The CNG revolution in Florida
Compressed natural gas is catching on in Florida as a fuel for truck fleets - but obstacles to more widespread use remain.
In January, beer distributor J.J. Taylor of Tampa announced it would begin delivering beer to some of its Florida customers in trucks powered by compressed natural gas. The company has CNG fueling stations in Tampa and says it will build additional stations in Fort Myers.
“When diesel started going crazy in price, it just made economic sense for us to do this,” says Jose Rivera, corporate vice president of administration for J.J. Taylor. “We have estimated in Tampa it will take less than three years to get our investment back. The more miles and diesel you use, the faster it pays off.”
With CNG costing up to 40% less than diesel, more businesses, municipalities, school districts and waste haulers in the state are adopting the fuel, which is domestically produced and emits fewer greenhouse gases.
At Waste Management of Florida, spokeswoman Dawn McCormick says the garbage hauler has 148 trucks running compressed natural gas and will have 211 by the end of 2014. Waste Management has opened fueling stations in Pompano Beach, Venice and Fort Walton Beach and plans to open one this year in Tampa.
McCormick says along with the cost savings, there’s another incentive for Waste Management to convert to CNG: “Our customers (cities and counties) are asking or requiring it. They are writing it into their RFPs (requests for proposals). Eighty percent of the trucks we’re buying going forward will run on CNG.”
CNG’s popularity in Florida still lags far behind its use in California, however, which has aggressively promoted CNG with incentives and rebates that offset the cost of retrofitting existing vehicles and building CNG fueling stations. California’s rebate incentives for buying or leasing a vehicle range from $3,000 to $32,000 depending on the size of the vehicle. There are more than 254 public and private CNG refueling sites in California.
In May, the Florida Legislature passed a bill that will award grants to commercial fleets. Rebates will be as high as $25,000 per vehicle, up to $250,000 per year for trucks put into service on or after this past July. In addition, there will be no state sales tax on natural gas for five years.
Incentives aside, the chief obstacle to more widespread use of CNG in Florida is lack of infrastructure. The state has just 41 natural gas fueling stations, including private stations, according to the U.S. Department of Energy Alternative Fuel Data Center. Only 14 are open to the public.
The distance between stations is crucial since CNG-powered vehicles must be refueled after about 250 miles — a much smaller range than diesel-powered trucks. The lack of CNG refueling stations means, at least for now, that only those operators whose trucks return to base daily can make CNG work for them. A major city needs about three fueling stations to make CNG more appealing, says Scott Perry, vice president supply management for Ryder Fleet Management Solutions in Miami. “If there’s only one station, it may be oversold in six months.”
Ryder, which hasn’t launched a CNG program in Florida, has created private/public partnerships in Arizona, California, Michigan and Louisiana. In total, it has more than 300 compressed natural gas and liquefied natural gas trucks operating for customers such as Dean Foods, Golden Eagle Distributors and Staples.