By Nathaniel Cary, Greenville News
The white, oversized work truck pulled into the refueling station and swung around to face the gas pump.
Hugh Andrews hopped out, popped open his truck's hood and inserted the pump nozzle into a receptor underneath it. He pressed the trigger, and natural gas began to fill three empty tanks strapped down in his truck bed.
Andrews, of Inman, is among a small but growing number of drivers who have rejected the instability of gasoline prices in favor of compressed natural gas.
Andrews made the switch two years ago. He drove to Utah, where a friend helped him install a conversion kit in his diesel truck.
He did it because natural gas is produced in America and because it doesn't produce greenhouse gases like gasoline or diesel.
Mostly, he did it because compressed natural gas is cheaper.
"I save about $100 a month running CNG," instead of just diesel, Andrews said.
Andrews made a deliberate choice to switch, one that he knew would be less convenient for many folks because natural gas refueling stations are a rare sight in South Carolina.
As natural gas has increased in abundance and lowered costs due to industry advances like hydraulic fracturing that have made the resource easier to extract from the earth, more businesses, utilities and individuals are looking to capitalize on the money-saving alternative.
But the energy source that many use to heat their homes is just starting to gain traction as a vehicle fuel source across the nation. In many ways, South Carolina lags behind other states that have embraced natural gas as a transportation alternative.
That could change if industry and government would collaborate to build more filling stations and convert fleets of vehicles to use the alternative fuel, said Phillip Riddle, president and CEO of the M21 Group, which consults with local industries to cut energy costs.
The biggest immediate beneficiaries are fleet operators and heavy-duty vehicles like sanitation trucks, delivery trucks and tractor trailers.
"The ideal candidate is a vehicle that uses a lot of fuel, that drives a lot of miles, that goes nowhere," Riddle said. "That's the definition of a sanitation truck or a route-type delivery situation."
At issue is whether natural gas would ever become widely accepted as a transportation fuel, what roles government, utilities and the private sector would play in making it available and whether natural gas will become viable for passenger vehicles as it competes with other alternatives for a small share of the clean energy vehicle market.
Cost versus convenience
The pump clicked on and hummed as CNG filled Andrews' tanks at the Greer Commission of Public Works. Behind him, Greer CPW's gas operations director Rob Rhodes waited to fill his truck.
The price is enticing. This week, it cost $1.70 for what is termed a gas gallon equivalent at Greer CPW, while gas prices hover around $3 per gallon in Greenville.
But the drawback for most drivers here and across the country is a lack of infrastructure.
Right now, there are five natural gas fueling stations in South Carolina, according to America's Natural Gas Alliance. Two of those are located in the Greenville area. Piedmont Natural Gas opened a station on Woodruff Industrial Lane three years ago. Greer CPW opened its CNG station in April.
There are roughly 1,000 compressed natural gas stations nationwide, according to ANGA.
Retailers haven't bought into the CNG market yet, either nationwide or locally, so most stations are run by natural gas providers, said Dave Hurst, natural gas vehicles principal research analyst at Navigant Research, a transportation market research company.
Greer CPW has had inquiries from retailers about how its station operates, but none have shown interest yet, said Rhodes.
Greer CPW, which has prepped its new station to install a canopy and is prepared to add a second fill pump when needed, would be open to a retailer taking over operations, Rhodes said.
The Upstate is ready for CNG to take off, Rhodes said.
Whether it does remains to be seen.
Riddle has invited Upstate business, academic and government leaders to a symposium, which will be held today at the BMW Zentrum in Greer, in an attempt to educate and encourage collaboration on alternative fuels.
Speakers at the symposium include a sanitation operator, fleet manager, research professor, entrepreneur and former U.S. Rep. Bob Inglis, who is now executive director of the Energy and Enterprise Initiative based at George Mason University in Fairfax, Va.
For those interested in CNG, it's a chicken-or-egg scenario, he said. Who's going to invest first?
"The most expedient way is for good business minds to get together and act in a coordinated plan," Riddle said.
So far in the U.S., the vast majority of natural gas vehicles are for fleets and heavy-duty users, Hurst said.
He doesn't expect that to change.
Natural gas is still a small part of the overall vehicle market, but it is "probably the fastest-growing segment," Hurst said.
In 2013, Hurst projects, 2.89 million heavy-duty natural gas vehicles will be sold in the U.S. In recent years, those numbers have swung between 2.5 million to 3.5 million, but with the economy in a rebound, the market is in an upswing because companies delayed purchases for several years and are playing catch-up, he said.
The heavy duty natural gas market will continue to expand because fleet managers understand they can recover the additional costs of purchasing a natural gas vehicle quickly, Hurst said.
It costs 10 to 20 percent more to purchase a vehicle that's been converted to use natural gas, depending on the type of vehicle, he said. For a fleet of vehicles, those costs can be recovered quickly with the low cost of CNG, he said.
"They recognize that over the first three years they're going to pay back their incremental costs, and if they keep the vehicle for only six years, they've gotten three years where they're actually making money on it versus a gas or diesel vehicle," Hurst said.
Large and small operators are making the switch. Waste Management has converted 2,000 of its 18,000-vehicle fleet of sanitation trucks to natural gas. AT&T has converted more than 5,000 of its service trucks to alternative fuels and plans to convert 15,000 by 2018.
Both companies are National Clean Fleets partners with the U.S. Department of Energy.
On a smaller scale, Greenville County uses propane in its police cars, Simpsonville runs a sanitation truck with a banner that proclaims "this vehicle runs on natural gas" and other local sanitation companies have begun to convert trucks to natural gas, Riddle said.
Rhodes said he's been surprised at the number of customers who have shown up in Greer since the CNG single-pump station opened in April. Many of them had installed conversion kits on older model trucks and came out of the woodwork once the station opened, he said.
The number of fill-ups has risen each month since Greer opened its station to the public, he said.
Passenger cars, too?
It's much harder to strap sizable natural gas tanks in the cargo space of a passenger car than it is in a truck or work van.
That's a key reason why natural gas hasn't, and likely won't, play a larger role when it comes to passenger cars, Hurst said. "You're taking a Civic and cutting out half the trunk," Hurst said. "It gets to be tough to sell."
There are about 110,000 natural gas-powered light-duty vehicles on the roads today, according to America's Natural Gas Alliance. That's less than 0.05 percent of the 254.4 million passenger vehicles in the U.S. counted in a 2007 Department of Transportation survey.
This year, Hurst anticipates 18,466 natural gas vehicle sales in passenger and light-duty trucks.
Natural gas has been surpassed by hybrids and electric vehicles, and now electric-vehicle charging stations have also surpassed CNG stations, he said.
Honda sells a Civic CNG model and Chevy has announced a Cruze CNG-and-gas bi-fuel model. Ford recently started to sell an F-150 CNG model and expects to sell 15,000 of them this year.
So far, conversion kits are a much more popular way to turn a gasoline vehicle into a CNG vehicle. A company in North Carolina performed conversions on eight Greer CPW vehicles at a cost of $8,000 to $10,000 per vehicle, Rhodes said.
Andrews said he spent about $4,500 to turn his diesel truck into a bi-fuel CNG truck two years ago.
It's significantly cheaper to buy an electric or hybrid car than it is to buy a CNG model, and it's harder for an individual to reach the return-on-investment threshold, Hurst said.
There's not likely to be a single winner in the battle for market share between clean energy options, he said. It will vary by geography and the options - like the presence of refueling stations - that are available in each market, he said.
One boon for CNG would be whether companies could successfully build a cheaper refueling kit so customers could fill up using natural gas lines that already run to many houses, he said. Right now, the cheapest home-based refueling kits cost about $4,000, he said.
In California, drivers of natural gas vehicles can use HOV lanes on interstates. In Oklahoma, residents can get a tax credit for half the cost of a CNG conversion. In Utah, residents can get a $605 tax credit on purchase of a CNG vehicle.
South Carolina is still in the "infancy" stage of its natural gas development, and whether the state offers incentives or private enterprise makes the leap to CNG is still up in the air, Riddle said. He's not propagating one or the other, he said. Speakers at the symposium today will discuss both a government hands-off and a hands-on approach to building coordination for alternative fuels in the state, he said.
With major interstates that carry long-haul trucks through town and countless fleets of vehicles like beverage venders, trash collectors and delivery trucks, the state is poised to move into the first phase of CNG expansion by adding more users and stations to create a true network, he said.
"Greenville, the Upstate and South Carolina, in that order, is perfectly positioned, geographically and economically, to be in the forefront of this subject in the Southeast," Riddle said.