Smaller companies join move to natural gas vehicles

HOUSTON — Natural gas has become the fuel of choice for several large companies with vehicle fleets. Now, smaller firms are beginning to catch on to the trend, too.

With a little nudging, companies that don’t have their own refueling stations are finding ways to start moving their goods and workers on natural gas.

“The fact that it’s $2 a gallon cheaper makes it a no-brainer,” said Mike Little, director of transportation for Bryan-based Mid South Baking, which delivers buns and other products to quick-serve restaurants across the South.

On an energy equivalent bases, diesel costs around $3.65 per gallon in Houston compared to around $2.19 a gallon for natural gas, according to data from AAA and Houston-area natural gas stations. Natural gas has been more than $2 cheaper than diesel at times over the last two years.
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Fuel savings that large have meant a lot for The Woodlands-based NewTexPlumbing, said William Collora, who owns the company.

“We can beat the competition with the savings we get on our trucks,” Collora said. “We’ll be more competitive than they will be and that’s the goal.”

National giants including AT&T, UPS, Waste Management and Frito-Lay have committed hundreds of millions of dollars to buying natural gas vehicles. AT&T alone spent $350 million by the end of last year for a fleet of more than 8,200 natural gas vehicles, according to the company.

But while big business has been able to invest in building refueling stations and buying vehicles that can benefit from the deep price discounts for natural gas, the option hasn’t been as accessible for smaller companies and consumers.

Now, as more natural gas refueling stations are beginning to sprout up in Texas and around the country, the fuel is catching more interest from companies of all sizes.

The number of publicly accessible compressed natural gas refueling stations has jumped by about a third nationwide since 2012, to 664 stations, according to data from the U.S. Department of Energy. Most fleets run on compressed natural gas. Some long-haul trucks use liquefied natural gas, which is more expensive but also more dense, enabling trucks to carry more of the fuel.

As early adopters begin enjoying the benefits of natural gas, other companies may follow suit, said Mark Gamber, a Houston account manager for Clean Energy Fuels Corp., which owns refueling stations nationwide.

“It’s the whole snowball effect,” Gamber said. “As a fleet starts to do it, their competitors see that they’re doing it and they look at why they are doing it.”

Economic considerations are the main motivation for making the switch.

Apple Towing, based in Houston, has six natural-gas powered vehicles in its fleet of 35 trucks, said general manager Don Royal.

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The company spent about $1 million on diesel fuel costs annually, but is looking forward to lowering that tally with natural gas, Royal said.

“It’s just gone up and up and one of our biggest expenses is the doggone fuel,” he said. “So we’re just trying to cut expenses and that’s one of the ways to do it.”

More demand for the fuel for transportation purposes could help boost profits for natural gas companies — including Houston-area producers Anadarko Petroleum Corp. and Apache Corp., which have been at the forefront of efforts to promote the fuel for vehicles.

Houston-based Lodge Lumber, which has a fleet of eight trucks, began using its first compressed natural gas-powered vehicle last year. The truck is decorated with a specially printed wrap that touts the company’s use of “clean burning natural gas” in greens and blues. Natural gas vehicles produce fewer greenhouse gas emissions than vehicles running on other fossil fuels.

The annual fuel tab for the new truck will be about $11,000, 40 percent less than what it would have cost running on diesel, said J.W. Lodge, vice president of operations for Lodge Lumber.

A nearby refueling station helped Lodge Lumber make the leap to natural gas, Lodge said. Encouragement from Clean Energy Fuels Corp., which owns the station, helped Lodge see the advantages, he said.

“If that station was 20 miles or 30 miles away, in another part of the city, it probably would have made the decision much tougher and we probably wouldn’t have gone with a CNG vehicle because of the fueling infrastructure,” Lodge said. “But we were just lucky that we had a refueling station close to us.”

There were some obstacles for the type of truck that Lodge wanted. Natural gas versions of vehicles can cost more than their diesel counterparts by as little as $7,000 or as much as $40,000 for some long-haul tractor models. The truck Lodge sought out cost about $160,000 — $70,000 more than its diesel version, he said.

Lodge got help from the Houston-Galveston Area Council, which issued a grant to cover the cost difference of the vehicles over the course of five years. The grant requires that Lodge Lumber use the vehicle within the region and commit to driving it for a specified amount of the companies’ operating miles to reduce emissions, Lodge said.

Other companies, including NewTexPlumbing and Mid South Baking, switched to gas without grants.

Mid South Baking leased two long-haul trucks running on natural gas in October for its fleet of 49 big rigs, said Little, the transportation director.

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The fuel cost savings involved with the newly leased trucks has helped Mid South Baking save money while also covering the increased lease payments involved with the natural gas vehicles, Little said.

He came to the decision following discussions with Katy-based CNG4America, which recently opened a natural gas refueling station in Bryan and plans to open five more stations in Texas by the end of the year.

When it comes to performance, Mid South Baking and its drivers so far have been happy, Little said.

“If the equipment continues to perform as well as it has, I see no reason why we wouldn’t be expanding the use of natural gas in our fleet,” he said.

Ten of NewTexPlumbing’s 65 vehicles now run on natural gas, owner Collora said. The company’s savings with the fuel convinced him to install his own refueling pump at the company’s headquarters.

That has produced additional savings. The natural gas equivalent of a gallon of diesel now costs NewTexPlumbing about 85 cents, compared with about $2 at retail natural gas refueling stations nearby, Collora said.

“I’m trying to do everything on natural gas,” he said. “I could see it taking off.”


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