room temperature by about 4 degrees every half hour.

All of the live-burn products in the showroom run on propane. Blossman does not stock appliances that run on natural gas but will order one if a customer requests it.

Two walls in the fireplace room are dedicated to options, such as fire screens and fireplace panels. “We’re able to take things off the wall and build the fireplace to suit a customer’s wants, needs, or desires,” Lipe noted. “I call that my ‘build-a-bear’ workshop.” Another wall is dedicated to fireplace mantels.

Also in the fireplace room are two vintage cast iron stoves from Empire Comfort Systems that look like they use wood, but they actually run on propane. “These are heating appliances, but they have the appearance of the old cast iron wood stoves,” Lipe noted. “Not the potbellied stoves, but just the heating stoves. These are freestanding cast iron, very heavy, very beautiful, porcelain-finished space heaters.”

Rounding out the showroom is an area dedicated to space heaters, including vented, direct-vent, and vent-free heaters from Rinnai that can fulfill any homeowner’s needs.

Enthusiastic about all of the propane appliances available at the 5000-sq-ft Asheville showroom, Lipe is also passionate in his belief that propane marketers can benefit from selling products that use propane, even from a smaller, 500-sq-ft site.

He also wants propane marketers to know that getting started is not that difficult. His company already operated a 1200-sq-ft showroom before moving to the new site, so hismarch15 31 staff was experienced in this area. But moving to the larger space did require some homework on the part of the team. The staff members met to determine which brands to display on the new showroom floor. Factors in their decisions were availability of the product, warranty, and responsiveness of the vendors to questions or concerns about the products. The Blossman team decided on choosing “core” brands that they would primarily recommend to customers. Although the showroom carries various brands of each appliance, Whirlpool is its core brand for clothes dryers and cooking products. Other core brands are Bradford White water heaters and Rinnai tankless water heaters. Empire and Monessan are the core brands for gas logs.

“And we’re trying to stay away from the products that the ‘big-box’ stores carry,” Lipe stated. “While there’s nothing wrong with the materials and products they carry, we wanted something that was better. Products that would bring our customers more comfort, whether that be peace of mind, warranty, or price point. There are several different things that go into making that customer comfortable.”

Determining the flow of how the products would be displayed was one of the main challenges in setting up the new showroom. Keeping the grills in one section and kitchen appliances in another section, for example, helps give the area a flow and a purpose.

Lipe notes that the attractive appearance of the new building has helped bring in more customers. But the increased choices of products are the biggest factor in the success of the new showroom. Rather than seeing one or two gas logs on display, as was the case at the previous building, customers now see 12. Instead of one water heater, one cook stove, and one clothes dryer, customers now see several choices of those as well.

He is seeing an increased trend of homeowners wanting propane products such as water heaters, indoor cooking appliances, and outdoor grills. That trend helps toward Blossman’s goal of reaching more of the smaller-volume propane customers. Although the company seeks business from larger commercial businesses that use thousands of gallons of propane annually, Blossman is making a push to target people who might burn 100 gallons or less per year.

“If we can get one or two more products in that home that burn that 50 to 75 gallons a year, that’s one more customer for us.”

Lipe encourages marketers to take advantage of those trends, because companies such as Lowe’s and Home Depot don’t favor propane. “They don’t care; they’re going to sell the electric or gas. It really doesn’t matter to them. I think every propane person that owns a business, whether it be a major company or private mom and pop, needs to be selling appliances to promote their product. We have to have a voice and get our products out there to burn the fuel that we love to sell.”

By Natalie Peal and Daryl Lubinsky

Western Power Aims to Pump Up Ag Sales

By Greg Gilbert

The agricultural market has always been an important — and frustrating — one for the propane industry. Its size and the opportunities it offers are undeniable. The U.S. Department of Agriculture estimates that close to 160,000 farms in the United States employ more than 600,000 irrigation pumps servicing 52 million acres. The numbers for the market in California (the state with the most farms) are more than 6000 farms, 13,000 engines, and 1.1 million acres. Propane is believed to be used on 40% of the farms in the country for everything from crop driers to space heating. Overall, more than 800 million gallons of propane were sold for agricultural use in 2012, more than 10% of all propane sales in the U.S. by volume.

As impressive as those overall numbers are, propane’s share of the irrigation pump market is small, about 4% nationwide and 2% in California. That pales in comparison to the numbers put up by diesel engines, which are estimated at 21% nationwide and 13% in California.

The advantages propane offers — portability, cleanliness, and its inability to contaminate the soil or water — are tailor-made for the ag industry. Diesel engines, however, with their extreme durability and longevity, have long been the preferred choice for most agricultural operations. Add in the fact that for years farms were not subject to emissions requirements such as those imposed upon the vehicle, construction, and marine industries, and the major drawback of diesel fuel — its smog-producing emissions — was a non-issue for the agricultural industry.  

The world, however, awaits us all. In 1996, the Environmental Protection Agency (EPA) set in motion a plan to drastically curb emissions produced by farms. Presently, according to the California Air Resources Board (CARB), beginning on Dec. 31, 2014, Tier I and Tier II diesel engines larger than 175 bhp were to be replaced with Tier IV diesel engines, and beginning Dec. 31, 2015, diesel engines rated between 50 and 174 bhp must also be replaced with Tier IV diesel engines.   
The stricter emission requirements have accomplished two things. They have made diesel engines much cleaner and have made the cost of purchasing and running such an engine much more costly, due to its complex and expensive technology, including the use of a special catalyst that requires the use of diesel emission fluid. The Tier IV engine must run within proper load and temperature limits or risk having its emissions controls shut down the engine. Recent testing sponsored by the Propane Education & Research Council (PERC) concluded that new propane irrigation engines can provide substantial pollutant reductions, including lower greenhouse gas emissions, over new diesel engines.
Gilbert-Western Power
Running headlong into this opportunity is Western Power Products Inc. (WPP; Bakersfield, Calif.). The master engine distributor for John Deere in the Southwestern U.S. since 1979, WPP offers John Deere, Yanmar, and Origin industrial engines, as well as complete powertrain packages. Western Power, which has facilities in Long Beach, Bakersfield, and Woodland, Calif., is a full-service distributor for dozens of dealers, providing extensive training and parts support plus engineering services for its OEM customers’ engines. The Origin Engines (Kearney, Neb.) are 100% EPA-certified 8.0- and 10.3-liter propane-powered irrigation pump engines that are a stouter version than has been previously offered to the ag market. They are made with piston oilers, extreme-duty bearings, cranks, and rods, and hardened intake and exhaust seats, all designed to allow the engine to withstand the higher operating temperatures of propane and the rigors of farm life to provide years of service.

Western Power believes the stars have aligned for propane to make a dent in the diesel-dominated ag market. In researching the market, however, WPP came to the conclusion that a focus solely on propane engine marketing and sales would be shortsighted, and ultimately not as effective as possible.

“Our conversations with farmers, propane marketers, and equipment suppliers all pointed to one overarching truth,” said Tim Miller, general sales manager of WPP. “The California market for propane irrigation engine sales is held back by the lack of a strong field service network. Farmers have been relying on a fully developed and mature diesel service infrastructure for decades. In our opinion, the service infrastructure has to be in place in order for propane engine sales to really take off in the irrigation market.”

The resources required to build and maintain a service infrastructure for propane engines in a state as large as California are significant. Western Power plans to leverage key existing diesel service dealers, which include 80 independent full service company locations and 90 John Deere-branded full-service stores, and bring in qualified independent propane engine service providers. All of these locations must have trained field service technicians, service trucks, and a full array of measuring, testing, and diagnostic equipment to troubleshoot and repair industrial engines.

“Farmers don’t expect engines to always run fault-free,” Miller said. “But they do expect prompt field service and parts support when they require maintenance.”

To that end, Western Power is embarking on a multi-year, multi-layered training program that will enable users of propane-powered irrigation engines in any part of California to get quality service. Presently, WPP counts 64 road technicians and 17 shop technicians in its network who are certified to work on propane engines.

“We have, and are continuing to, assemble a key group of dealers who share our vision of this opportunity for propane in the ag market,” Miller added.

Through PERC’s Farm Incentive Program, $800 per liter of new propane irrigation engine displacement was available for up to 50 new engines in California purchased before the end of 2014. In 2015, the amount was expected to drop to $400 per liter. Currently, eight engines have been placed throughout California in exchange for testing and the gathering of information on the productivity of the engines.

One such farm using a propane powered irrigation engine is Circle G Ranch (Woodland). Circle G has been farming 8000 acres for more than 55 years in the Sacramento area. It typically rotates such crops as corn, rice, wheat, sunflower, tomatoes, and alfalfa. Before switching out its electric irrigation motor for an Origin 10.3-liter engine, Circle G had never used a propane engine but used propane to heat its shops, to run an on-site generator, and for weed control.

Circle G has had the Origin engine for almost a full season. It was run approximately 1290 hours with a normal season being around 1500 hours. With California suffering through a severe drought, Circle G has had to drill some of its wells deeper and pull from deeper levels to compensate for the lack of ground water that would usually supplement its irrigation efforts. The Origin drew from 300 feet down in a 750-ft well this season.

“The Origin engine is running great,” said Mike Gnoss of Circle G. He points to the lower fuel and operational costs of the propane engine versus a diesel engine, as well as the reduced noise and odor pollution as a few of the factors in favor of the propane engine.

“We have had no issues with the propane engine,” Gnoss continued. “Western Power gave us great support as we got it up and running. Any time we’ve had a question they have gotten back to us quickly and given us the information we needed.”

Greg Gilbert is an air quality consultant for the Western Propane Gas Association. Contact him at misc@autumn

World Autogas Demand Jumps 57% In Past Decade; Incentives Play Key Role

A flagship autogas document has been released by the World LP Gas Association (WLPGA) on the heels of the 27th World LP Gas Forum in Miami. The release follows a global autogas industry network review at the October event. Available for download at, a new dedicated website aimed at becoming a go-to online resource for the international autogas community, the document contains case studies and data reflecting changes in the over-the-road market that seeks to inform stakeholders.
“Autogas Incentive Policies: A Country By Country Analysis of Why and How Governments Encourage Autogas and What Works,” reports autogas consumption has been rising rapidly in recent years, reaching 25.8 million metric tonnes in 2013 and increasing 57% in the past decade. There are now nearly 25 million autogas vehicles on the road around the world and more than 70,000 refueling sites. Autogas is the second most widely used alternative to conventional transport fuels after ethanol.
However, demand remains highly concentrated in a small number of markets. The four largest consumers — Korea, Turkey, Russia, and Poland — saw the largest increases in consumption over the last 10 years. Worldwide, autogas currently accounts for 1.2% of total road transport fuel consumption. Further, autogas accounted for 9.7% of global consumption of LP-gas, but this share varies considerably across countries. Among the nations surveyed, the share is highest in Turkey, where it is 74%, and is lowest in the U.S. at just 0.8%.

Moreover, autogas use is still concentrated in a small number of nations. Just five countries — Korea, Turkey, Russia, Poland, and Italy — together accounted for half of global autogas consumption in 2013. The 12 countries surveyed for the report accounted for 55%. In addition, the share of autogas in total automotive fuel consumption varies widely, ranging from a mere 0.1% in the U.S. to 18% in Turkey. The only country other than Turkey where autogas makes up more than 10% of the automotive fuel market is Korea, where the share is 14%. The report asserts that the enormous disparity in the success of autogas in competing against conventional automotive fuels — gasoline and diesel — is explained mainly by differences in government incentive policies.

Noted is that the primary justification for supporting the use of autogas and other alternative fuels through government incentives is their environmental advantage. Autogas outperforms gasoline and diesel in the vast majority of studies comparing environmental performance that have been conducted around the world. Emissions are especially low with respect to noxious pollutants. With respect to greenhouse gas emissions, autogas performs better than gasoline and outperforms diesel on a full-fuel-cycle basis, and when the LP-gas is sourced mainly from natural gas processing plants.

The report concludes that autogas incentive policies are most effective when there is a financial incentive for an end user to choose it over a conventional fuel. The attractiveness of autogas over other fuels depends on the added cost of an autogas vehicle compared to a gasoline variant, or the additional net cost of converting an existing gasoline vehicle; the pump price of autogas relative to diesel and gasoline; and the availability of the fuel on the market. Therefore, the higher the upfront purchase and conversion costs, and the scarcer the refueling opportunities are, the larger the financial incentive must be.

Lower running costs — fuel cost is the most important — need to compensate for added upfront capital expenditures and minor inconveniences. Ideally, savings will eventually offset capital costs. This depends on fuel consumption. The report finds that payback periods under three years have shown the greatest success.

The report emphasizes that the emergence of autogas as an alternative to gasoline and diesel is the direct result of government policies to address energy security and/or environmental concerns. With the exception of ethanol, autogas has been more successful than any other alternative automotive fuel because of its practical and cost advantages. The oil price shocks of the 1970s provided the initial impetus for the development of alternative automotive fuels, as countries sought to reduce their dependence on imports of crude oil and refined products. Environmental concerns have since overtaken energy security as the principal driver of government policies to promote such fuels, as they are generally less polluting.

Accord was evident among World Forum Autogas Summit roundtable members in Miami regarding the weight of government policies on autogas efficacy. While candid and subdued support prevailed favoring continued government incentives and subsidies, Australia provided a cautionary tale for such linkage. The commonwealth’s autogas market took off in the 1990s thanks to a combination of a zero excise tax on the fuel and generous vehicle conversion grants. Consumption fluctuated around 1.1 million tonnes a year between 2004 and 2010 — but has since fallen appreciably.

The WLPGA report outlines a number of factors explaining the decline, including the introduction of, and a progressively rising, excise tax on autogas. Improved fuel economy and consumers shunning larger six-cylinder vehicles, formerly the mainstay of the Australian autogas market, in favor of smaller four-cylinder vehicles — diesel and hybrids — also contributed. Following was a reduction in the value of grants for autogas vehicles. Sales dropped to 813,000 tonnes in 2013, their lowest level since 1994 and down from an all-time peak of nearly 1.5 million tonnes in 2000.

Prospects for autogas use in Australia were dealt a further blow by decisions by two OEM carmakers in the country, Ford and General Motors (Holden), which will cease producing autogas models by 2017 as a result of declining demand and wavering government support for the fuel. Formerly, the federal government made grants available for the conversion of existing vehicles or purchase of OEM autogas vehicles. In 2006 it introduced a program that provided grants to private motorists for the conversion of existing light-duty vehicles (LDV) of less than 3.5 tonnes, or for the purchase of an OEM autogas LDV. The subsidy was doubled at the end of 2008 from (AUD) $1000 to $2000 for an OEM purchase or a conversion. But the conversion grant was thereafter reduced from $2000 to $1250, and by 2012 it had fallen to $1000. Beginning in July 2011, the program was capped at 25,000 claims a year, and then it was eliminated entirely as of June 2014.

The negative results came, surprisingly, because Australia has a comparatively long and pioneering history of autogas use. The federal government encouraged its use since 1981 for reasons of energy security — the country is a large producer and exporter of LP-gas, derived mainly from natural gas processing — and air quality. Today, the nation remains the eighth-largest autogas market in the world with an extensive nationwide retail distribution network. About 3700 refueling sites served an estimated 490,000 vehicles at the end of 2013, about 3% of the total car and truck fleet. More than half of all service stations sell autogas.

“We should not depend on others to sell our fuel, products, or vehicles for us,” asserted summit panelist Warring Neilsen, manager of corporate affairs at Elgas, a leading Australian wholesaler and retailer with residential, commercial, and autogas operations under the UNIGAS brand name. “We need to take ownership for the entire customer experience. Unless we control the entire supply chain we won’t be in gear. The way forward is to supply a complete package for the customer.” The chairman of the Autogas Summit’s leadoff session added, “We have a great story to tell.”

Echoing those sentiments, Autogas Summit roundtable chairman Stuart Weidie, president and CEO of Blossman Services (Ashville, N.C.) and president of Alliance AutoGas, commented, “If nobody got a subsidy, we could stand on our own.” Doubling down, Tom Armstrong, fleet director for ThyssenKrupp Elevator Americas (Alpharetta, Ga.), concurred, “The ROI [return on investment] works with no subsidy.” But that message needs to be broadcast. Armstrong noted that CNG “gets the press.” Propane needs marketing, he maintained, adding that, paramount to successfully marketing autogas to fleets is the message: infrastructure is a fraction of the cost of natural gas.

“Globally that’s our problem,” said Neilsen. “We’re behind the eight-ball when it comes to getting the message out to government and the consumer. We need to promote globally. Subsidies for conversions [in Australia] have gone away. Let that be a lesson to all. We need to work to be self-reliant. Government support can quickly evaporate. Subsidies can leave you weak. Therefore, the autogas industry must seek, justify, and earn support from the consumer on its own merit. Our argument is health and economics. We need to keep banging on our advantages.”

In Australia’s experience, Neilsen explained that subsidies brought numerous additional players into the market. “They came in to feed on the subsidies. In some cases there was little care for quality. It’s hard to regulate a small conversion center. As a result, the entire industry was condemned. Some of those feeding on subsidies had no focus — the person most precious is the customer.”
He further observed that, regarding Australia’s involvement with credit for autogas, financial institutions far preferred OEM offerings to aftermarket conversions. “The aftermarket ended up carrying a lot of baggage. OEMs are the most difficult to engage with, and the concentration must remain on OEMs, but the aftermarket is critical as well.” Going forward, he challenged the industry to convert hybrids to autogas, and to promote “the bigger story that we have a fuel so versatile we can compete with any competitor,” whether they be traditional or alternative fuels.

Although environmental concerns may have overtaken energy security as the principal driver of government promotion of alternative fuels, private companies adopting sustainability initiatives have a more singular mission. Autogas Summit participants heard that private fleet management has a laser focus on return on investment when it comes time to compare fuel choices. Thyssen-Krupp’s Tom Armstrong made the point: “Don’t imagine I was going to go into my boss’s office and say, ‘Hey, it’s going to cost a million bucks, but we’re going to save some trees.’ The ROI has to be there.”

That said, ThyssenKrupp’s move to smaller, more fuel-efficient vehicles required identification of compatible vehicles for its fleet — alternative fuel or not — a task that fell to Armstrong. “With all the choices it’s difficult to determine which direction to follow,” he acknowledged. The fleet manager laid out a strategy of the five Cs — Conserve, Cost Effective, Common Sense, Clean, and Commit. Propane was the only alternative fuel that qualified for all five Cs.

While CNG hit Clean and Conserve, it missed on cost effective, common sense, and commit. E-85 scored on Clean and Cost Effective. Electric, hybrid, and hydrogen tallied two checkmarks — Clean and Conserve. In the final analysis, Armstrong was also able to identify available propane vehicles that fit ThyssenKrupp’s fleet requirements. In addition, propane eclipsed other fuels for a three-year ROI based on mileage and fuel costs. And, while they’re still in place in the U.S., the company is accessing incentives to further lower costs.

Armstrong is in charge of 3200 vehicles — 1600 vans, 1100 pickup trucks, 300 utility trucks, 100 flatbed trucks, and 100 cars. His company’s sustainability challenge set a goal to reduce fuel consumption by 20% by this year, and autogas is to represent 10% of the fleet, or 300 vehicles. Currently, the fleet includes right-sized and alternative-fuel vehicles that run on propane or electricity.

The numbers tell the tale: $1.91 in savings per gallon for propane autogas; $4152 off fuel costs, per vehicle, annually; and 6917 pounds of carbon dioxide eliminated per vehicle per year from ThyssenKrupp Elevator’s carbon footprint, based on its average 25,000-mile-per-year usage. Additionally, the company displaces about 2000 gallons of gasoline per vehicle annually by utilizing autogas.

The World Forum’s Autogas Summit was opened with an introduction into cutting-edge LPG fuel metering technology for modern vehicles presented by Netherlands-based Prins Autogassystemen BV, whose U.S. product distributor, Blossman Services Inc., is a managing member of Alliance AutoGas. A presentation by Roush CleanTech (Livonia, Mich.) highlighted that, at the time of the summit, more than 200,000 schoolchildren had been safely taken to class on propane-fueled buses.

Repsol (Madrid) presented the results of its project on direct liquid injection, in cooperation with other automotive developers. The research concluded that, due to its characteristics, autogas is the only alternative fuel that can be used in today’s low-rpm Otto and turbo-boosted engines while still meeting stringent European Union emissions standards, providing an off-the-shelf solution. Combustion is said to generate nearly no particulate matter. Minimal mechanical modification and no manufacturing cost benefits accrue to OEM vehicle manufacturers.

Finally, the event concluded with an invitation to the 2015 WLPGA Autogas Summit in Seoul, South Korea Jan. 28-29, hosted by the Korea LPG Association.

Note. “Autogas Incentive Policies: A Country By Country Analysis of Why and How Governments Encourage Autogas and What Works” may be downloaded at