For Propane Industry, Lower Oil Prices Bring Positives and Negatives

The recent decline in oil prices will help the propane industry be more competitive in the traditional residential and commercial consumer propane markets. In parts of the country where propane has been losing market share and been less competitive compared to electric heat pumps for space heating, lower propane prices resulting from the decline in oil prices will help the industry slow down the loss of market share, said Mike Sloan, principal for ICF International (Fairfax, Va.). Sloan will give a presentation titled, “Propane Market Outlook to 2020: Impact of Changes in Oil Prices on Consumer Propane Markets” on April 13 at the National Propane Gas Association (NPGA) Southeastern Convention & International Propane Expo in Atlanta.
Sloan 1

The drop in oil prices will also have some negative effects on propane markets, said Sloan, who spoke to BPN before his presentation at the Southeastern event. Fueloil prices in the Northeast have fallen faster than propane prices, lowering propane’s price advantage over that fuel and reducing the economic incentive for customers to switch away from fueloil to other fuels such as propane. Residents will still switch from fueloil to propane, but not at as fast a pace as was expected before the recent slide in oil prices. The drop in gasoline and diesel prices will also slow down growth in propane engine fuel markets. “Propane will still remain very economical in many fleet markets, and I still expect to see rapid growth in the propane engine fuel market, but not quite as much growth as I was anticipating under higher oil prices,” Sloan stated.
 
The positives outweigh the negatives, however, regarding how lower oil prices will impact the propane industry. Natural gas’ competitive advantage over propane will decrease, and propane customers will see less incentive to expand the natural gas system to replace propane. Lower prices will also slow the conversion away from propane and toward electric heat pumps that has been taking place in the southern portion of the country. Sloan sees a potential market share rebound in the northern area of the country that is more propane-friendly. He also expects recent changes in water heater efficiency rules (see p. 26) to lead to faster growth in propane tankless water heater installations in homes that previously might have used electricity.

Analysts over the past year or two had been talking about an impending downturn of oil prices, but people did not know when the decline would happen or how severe the drop would be. Sloan believes the speed and magnitude of the oil price drop is significantly faster and deeper than most anticipated, and it might fall further before rebounding.
Sloan 2
“My understanding is that today it’s down again, and given where oil inventories are, it could continue to drop for a while more,” said Sloan, who spoke to BPN on March 18. But the levels seen at that time and over the past several months are not sustainable over the long term, he added. Looking at current pricing levels is important, but looking at market expectations for the next few years, instead of today’s prices, is also important. If the prices continue at this level for another year or 18 months or so, that will have a negative impact on the cash flow of the oil and natural gas producers, reducing those companies’ ability to cover debt requirements and fund capital investments.
 
An extended downturn will probably lead to a faster rebound once it gets started, leading to more volatility, and that has an impact on the consumer propane industry, although lower propane prices are generally beneficial for retail propane marketers. But in the mid-term to longer term, oil prices will be higher than they are today.

The question is, how high will they go?
Sloan 2b
“That’s a very difficult issue to address and forecast, and I don’t pretend to have a specific forecast of oil prices,” Sloan noted. “I do look at things from different scenario perspectives, and I look at it from the perspective of a low, mid-range, and high oil price scenario.” On the mid-range, Sloan expects West Texas Intermediate (WTI) oil prices to rebound to around $75 to $80/bbl by 2017, well below where prices have been for the last few years, but significantly higher than today’s prices.
Sloan 3
“The rebound might be a little faster than that, or it could be a little slower, but 2017 is a reasonable time frame,” he predicted. On the high end, he envisions a scenario of $100/bbl oil, and on the low end he can envision a scenario where it stays around $60/bbl. But he considers both of those scenarios to be less likely than prices staying in the middle of that range.

The direction of prices depends on other factors such as currency exchange. The recent strengthening of the dollar has contributed to maybe as much as $10/bbl of the decline in oil prices. Changes in international economic growth patterns will also affect the long-term energy price outlook.

“Regardless of what the long-term trend in oil prices is, I would expect there to be quite a bit of price volatility. Oil prices will jump around, both above and below the long-term trend.”

Before the drop in oil prices, Sloan projected total U.S. consumer propane demand to be relatively flat, potentially declining in the next two to three years, before starting to increase in 2017 or 2018 as engine fuel market growth starts to more than offset losses in other sectors.

The decrease in oil prices slows down growth in propane engine fuel markets, but the benefits of those lower prices for the more traditional residential propane heating markets more than offset the autogas decline. Sloan expects an approximate 600-MMgal. increase in the consumer propane market between now and 2020 as a result of lower oil prices. That represents about 7% of the total odorized propane market.

“A decline in oil prices and the corresponding decline in propane prices provides a window of opportunity for the propane industry to increase market share in traditional markets that have been hurt by higher propane prices in the last few years and to recover some of the market that has been lost because of the higher prices.”

North American propane production is expected to continue to increase rapidly over the next few years, despite lower oil prices, mostly from the Marcellus and Utica basins. Domestically, fairly significant growth in propane demand for petrochemicals will occur, perhaps as much as 2.5 billion gallons per year, particularly for the new propane dehydrogenation facilities that are expected to come online in the next two to three years.

The year 2013 was a good one for the residential propane market, he added, and customer goodwill from that year and from continuing low prices in 2015 should result in market growth. Unforeseen factors could change that, but the growth should be sufficient to keep the market stable as opposed to the long-term slide the residential sector has seen over the past six to eight years.

Sloan discussed what he called “different price regimes” over several different time periods and noted that much of the drop in propane prices compared to crude oil in 2012-13 was due to constraints on export capacity. There was no immediate market availability for the growing propane production other than the petrochemical market and a bit of growth in conventional markets. When propane hit very high inventory levels, prices were pushed down to the point where the petrochemical markets were willing to take the available excess of propane. And that allowed prices to fall dramatically. Once the colder-than-normal weather set in for about the past year and a half and once export capacity started to increase, the “inventory overhang” began to disappear, and prices began moving up again. The inventory overhang situation could occur again going forward, pushing down prices again.
Sloan 4b
“But we have a great deal of export capacity coming online, and when that comes online, we’ll be more equilibrated with the international market,” Sloan stated. “So we’ll go away from that time period where propane prices were pushed down because there were no available markets for new production. And we will return to a market where U.S. consumers compete with international consumers for propane. That’s the way it’s traditionally been, although in the past it was the U.S. competing with international markets to import propane into the U.S. Now it’s the U.S. competing for a market where international purchasers have to buy propane in the U.S. and export it to where they need it. And that changes the fundamental pricing structure and puts us in another new pricing regime where even though we returned to the point where propane prices are being set by international markets, they’re being set by international markets minus the transportation cost of moving propane from the U.S. to the international consumer. And as exports increase, the average price of propane in the U.S. should continue to decline relative to international propane prices.”

The Mont Belvieu Propane Price Spread vs. Brent Crude Oil chart shows a long-term continuing decline in propane domestic prices relative to crude oil and international propane prices. Sloan expects the international price of propane will slide a bit compared to the international price of crude. He also expects oil prices to remain at relatively moderate levels for the long term.

“I expect a rebound from today’s prices, but not back to the level that we had seen for crude oil prices over the last few years,” he stated. “Of course, it’s incredibly hard to forecast crude oil prices, and I expect significant volatility both above and below that long-term trend.”     —Daryl Lubinsky

News From NPGA's Innovation Pavilion & Debut of Autogas Pavilion in Atlanta

Located in the Innovation Pavilion in the exhibit hall, the New Product Showcase features products introduced to the market within the past year. After previewing these products, attendees at the NPGA Southeastern Convention can visit exhibitors in their booths for hands-on demonstrations and visit the debut of the Autogas Pavilion.
AutogasPavilionKPERC

Filler and OPD Combo Device
The low-emission SF7647V series combination filler valve and OPD is designed to provide fast filling and protection against overfilling of vertical aboveground small bulk-type containers. It will stop the flow of product into the container when the liquid level reaches 80% to 83% of its capacity.
Exhibitor:
ECI RegO Products
Booth # 736
AtlantaProducts RegOa
Quick-Connect Filling Valve
The Snap-Fill quick-connect propane filling valve enables a quick, safe refilling of propane cylinders, such as those used on forklifts and ride-on mowers. Its secure connection eliminates cross-threading or partial installation and reduces emissions released into the atmosphere. AtlantaProducts Cavagna
Exhibitor:
Cavagna Group
Booth #1110 





Hose-End Valve
The RegO A7914 2-in. FNPT x 3¼-in. ACME low-emission hose-end valve for loading bobtails and transports is designed to reduce the amount of product vented when disconnecting their loading hoses to less than 2 cc, in compliance with CARB regulations. AtlantaProductsGEC RegOhose endvalve
Exhibitor:
Gas Equipment Co. Inc.
Booth #836 

Compact Regulator
The Excela-Flo compact first-stage F-POL  domestic regulators, MEGR-1222H series, offer a compact design for use in tight applications such as underground tank domes. They feature an adjustment range of 9 to 12 psig and have molded lip fabric-reinforced diaphragms and precision-machined orifices to minimize freeze-ups. Exhibitor: Marshall Excelsior
Booth #436
AtlantaProducts MECcompactregulator


Skid-Mounted Dispenser AtlantaProducts Bergquista
Bergquist Inc.’s D2AFF Trinity skid-mounted dispenser features the new 1000-GWC Trinity autogas skid tank with the valves mounted on the side of the tank for easier access. The tank also has bottom openings. The unit is fully piped and wired for easy site connection, and has a Corken high-differential turbine pump. All three tank connections are protected with internal valves equipped with pneumatic actuators. Its integral purging system with three-way ball valve permits faster cylinder purging and low-emission transfer valves minimize discharge during disconnect. The unit features a diamond-plate aluminum cabinet, double doors, and slide-back top. The dispenser may be used for both cylinder and autogas filling.
Bergquist Inc.
Booth #502

The new products aren’t just in the Innovation Pavilion, though.
Here are just two that attendees can see on the Expo floor…

Cylinder Inverter AtlantaProductsAmericanStandard
American Standard Manufacturing (ASM) has introduced a new, improved second-generation air-powered propane cylinder inverter. It features the same simple design as the original Little Giant, with an innovative air-powered lifting/turning system. It operates on compressed air, with no electric motors or switches. The inverter has the capacity to handle one 420-lb tank or dual 100-lb tanks.  
Exhibitor:
American Standard Manufacturing
Booth #1036

Tank Monitor
The Ecogreen Tank Monitor is a wireless, solar-powered monitoring and communications unit and software system that shows graphically current tank location and level as well as level history. It features “days to empty” forecasts based on recent usage and remaining fuel in the tank.
Exhibitor:
Shipley Energy
Booth #1326
AtlantaProducts ShipleyEnergy

2015 Autogas Pavilion
Amtrol will display its autogas cylinders, offered in bed-, trunk-, and frame-mount configurations that fit most makes and models of cars and trucks. The cylinders meet all ASME Section VIII, Div. 1 standards, and comply with NFPA 58 standards for motor fuel tanks. They are made in the USA. AutogasPavilionAmtrol

Kentucky Propane Education & Research Council will exhibit its 2014 Dodge Charger Pursuit, a police-specification vehicle equipped with the 5.7-L Hemi engine. A Prins VSI bi-fuel conversion has been installed. The auto will be used in Kentucky to demonstrate the effectiveness of propane autogas for first-responder fleets.
 
Ecopower Technologies will show its alternative-fuel race car that has won seven world speed records. It will soon attempt to set a 300-mph record using the latest Ecopower Technologies B&I Quad PAC injection system. The injection system is the prototype extension of Ecopower’s patented technology. The gasoline/diesel, pressure- or vacuum-frequency induction system will be part of the research completed during this year’s attempt to set another record.
AutogasPavilionEcopower

Autogas Pavilion Presentations
In addition to showcasing various propane-fueled vehicles and equipment, the Autogas Pavilion will feature eight hours of presentations from its exhibitors. Here are the scheduled exhibitors:

Alliance AutoGas/Blossman Gas
AmeriGas
Amtrol Inc.
Bergquist Inc.
Blackmer, Part of Pump Solutions Group
Cavagna North America Inc.
CleanFUEL USA
Corken Inc.
EcoPower Technologies Inc.
IPS Equipment Inc.
Kentucky Propane Education & Research Council
Manchester Tank & Equipment Co.
Next AutoGas
Powertrain Integration
Ray Murray Inc.
Roush Cleantech
Superior Energy Systems Ltd.
Tarantin Industries

Propane Caucus Among 3 NPGA Growth Initiatives

Now that the propane industry has survived the past winter season in good shape, and the Propane Education and Research Enhancement Act is now law, the National Propane Gas Association (NPGA) is refocusing its attention on accelerating growth in gallons sold. A Congressional Propane Caucus is one of several methods it will use to achieve that goal.

Many people became acquainted with propane for the first time during the supply and infrastructure situation of the winter of 2013-2014, and NPGA is planning to take advantage of increased propane awareness by establishing a Congressional Propane Caucus, said Phil Squair, NPGA senior vice president of governmental affairs. The Congressional Propane Caucus will be a tool to help members of Congress who care about propane keep up with industry issues. Work to implement the caucus, which will have a Republican chair and Democratic co-chair, is in its beginning stages. NPGA is in preliminary discussions with members of Congress who might serve in those leadership roles.
Squair Elections for photos 1

Squair pointed out that the Congressional Propane Caucus would be a group that the propane industry could turn to for help on various issues such as contacting the U.S. Department of Commerce (DOC) for information on the status of its work that would restore the public education programs of the Propane Education & Research Council (PERC).

“We would immediately have a ready-to-go group of individuals that knew about propane issues and cared about propane issues, and we would be able to go to them and say, ‘Here’s the latest, here’s the status of what’s going on in the field, or conversely, here is something we’d like you to help us with,’” Squair noted. “We would have a ready-made list of offices that were interested and knowledgeable about propane. That is going to go a long way toward knowing who understands propane and who we can go to for these types of things. If there are things we don’t want to have happen and that would affect us disproportionately from, say, other energies, we could go to the propane caucus and say, ‘This is a bad idea, we wanted to give you a heads up, maybe this is something we can work on to change it.’”

Appropriations is a second area of focus that NPGA will use in its efforts to increase propane industry gallon sales. Enhanced government agency outreach was part of the association’s Vision 2014 initiative to grow the industry. The supply and infrastructure issues of winter 2013-2014 slowed some of the momentum of Vision 2014, but NPGA will make a renewed effort to work with agencies that fund research to help the private sector with research and development of new technologies.

On March 2 and 3, NPGA, along with representatives from AmeriGas, Ferrellgas, and Blossman Gas, met with staff members for several U.S. House members who serve on the Energy and Water Appropriations Subcommittee of the House Committee on Appropriations. During these meetings, NPGA made requests related to propane autogas and residential combined heat and power. The propane group also let the Hill know that when DOE program managers write solicitations for proposals from the private sector, propane is often not welcome in those discussions. The managers enter those discussions predisposed to accept only natural gas and biofuels. The propane group argued that propane should be part of the discussion in bidding for grant dollars.

“We’re asking for parity when the energy and water appropriations bill moves up on the Hill,” Squair explained, adding that he is optimistic that the managers were receptive to the argument.

Tax credits are an additional area of focus on growth. NPGA is pushing the U.S. Senate Finance Committee and House Ways and Means Committee to extend the expired 50-cent-per-gallon alternative-fuel tax credit and alternative fuel refueling infrastructure tax credit and to reform how propane’s excise tax is calculated so it is based on energy content.

Squair acknowledges that Congressional discussions on tax credits are in the background at the moment because of discussions taking place on reform of overall corporate and individual taxes. The propane industry has communicated with Congress in favor of tax reform, but Congress members are currently hesitant to take a position in favor of or against tax credits and extenders. “So the tax extenders debate is sort of a quiet debate right now because we’re letting the broader decisions related to reform go first,” Squair said.

Talking to BPN in early March, he mentioned the public education restriction on PERC, noting that a final resolution might be coming any moment. He has heard that DOC was at the tail end of its new calculation on whether the price for consumer grade propane compared to an index of prices of competing fuels exceeds a certain threshold, which in 2009 triggered a restriction on PERC’s consumer education programs.

“It could be a matter of days, we hope, before we have a final announcement that the issue is resolved,” Squair added.     —Daryl Lubinsky

Additional Work Truck Show Highlights


Todd Mouw of ROUSH CleanTech also spoke to recent Work Truck Show attendees about the company’s medium-duty offerings, highlighting the E-450 product. He listed airports, food and beverage companies, logistics companies, paratransit companies, and schools as being among the various industries using the product. Airports, food and beverage companies, governments, transit companies, schools, and energy companies are users of its F-450, F-550, and F-650 propane applications. He said ROUSH CleanTech now has more than 7800 propane autogas vehicles on the road.

Brian Peltier, senior fleet buyer for Schwan’s Home Service (Marshall, Minn.), spoke on idle management technology. Of his company’s approximately 4500 home delivery trucks, 70% run on propane. The business conducted a pilot test of remote vehicle analytics telematics to review engine idle times on its trucks and came up with a conservative annual cost estimate of $125 per propane-fueled vehicle for engine idling.

PERC’s Tucker Perkins spoke at the Green Truck Summit and showed photos of various fleets that use propane autogas, including Thyssenkrupp Elevator, SuperShuttle, and the city of Sandy Springs, Ga.

School buses were a topic of discussion during several propane industry presentations at the Work Truck Show. Todd Mouw, vice president of sales and marketing at ROUSH CleanTech, showed a quote from Bluebird Corp. stating that 73% of school bus customers say their purchasing decisions are based on vehicle reliability and service. If that is the case, propane is doing well in that arena now that all three major manufacturers — Blue Bird, Thomas Built, and IC Bus — offer propane products. PERC’s Perkins told BPN, “This market is brand loyal, and having BlueBird, Thomas Built, and IC with propane products will ensure the adoption of propane fueling in this segment.”
S2G Bobtail for photos 3

Perkins is happy to see Freightliner Custom Chassis Corp. (FCCC) expanding its S2G offering beyond the two platforms it unveiled last year, the propane bobtail and crane/utility application. This year, FCCC is showing the S2G chassis in a box application, which Perkins noted will have strong application for freight, and appeal to a much wider range of users. “We are excited to see continued understanding of the propane option for FCCC engineering and marketing and expect that 2015 will see tremendous growth in unit sales.”     —Daryl Lubinsky

Work Truck Show Illustrates Major Strides for Propane Autogas

Last month’s Work Truck Show and Green Truck Summit in Indianapolis was a great platform to demonstrate how far the propane autogas industry has come in the past few years. The news at the event that textile and rental supply company AmeriPride purchased 20 propane autogas-fueled Roush CleanTech Ford F59 delivery trucks served as just one example of the progress autogas has made, as did Alliance AutoGas’ announcement that the Ford Transit 3.7L engine conversion to propane autogas is in development and was expected to go in for EPA certification this year. Those were just a part of propane’s exposure at the Work Truck Show, which saw record attendance of more than 11,000.
WorkTruckShow1

Tucker Perkins, chief business development officer for the Propane Education & Research Council (PERC), remembered that the propane industry in recent years could talk about taxis, pickup trucks, and some vans at the Work Truck Show, which is an event geared more toward the medium- and heavy-duty truck market. But the industry did not have any medium-duty trucks or beverage delivery vans to feature at the show. That’s a much different case now.

“I think back about three to four years ago, and we were clearly trying to establish credibility,” Perkins said. “Now we have credibility, and we’re just trying to continue to enhance it.”

PERC’s activity at the show was an indicator of propane’s increased movement in the medium-duty market. Ford, General Motors, Chrysler, Freightliner, and Roush CleanTech discussed propane products with PERC at the event, but Perkins noted that various additional companies met with council staff at the show about future partnerships.

He added that PERC in recent months has been talking less about competing with natural gas and more about how propane compares to diesel and gasoline. The propane industry’s alliances with well-established companies such as Freightliner and Ford in the medium-duty arena have boosted propane’s status in those discussions. The fact that AmeriPride is moving to propane vehicles reinforces to other industries that large companies see propane as a better alternative to diesel and gasoline.
WorkTruckShow2

The AmeriPride deal is also significant because it’s the first major propane partnership announcement since gasoline and diesel prices fell so steeply. But propane prices fell as well, so the positive comparison to gasoline and diesel did not change much. Fleets often have a herd mentality. They don’t want to be alone. When fleet after fleet chooses propane, that makes it easier for the next fleet to choose it as well.

“We’re happy that Roush CleanTech and Ford got a nice deal, happy that a company with an impact of AmeriPride chose it, and we’re happy to announce it at that show so other fleet managers can take comfort in it too,” Perkins stated.

Alliance AutoGas’ notice at the Work Truck Show that the Ford Transit 3.7L engine conversion to propane autogas was in development was important because the Transit is a significant vehicle in the commercial fleet segment. Perkins noted that getting that product out in the marketplace is a good move because it is well-engineered, EPA-certified, and distributed throughout the country. Blossman Services Inc., a subsidiary of Blossman Gas Inc., is the equipment distributor for Alliance AutoGas. Blossman Services president Ed Hoffman told BPN in an interview following the Work Truck Show that the Transit, which replaced Ford’s E-Series vans, will be a revolutionary vehicle in the medium-duty arena for the next eight to 10 years. He noted that the E-Series had been a key vehicle in that segment since at least the early to mid-1980s and has been a significant propane autogas product because of its high use among fleets for delivering packages, transporting passengers, and many other applications.

“The Transit product is the new updated version of that, so we knew we had to be part of that evolution,” Hoffman stated. The Transit will be the first “plug-and-play” conversion to be installed by Alliance. Hoffman noted that plug-and-play in this case means no wire cutting is necessary. “Everything is unplugging one component and plugging ours in. So there’s no need for any type of advanced wire cutting or soldering skills. It’s simplicity and more consistent quality. With our solution you basically unplug one wire, one harness plug. Ours plugs in and you’re ready to go. No multiple connections are needed.”

In addition to the AmeriPride/Roush CleanTech and Alliance AutoGas/Ford Transit announcements, propane made its presence known at the show in various other ways. PERC held a training session at the Green Truck Summit, which took place the day before the Work Truck Show. PERC’s event was a forum for fleet managers and other propane users to share their experiences with prospective customers. Presentations took place in multiple classroom settings throughout the day. In one session, representatives from Freightliner, Roush CleanTech, and Blossman Gas spoke about their propane vehicle offerings.

Bill Davis, director of the National Alternative Fuels Training Consortium (NAFTC), spoke about “Prepping Your Shop for Alternative Fuels” and included LPG, CNG, LNG, and hydrogen. Lynn McLean, president of McLean Consulting & Associates, who works with the Flint, Mich. Transit Authority, made a favorable case for propane when he compared the costs of running his diesel fleet and his propane fleet.

Along with representatives from the electric vehicle, natural gas, and biodiesel industries, Perkins spoke to about 400 attendees on the propane industry’s achievements in 2014 and expectations for 2015.

He said the Work Truck Show alleviated his concern that low gasoline prices would make fleet managers choose gasoline-fueled vehicles over propane. Fleet managers see the volatility of gasoline prices and the total cost of ownership advantages that propane has over diesel.
“I’m thinking that everyone is making their purchasing decisions knowing full well that propane is a safe choice, and we’re glad to see that,” he stated, adding that additional announcements of fleets moving to propane will take place at the ACT Expo May 4 to 7 in Dallas.

The AmeriPride Story
As gasoline prices increased in 2013, AmeriPride began looking at various alternative fuels to reduce the company’s fuel expenses and emissions. The company looked at CNG, hybrids, and pure electric in addition to propane. Banny Allison, fleet manager of AmeriPride, told BPN that it chose its Topeka location as a good place for a pilot program of five Ford F-59 trucks running on propane. The area has very little infrastructure for natural gas. Ferrellgas (Overland Park, Kan.) placed a 1000-gal. propane tank at AmeriPride’s Topeka site, and the pilot program began in the fall of 2013. Ferrellgas took care of the permitting process, and Allison held meetings with a local fire marshal.

With the exception of a minor check engine light issue that Roush CleanTech fixed after discovering a loose wiring harness connection, the pilot program went well. Allison said each vehicle runs about 75 to 225 miles per day, with anywhere from 25 to 40 customer stops per day. Vehicles deliver clean laundry and pick up soiled laundry, and the company serves about 150,000 customers per week.

Of the 1800-vehicle fleet, 95% run on diesel. The company is currently conducting pilot programs with CNG and electric vehicles. “Different vehicles work in different markets, based on varying factors such as mileage,” Allison said, adding that in addition to the differential between diesel and propane prices, the high mileage that the vehicles in Topeka travel has allowed the fleet to recoup the approximately $18,000 cost to upfit the vehicles, plus the cost of the fueling station.

He learned during the pilot program the benefits of locking in a fuel price. When prices shot up during the winter of 2013-2014, the company had not locked in a price for propane. Its bottom line was not affected much because of the small number of propane vehicles, but it definitely caught Allison’s attention and taught him the benefits of locking in a price.

For its Topeka site and its future site in California that will also use 10 of the vehicles, the company has locked in a propane price for next winter. It chose Sacramento for propane vehicles because of the lack of natural gas infrastructure and also to deal more easily with California’s diesel emission regulations.

How are the company’s drivers adapting to propane vehicles? They can’t tell any difference, other than the training they received from Ferrellgas on fueling the trucks.

Allison added that the company also saves because of the approximately 20% energy density difference between propane and gasoline, which is one of various reasons the company might add more propane vehicles in the future.

AmeriPride’s move to propane is another step in Roush CleanTech’s continuing move into the medium- and heavy-duty vehicle market, said Todd Mouw, vice president of sales and marketing at Roush CleanTech. “This is just another example of a medium-duty vehicle where the customer burns a lot of fuel and is looking for a solution, and propane autogas and Roush CleanTech worked out really well for them.”

Alliance AutoGas’ Offerings
Before becoming president of Blossman Services this past July, Ed Hoffman had experience in operating a fleet of bi-fuel propane autogas and other alternative-fuel vehicles for Keystone Automotive (Exeter, Pa.). Operational efficiency was one of his main goals at Keystone, and in overseeing Alliance’s development of the Ford Transit 3.7L engine conversion to propane autogas, he improved efficiency again, reducing the propane system’s installation time by half — about six hours — compared to a typical 12- to 14-hour installation time for the Transit’s predecessor, the Ford E-Series.

Hoffman believes that like the E-Series, which Ford produced for decades until last year, the Ford Transit will be a revolutionary vehicle for fleets.

“[The E-Series] has really been the workhorse, or one of our most successful autogas products, because of its fleet usage, for delivering packages, delivering people, there’s so many places it fits in,” Hoffman stated. “The Transit product is the new updated version of that, and we knew we had to be part of that evolution.”

The bi-fuel product will also offer extended range capability of 450 miles compared to 250 miles for its predecessor. Alliance AutoGas adds the propane system with a 21-gal. propane tank to the existing 25-gal. gasoline tank. Alliance also increased its warranty on the system components from three years or 36,000 miles to five years or 100,000 miles. The Transit will come in three versions: a cargo van, a wagon, and a cutaway.

Alliance is also developing a Ford Explorer police vehicle, a Ford F-650, and an Isuzu NPR with the same warranty and efficient system installation.

Alliance AutoGas’ Transit and Roush CleanTech’s AmeriPride announcements were just two reasons to be excited about propane’s showing at the Work Truck Show, said Perkins. He saw heavy activity at the Freightliner booth, and he is seeing “continued maturing” of Freightliner in understanding how to sell a propane vehicle.

“We’re really excited that [Alliance AutoGas] was there and able to talk about their [bi-fuel autogas system], and we could talk about an EPA certification in that technology. We’re thrilled to see AmeriPride team up with Roush CleanTech and Ford and bring a new industry, linen, to a list of satisfied users. And I think just in general I’m really glad to see propane sprinkled around the show and fleet managers now considering propane as a fuel they need to look at if they’re thinking about moving away from gasoline and diesel.”    — Daryl Lubinsky