Rising Fuel Prices Making CNG Attractive Alternative

Natural gas as vehicle fuel is making incremental progress as corporate fleets, personal use and fueling stations grow.

But it can’t happen fast enough as economic forecasters are predicting $4 per gallon gasoline by early summer. In some parts of the country, pump prices could near $5 per gallon.

Corporate and government analysts say that Persian Gulf tensions and climbing crude oil prices are likely to contribute to the expected price hike.

Currently, statewide unleaded gas prices are hovering around $3.30 per gallon. Diesel fuel prices in Arkansas are about 25 cents to 65 cents higher, according to ArkansasGasPrices.com.

Last week, the Arkansas Energy Office announced new grants of $470,000 that will help launch two compressed natural gas (CNG) fueling stations in Arkansas. Satterfield Oil Co. will receive $235,000 to add CNG to an existing station in Conway. The city of Little Rock will receive $235,000 to add CNG to an existing fueling station.

There are already CNG fueling stations in Fort Smith, North Little Rock and Damascus.

“For Arkansas to make significant advances in alternative fuels, we need to build an infrastructure that supports their use,” said Gov. Mike Beebe (D) when the funds were released. “These new compressed natural gas stations will give more Arkansans easier access to another domestic fuel choice.”

The gasoline equivalent cost of compressed natural gas, based on recent natural gas commodity costs, is about $1.53 a gallon. Fuel mileage is equivalent. A CNG user buying 200 gallons of fuel a month will spend $306, while a gasoline vehicle owner with the same amount of fuel will spend — at $4.00 per gallon — $846. Annualized, that comes to a savings of $6,480, and CNG proponents also claim that natural gas motors require less maintenance.

CNG conversion costs vary for different makes and models, with the range being between $6,000 and $18,000. The average kit cost on a Chevrolet light duty truck is about $10,700.

Telecom giant AT&T is ahead of pace to meet its previously announced 10-year goal of replacing up to 15,000 vehicles with a fleet that uses alternative fuels. Earlier this week, AT&T hit the 5,000 vehicle mark nationally just three years into the initiative. The alternative fuel vehicles include service vans and passenger cars.

In Arkansas, AT&T says it has 74 vehicles in use that consume alternative fuels.

“In a short period of time, with the support of community leaders all over the country, we’ve invested in the deployment of thousands of advanced technology vehicles that promote cleaner air, use less fuel and help AT&T lower its operating costs,” said Jerome Webber, vice president, AT&T Global Fleet Operations.

Individuals are also pursuing CNG. Last month, Today’s THV reporter Lauren Scott profiled a Conway car dealership, Crain Buick GMC, that is promoting car conversions to CNG. State Sen. Jason Rapert (R-Conway) converted his truck to CNG for the advantages previously outlined.

“A lot of people drive their vehicle about 100-to-120,000 miles and they’re looking to get a new one. The wonderful thing about CNG is it burns so clean that the expectation is to maybe get twice the life on an engine that you’d normally get,” Rapert said.