Skip to comments.UPS delivers a boost to propane as vehicle fuel
Posted on 03/17/2014 4:30:24 AM PDT by thackney
Most people especially Texans know propane as the fuel source that allows them to fire up a backyard barbecue in seconds.
Now its also heating up as an alternative motor fuel, as companies with vehicle fleets embrace its lower costs and smaller environmental footprint relative to gasoline or diesel.
Shipping company UPS announced plans this month to spend $70 million on 1,000 propane-fueled vehicles and 50 refueling stations in the United States, where the company operates about 77,000 ground vehicles.
Other big companies also have added propane to their fuel mix.
Airport transportation service SuperShuttle touted its propane vehicles earlier this year, saying its 160 propane vehicles, including 30 in Houston, are reducing fuel costs by as much as 60 percent.
Last year, DirecTV announced plans to include more propane-fueled vans in its repair and installation fleet.
And in recent months, school districts in Texas, Arizona and Montana have announced the purchase of propane-powered buses.
The increased attention on propane, also known as autogas or liquefied petroleum gas, comes as the country enjoys a boom in domestic energy production.
Propane is a byproduct of natural gas processing and crude oil refining. Primarily used for home heating and cooking, transportation represents just 2 percent of the fuels domestic use, according to federal estimates. But that may be changing.
Its starting to make a lot more sense, given the boom in domestic production, said Roy Willis, CEO of the Propane Education & Research Council, an industry group.
It is generally less expensive than gasoline, according to the Department of Energy, and emits fewer air pollutants and greenhouse gases.
The cleaner burn also extends engine life, advocates say.
If youve got longer engine wear, the economics of that power system really goes to the bottom line in a beneficial way, Willis said.
Still, when it comes to alternative fuels for vehicles, compressed natural gas typically generates more buzz than propane. Texas energy magnate T. Boone Pickens is a cheerleader for CNG; propane has no such iconic champion.
And some of the worlds largest companies produce and supply natural gas, while propane typically draws smaller players.
UPS officials say they were motivated to consider propane because of a desire to make a positive environmental impact, and also to save money.
They say the new vehicles will collectively travel more than 25 million miles and replace 3.5 million gallons of gasoline and diesel annually.
Mike Casteel, director of fleet procurement for UPS, says the company expects to pay $1.25 to $1.50 per gallon less for propane than for gasoline. A gallon of propane will only take a truck about 75 percent to 90 percent as far as a gallon of gasoline, but the savings still can amount to $1 per gallon or more. He also said the company believes growing domestic energy supplies will keep long-term propane prices stable.
Cost of fueling stations
UPS believes propane-powered vehicles could be more economical in some situations than compressed natural gas. Both fuels are less expensive than gasoline, but Casteel said propane fueling stations are cheaper to build than CNG stations.
It costs $37,000 to $175,000 to build a propane station, according to the Department of Energy, while a CNG station can cost millions of dollars.
Casteel says that price difference is especially significant for UPS, since it plans to use the 1,000 new propane vehicles in rural locations in Oklahoma, Louisiana and elsewhere.
In a big city hub with a large UPS fleet, a CNG facility might have made sense. Only 20-40 vehicles will use each of the new propane facilities, Casteel said.
Propane stations are simpler, Casteel said, partly because the fuel is stored in above-ground tanks and delivered by truck, so it doesnt require pipelines.
Rhea Courtney Bozic, principal of Clean Fuels Consulting, a New York company that helps companies plan alternative fuel fleets, said a growing number of manufacturers have been producing the components needed for propane vehicles, which might be helping to generate interest in the fuel. And the industry has improved its marketing of propane as a transportation fuel, she said.
Still, despite the move by UPS and others, propane vehicles represent just a fraction of vehicles on U.S. roads about 140,000 of 250 million, according to the industry and the Energy Department.
Larger fuel tanks
The technology isnt perfect. Propane has slightly less energy content than gasoline. That means vehicles need more fuel and larger tanks to go the same range, according to the Environmental Protection Agency.
Whether purchased new or converted to use the fuel, propane-powered vehicles like most vehicles running on alternative fuels can cost thousands of dollars more than their gasoline equivalents. And cold weather earlier this year caused some propane users to suffer from spikes in their fuel costs.
Willis of the propane council said companies that have big fleets of propane vehicles tend to have long-term fuel contracts that insulate them from short-term price fluctuation.
The cost of the fuel for fleets is very predictable, he said.
I wish there were a lot of Hank Hills out there selling propane and propane accessories that would allow me to use propane in my vehicles. I’ve known about it for decades, there used to be a propane company in town that had their delivery trucks hooked up to run off of the fuel they were delivering, this was back in the ‘60s and those trucks would typically go 300 or 400 thousand miles before needing any work. This was back when cars were worn jam out, as folks would say, at 100 thousand or less!
Uh huh. Till his company raises the demand and propane, which is already high, goes higher. I'm paying $2.70 a gallon for heating my home. I'm lucky I got a contract but I can tell you that my gas co. will NOT see a loss for next year. I bet my next contract offer will close to $3/gallon.
I believe the major problem with propane is ultimate limited supply. There is only a given fraction of propane in any gas or oil well. Once it is removed, larger quantities are difficult to obtain. If every vehicle used propane, the cost of propane would sky rocket.
I believe a greater demand for propane will ultimately result in more steady pricing. Currently the US produces more propane than we use domestically.
The “wet” Natural Gas shale production contains significant propane and other natural gas liquids. Exports of LNG (pure methane) would lead to increased production from these fields and result in more propane production domestically.
I don't think there is ever any chance of that. More of a trimming of the peak than replacing the entire gasoline supply.
There was a time when almost all indoor forklifts were propane or electric powered as well. Advances in electrics has seen the old worn out propane towmotors fade away, mainly because of the cost of propane.
I wish they had opted for CNG instead of propane. Propane is useful for too many other things that methane is not, like home heating and chemical feedstock.
I am surprised that companies are not jumping over to this fuel if as much as 60% fuel savings can be obtained? Wow!
Back in the 70’s we all were running propane and gas. You could sure tell the power difference when you switched over.
Not being an expert, I am just happy to see companies like UPS experimenting with alternate sources for fuel. I know that propane like CNG has less BTUs than gasoline, but if a company like UPS can achieve any savings, it could lower shipping costs. An added benefit could possibly be a future reduction of diesel and gasoline use nationwide, which could lead to lower prices. An added benefit is’ A private company is doing the experiment, not the Federals doing it on our dime.
They are using CNG as well. They haven’t picked a single alternative fuel source, at least not yet.
UPS has one of the largest private fleets of CNG vehicles in the U.S., with more than 965 package delivery vehicles. UPS began extensively using CNG in 1989 to assess its benefits and viability as an alternative fuel.
I would expect a difference between a gasoline engine running on propane and an engine built for propane.
Schwann’s delivery trucks have been running propane for many years. SemGroupCorp of Tulsa is their supplier.
I suspect your right! The conversions now should be allot better. I still think CNG will be the future but at my age I may not get to see it.
Oil never contaminated by blow-by so it always looked clean and plugs never showed wear ever. It is a great motor fuel. Mileage was about 80% what one expects on petro, but at the time was cheaper than gas by a bunch.
I'd do it again someday with an older small 4 cyl carb intake pick up and hide tow-motor jugs in the bed toolbox that are filled from the bulk tank in the back yard, as many already do here. Dri-Gas!
Of course you know this a lot of the Shale Plays don’t have any propane in the gas. Haynesville gas typically runs about .990 on BTU’s if it was not for the high CO2’s and H2S the gas could go unprocessed except for removing the water. I know that our Waskom plant sold all the propane it could this winter because of high demand.