September 2012, Business Fleet - Cover Story

Do-it-Yourself CNG

While the new revolution in natural gas-powered vehicles is just starting, these small fleets have been using them effectively — and reaping an ROI — for years.

By Chris Brown

While federal tax credits are no longer available for natural gas vehicles, some fleets are taking advantage of state and local incentives, which range from vehicle purchase tax credits and tank installation rebates to breaks on registration and HOV lane access.

From a frozen pizza company to neighborhood ice cream delivery, from a dry cleaner to a real estate business, these small fleets have been running natural gas-powered vehicles (NGVs) for years.

Company owners cite various reasons for making the switch to compressed natural gas (CNG), among them the fuel’s environmental benefits, rising fuel prices and the need to limit foreign oil.

While each fleet took a unique path to implementation, they all have one thing in common — a positive return on investment (ROI).

Why Switch?

“In 2008 we were taking it on the chin on fuel costs compared to what we had expected,” says Bob Wisz, owner of Doreen’s Pizza Inc. in Chicago. “So we had to look for an alternative because, while gas prices may fluctuate back down temporarily, we figured $4 to $5 a gallon will be the norm.”

Tom Renwald, owner of Summer Song, a neighborhood ice cream delivery business in Indianapolis, knew he needed to do something about fuel for his drivers. “It’s hard for my drivers to pass the cost on to the customer,” he says. “You can only charge so much for ice cream. In our business, fuel has become a do-or-die thing.”

Serving Illinois and Northwest Indiana, Lansing Cleaners Co-Owner Tom Ustanik warmed to the idea of natural gas because the cleaner-burning engines would give him double the engine life over regular gasoline-powered engines. As well, CNG fits in with the company’s environmental initiatives. Ustanik says his company is one of the greenest in the field and is one of “a handful” of dry cleaners in the country that clean with liquid CO2.

Danya Butter and her husband Joseph have five CNG vehicles to service her real estate business in Kansas and Missouri, and to help defray the cost of his commute. While the Butters have a home-fueling system, they say it’s easier and quicker to fill up at their local public station. They pay about $1.25 gas-gallon equivalent (GGE) at home and $1.69 at the public station.

For Joseph and Danya Butter, opportunity knocked when they found a used 2002 factory-built CNG Chevrolet Express van at a Phoenix, Ariz. auction with 20,000 miles for only $3,200. “I figured I could part the thing out for more than that,” Joseph says. The Butters, who have since moved to Olathe, Kan., now have a stable of five CNG vehicles to service Danya’s real estate business and to alleviate the cost of Joseph’s commute.

Still, others cite more immediate — and personal — benefits.

“I have a really long commute, so to be honest with you, the overriding concern for me was that it got me in the carpool lane,” says Rick Johnson, chief financial officer for Business Fleet’s parent company, Bobit Business Media in Torrance, Calif. Johnson bought a CNG-powered 2008 Honda Civic GX for personal use.

The CNG fleet operators interviewed run a mix of vehicles, from the Civic GX to pickup trucks, cargo vans, step vans and medium-duty trucks. The vehicles are powered by dedicated engines that run only CNG, or in the case of larger trucks, liquefied natural gas (LNG) or bi-fuel engines running CNG with either gasoline or diesel as backup. Some are factory models from the late-90s to mid-2000s; others are aftermarket conversions, while some fleets are testing the very latest OEM-produced bi-fuel trucks.