Area CNG backers optimistic about future growth

Mike Callan and John Robben are optimistic that the admittedly small shift in demand in the Fort Smith region for compressed natural gas (CNG) vehicles will blossom into a more robust market.

Fort Smith-based Arkansas Oklahoma Gas Corp. on Tuesday (June 7) held a formal grand opening of their CNG fueling station located in the AOG operations center (5030 S. S St.). It is the first public CNG fueling station in Arkansas. The public station is open open 24 hours, 7 days a week and is self-serve with a credit/debit card reader.

The event, which included smoked ribs for lunch, attracted a large crowd of elected officials, utility representatives, the media and area business owners interested in learning more about CNG use.

AOG received permission in November 2008 from the Arkansas Public Service Commission to sell natural gas for vehicles. In approving the facility, the PSC praised AOG “for its efforts to facilitate and encourage the use of natural gas as an alternative to fueling vehicles by gasoline and diesel.”

Callan, president of AOG, said about 1,300 gasoline equivalent gallons have been sold during April and May.

“That’s not a lot, but it’s certainly more than just one vehicle. … I’m happy with that start,” Callan said Tuesday.

The gasoline equivalent cost of compressed natural gas, based on recent natural gas commodity costs, is about $1.07 a gallon. Fuel mileage is equivalent, Callan said.
A CNG user buying 200 gallons of fuel a month will spend $214, while a gasoline vehicle owner with the same amount of fuel will spend — at $3.50 per gallon — $740. Annualized, that comes to a savings of $6,312, and CNG proponents also claim that natural gas motors require less maintenance.

Robben, general manager of Smith Chevrolet in Fort Smith, said in recent months he is hearing “a ton of interest” in CNG vehicles. With little to no marketing, he estimates about 20 potential customers interested in converting a light duty truck to CNG use.

“We’re sitting on go,” Robben said of the dealerships ability to convert vehicles.

AOG has worked with area dealerships (Chevrolet, Honda and Ford) in encouraging them to obtain the training and certifications necessary to install CNG conversion kits. Robben said the average kit cost on a Chevrolet light duty truck is $10,700. Costs vary for different makes and models, with the range being between $6,000 and $18,000.

“For the normal commercial vehicle use, at about 40,000 (miles) a year … the payoff is less than a year with the rebate,” Robben said.

But the rebate — 50% cash back on qualified conversions — is a problem. Arkansas lawmakers approved the rebate plan, but funding the cash back portion has yet to happen. Callan said he visited Monday with the office of Gov. Mike Beebe and believes Beebe “will be very, very helpful, as much as he can.”

“I think this (alternative) energy use is high on his (Beebe’s) list of priorities,” Callan said.

Also in attendance Tuesday was John Bethel, executive director of the Arkansas Public Service Commission, and Robert Booth, manager of the commission’s gas and water section. Bethel said he hopes the AOG facility will be the first of many in the state.

Indeed, public and private CNG stations are in the works in Damascus (Southwestern Energy), Little Rock, North Little Rock and Searcy.

“It’s starting,” Bethel said when asked what he thought of the momentum behind CNG.

U.S. momentum has been relatively lackluster. There are about 12 million CNG vehicles worldwide, with just an estimated 110,000 of those in the U.S.

AOG, which entered the CNG arena in 1982, has 38 CNG-powered vehicles in its fleet and has plans to retrofit more.