Prior to the Setember 3 ribbon cutting ceremony at Mount Vernon’s new Trillium CNG Fueling Station, Brad Couch of Ariel Corporation and Chuck Diehl of Smith’s Dairy presented a CNG 101 “class,” introducing compressed natural gas and its benefits and why it makes sense for fleet vehicles.
Couch introduced CNG as a transportation fuel for Ohioans and businesses in Ohio and explained the implications for commercial fleets and private individuals.
“America is built on choices,” said Couch, “We love our choices; we don’t want somebody to cram something down our throats, and if a choice gives us personal expression, like shoes or cars, it’s typically a good thing. A lot of times we typically forget the ramifications of our choices and what that can mean. So, why is that important?”
“Well in Ohio, it’s all about money,” Couch continued, “It’s all about jobs….In 2008, as a state we consumed $7 billion worth of energy, so when you think of what that would mean to Ohio, to take just a portion of that and make it our own energy that we are consuming and not consuming from another state or another country within our continent or worse, another country halfway around the world.”
To further the point, Couch asked, “When we buy a gallon of diesel (typically what is used for commercial fleets), where does it go?”
His slide presentation cited a $3.78/gallon price and he acknowledged that prices fluctuate around that price.
“The six month outlook,” he said, “is that a gallon of gasoline is going to be around $3.49 to $3.53, depending on the part of the country you’re in, so it will be slightly less than this [the $3.78], but the percentages will still be the same,” he added, indicating the slide.
Couch explained that 76 percent represents the commodity price of the fuel, there’s also refining and distribution costs and taxes. “Of the $3.78 price, $2.88 is typically the commodity. So if you look at that, and it happens to be petroleum that is from another continent, we’re sending, out of the $3.78, somewhere around $3.18 outside of this country,” he said, “That’s money that’s no longer in our county….but if we think about Ohio as a country, if Ohio was ranked as a country back in 2008, we would have been the 26th largest country in the world. So economically, it’s okay for us to think about Ohio as a country. And one of our choices is our local economy. So in other words, if we’re helping someone else’s economy…we should be helping our own economy.”
In contrast Couch explained that the cost of CNG in September 2012 was $1.98. Of that $1.98, as much as 1.40 stays in Ohio. And that price is nearly $2/gallon less than gasoline.
He also addressed the reliability of the fuel supply. Ohio benefits from the Marcelles and Utica shale. He said the Utica Shale has the most profitable unit per shale price of all of the shale plays.
“For us here, it’s not going to go away any time soon,” stated Couch of Ohio’s natural gas supply, “If you look at some of the projections of the energy intelligence communities, the EIA, more than half of the projected gas production is right here in Ohio.”
And the number of vehicles that are either CNG dedicated or have bi-fuel capabilities are growing. The majority of the vehicles are truck and transport vehicles but there are passenger vehicles, like the Chevrolet Cruise, as well. Couch added that it is a desirable transportation fuel because it requires less refining, it will not pool on the ground, it is non-toxic, and it ignites at a much higher temperature than gasoline.
In his presentation, Diehl explained that 100 percent of Smith Dairy’s revenue is moved by truck. In Ohio, he said, 85 percent of Ohio’s revenue is moved by truck. The company, which is located in Orrville, Ohio, is an “earth-friendly, family-owned” business. Smith’s have had a CNG station for two years and they have made efforts to reduce costs, making their trucks aerodynamic, their routes efficient, and reducing their carbon imprint.
“We really did a lot to reduce. We really pushed the envelope hard before we switched to natural gas,” said Diehl. That switch required an approximate $2.5 million investment as they purchased six CNG freight trucks and built their CNG station. Their price is $1.95 and the station is also open to the public.
They did considerable research before adopting CNG, considering all available options; and he thanked Ariel Corporation and other companies for contributing to their research.
When Diehl was asked about the change in fleet miles per gallon, Diehl said it dropped 4-8 percent.
“But the real boon,” he added, “was the reduction in fuel cost.” In 2012, he explained the cost of diesel was $3.64 but the switch to CNG lowered the cost to $2.14. He said that they calculated about a four-year pay off on the trucks.
Currently Smith’s Dairy still uses diesel for refrigeration but they plan to be diesel independent by 2030, though not necessarily entirely with CNG. Other alternative fuels are available or being developed.
“If you look at some of the projections of the energy intelligence communities, the EIA, more than half of the projected gas production is right here in Ohio,” said Brad Couch.