August 31, 2014

Energy Trends

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.

Perry says fuel stations are more expensive to build in Florida than in some other states because CNG is generally transported via pipeline networks, which Florida lacks. “We don’t use alternative fuel for home heating, and our fueling infrastructure isn’t as diverse and available as in other parts of the country.”

Perry adds that more fueling stations will mean “more vehicles in the markets where the economics make sense. So far, we see benefits to our customers, but it’s not yet all things to all people. The variables need to be understood.”

Meanwhile, several municipalities in Florida are looking into ways to use CNG-fueled vehicles to cut costs and contribute to a cleaner environment. In Leon County, the school district has begun changing its fleet to buses that run on CNG and partnered with Miami’s Nopetro on a CNG fueling station.

As part of the agreement, the school district also gets royalties from private users who fuel up at the station. Leon County says the district will transition its entire fleet of buses to natural gas within five to 10 years, saving taxpayers millions of dollars.

“This is the first example of highly utilized and successful state-of-art fueling station in a public-private partnership,” says Jorge Herrera, co-founder and CEO of Nopetro. Herrera says his company is on the verge of more partnerships in Florida. “I think every transit agency and school district will aggressively transition their fleets to CNG. They have dedicated routes and are high volume gas users so the conversion is a no brainer for them.”

Natural Gas and Florida

» While Florida is the fourth-most-populous state, it ranks third in total energy consumption.

» Florida annually consumes more than 728 billion cubic feet of natural gas.

» 85% of Florida’s existing natural gas use is in the electric utility sector.

» 59 of Florida’s 67 counties have natural gas services available for industrial, commercial and residential use.

Source: Florida Natural Gas Association

In January, the north Florida independent regional transportation planning agency for Duval, Clay, Nassau and St. Johns counties launched a CNG conversion initiative. It will spend about $750,000 to upgrade new municipal fleet vehicles such as buses and trucks to run on CNG, and it is pursuing partnerships with fuel providers to build CNG fueling stations. Its plans are to use the initial cost savings from alternative fuel to buy more alternative fuel vehicles. In the Panhandle, Pensacola Energy has been forming partnerships that are transitioning government vehicles to CNG.

In June, Miami-Dade County Mayor Carlos Gimenez announced that the county has drafted a proposal to replace its municipal fleet with CNG vehicles.

Jeff Greene has been at the forefront of introducing and promoting CNG use in Florida. He heads business development at Fort Lauderdale-based Wise Gas, operator of the first CNG fueling stations in south Florida. Today, Wise Gas operates Broward County stations that handle about 150 transactions a week — selling the equivalent of about 8,000 gallons of gas a month. It also built a station in Clearwater that fuels fleet vehicles for Verizon and the city of Clearwater and designed and built two private stations for city vehicles in Apopka and Palatka. Greene says his company is working on partnerships to build a half-dozen other stations around the state in cities such as Fort Myers, Sebring, Orlando, Jacksonville and Miami.

“CNG infiltration into Florida is a puzzle with 100 pieces,” Greene says. “You have to have customers, property, the right pressure of gas, a reasonable regulatory body, governments that want it, a utility that has to sign off on it and a revenue stream it deems appropriate.”

Jeffrey D. Korzenik, chief investment strategist at Fifth Third Bank who follows the natural gas sector, feels the trend toward natural gas will be similar to the nation’s previous transition to diesel. “Today, no one has hesitation to drive a diesel vehicle. I think the same thing will happen with CNG.”

Tags: Energy & Utilities, Technology/Innovation, Compressed Natural Gas

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