Ramping up to use natural gas as a motor fuel

In the 1990s, natural gas was promoted as the motor fuel of the future. Utilities opened refueling stations and government agencies traded in their dirty diesel trucks for vehicles fueled with clean compressed natural gas (CNG).

The Lower Merion School District committed itself in a big way. It converted half its fleet of 113 buses to natural gas. The U.S. Department of Energy, which subsidized the conversion, called it "Pennsylvania's primary success story for alternative fuels." It recently took delivery of nine new CNG buses.

But some early adopters of natural-gas vehicles took an exit off the highway to the future.

The first purple Philly Phlash tourist buses were fueled by natural gas, but they were replaced by diesel vehicles modified to look like trolleys. The Upper Merion Police Department gave up on natural-gas cruisers because of their limited range — officers ran low on fuel in the middle of their shifts — and they had to drive too far to find an open fuel station.

"We gave it a try, but our needs weren't met," said Lt. Jim Early of the Upper Merion police.

Perhaps the biggest casualty was Philadelphia Gas Works, the city-owned utility that has a stake in selling natural gas. PGW acquired more than 100 natural gas vehicles and built three fuel stations. But by 2008, it had disposed of its aging fleet and closed the refueling sites.

"It wasn't feasible for us to continue," said Barry O'Sullivan, a PGW spokesman. He said that manufacturers were no longer selling suitable CNG vehicles and that the price of natural gas in 2008 was too high.

How quickly things have changed.

Now, with natural gas selling for half the cost of diesel because of new production from formations like Pennsylvania's Marcellus Shale, government and industry are once again ramping up efforts to promote natural gas as a motor fuel.

President Obama and Gov. Corbett, citing the desire to reduce reliance on imported oil and promote domestic natural gas production, have endorsed plans to subsidize the build-out of a natural-gas fueling infrastructure.

On Thursday, the Pennsylvania Public Utilities Commission will hold a forum at Drexel University to explore policies to support investments in natural gas and electric vehicles.

Natural-gas advocates say they're focusing their efforts on encouraging operators of big fleets of heavy vehicles and long-haul trucks to convert to natural gas. High-mileage consumers can more quickly recover the higher cost of natural gas vehicles with the savings from natural gas, which sells for about $2 for the equivalent of a gallon of gasoline.

Gas producers say that shale-gas supplies will remain robust and prices stable for years, which they hope assures fleet operators that their investments in CNG vehicles will pay off.

"The new generation of CNG vehicles have gotten better as the technology has improved," said Richard R. Kolodziej, president of Natural Gas Vehicles for America.

Not everyone is enthusiastic. Some clean-air advocates, who had embraced natural gas vehicles because they emit less pollution than conventionally fueled vehicles, have grown uneasy with the vehicles because of the association with hydraulic fracturing, the vilified shale-gas production technique. They also say natural gas drilling emits large amounts of methane into the atmosphere, a more potent greenhouse gas than carbon dioxide produced from combustion.

"The president has proposed we switch trucks to natural gas, and I'm here to tell you today that every truck we switch to natural gas damages the atmosphere," Fred Krupp, president of the Environmental Defense Fund, said at the IHS Cambridge Energy Research Associates annual conference in March.

Some green-energy advocates also regard natural-gas vehicles as rivals to electric ones in the passenger car market, though the electric vehicles are not competitive for hauling freight because of the limited range of battery technology.

"You're not going to run an 18-wheeler with an electric vehicle," said Kolodziej.

The Lower Merion School District has used CNG buses since 1995. The initial appeal was to reduce complaints from residents about the pollution from the diesel buses.

"There's no longer a big plume of smoke when we start up the vehicles in the morning," said Gerald Rineer, the district's transportation supervisor.

The buses are also much quieter. "They hum," he said.

But the lower fuel costs are offset by the higher up-front cost for the buses — a natural gas bus costs about $134,000 compared with $104,000 for a conventional diesel. Natural gas vehicles also have higher maintenance costs, said Bryan Bohn, the district's lead mechanic.

Lower Merion's school buses each only rack up about 15,000 miles a year. Higher-mileage vehicles would generate a bigger fuel savings.

"If you're putting enormous miles on your vehicles, you have a payback of less than three years," said Kolodziej.

Big fuel savings have induced such companies as United Parcel Service Inc. and AT&T Inc. to move into natural gas vehicles.

One of the biggest adopters is Waste Management Inc., the nation's biggest trash hauler, which says that 80 percent of its new garbage trucks are fueled by natural gas. Waste Management opened a fueling station in Camden last year, where 80 of 100 trucks will use CNG by the end of June. The company plans to open a CNG station in Bristol later this year and one in Trenton in 2013.

"We're going all in on CNG," said George McGrath, a Waste Management spokesman.

The Waste Management stations are also open to the public, part of a growing network of stations to serve the market. Clean Energy Fuels Corp., associated with oilman T. Boone Pickens, operates 273 stations nationwide.

Demand for CNG is growing locally, said Cathy Engel Menendez, spokeswoman for Peco Energy Co.

Peco operates six refueling stations to serve the utility's 15 CNG vehicles, and five of the stations are open to the public. Peco had had only four outside customers who consumed a meager 120 gallons in January 2011. That has grown to 30 customers this year — some own more than one vehicle — who bought an average of 500 gallons a month, she said.