Alternative fuels put to use in Mississippi

June 19, 2011

Energy

Rising gas prices along with pressures to “go green” have Mississippi municipalities and companies talking about using alternative fuels, such as propane and natural gas, to power their vehicles.

A few municipalities – the City of Starkville, the Jones County Sheriff’s Office and the City of West Point – received Mississippi Development Authority (MDA) grants to convert vehicles to hybrids that will run on both gasoline and propane. But that MDA grant pool has now dried up.

Municipalities and private businesses are interested in taking advantage of a federal tax credit offering 50 cents per gallon of alternative fuel used, while propane distribution companies are looking to sell.

Natural gas utilities are discussing infrastructure solutions, as the Stennis Space Center in Hancock County is the only place in Mississippi with a fleet of vehicles running on CNG, or compressed natural gas.

The City of West Point’s grant writer, Melanie Busby, said the federal tax credit program is appealing because governmental entities actually get a rebate check instead of a credit even though municipalities don’t pay taxes.

Propane use

The city received approximately $52,000 from MDA, which it used to converted eight police cars to run on propane autogas. Based on calculations West Point’s vehicles driving 2,500 miles each per month, the city expects to save $26,000 annually.

Converting a car to run on propane involves installing a propane tank in the trunk. The vehicle cranks using gasoline and later switches to propane. If it runs out of propane, the car automatically switches back over to gasoline with no disruption in service.

Busby said the city has a contract with Mississippi-based Blossman Gas, which stipulates that the city must buy its propane gas from Blossman but does not mandate a certain amount must be purchased.

Like many municipalities, the city had its own refueling station for city vehicles. Alliance Autogas, a nationwide network of propane retailers, has installed a propane fueling station for West Point.

Alliance Autogas states that more than half of the propane used in this country is derived from domestic natural gas sources, thus making propane economical and abundant. Onshore natural gas production in the United States has increased dramatically over the past few years due to advanced technology in shale drilling.

Charlie Stafford, regional sales executive for Blossman Gas, said two private companies on the Mississippi Gulf Coast are converting fleets to use propane without grant money.

Guy Jermyns Limousine Excursions in Biloxi is converting four vehicles now, and Yellow Cab of Biloxi-Gulfport as well as Yellow Airport Shuttle are planning to convert five or more vehicles.

Blossman Gas, which is headquartered in Ocean Springs and has more then 70 locations nationwide, said the Airport Shuttle New Orleans’ 20 conversions are a success story. The greater the mileage a fleet runs, the greater the savings. The New Orleans system should see savings with in about a year, Stafford said.

An average driver interested in getting his car or truck converted to run on propane gas by a certified professional in Mississippi may have a difficult time finding one.

Stafford said Blossman is talking now with potential partner businesses that may become certified to do conversions. Partnerships could include car dealerships or any entity with a large enough operation and familiarity with the technology.

A private conversion of an average vehicle that travels about 45,000 miles a year would cost approximately $5,800 to convert, and the return on investment would take about 14 months to kick in, Stafford said.

Blossman is also pursuing more federal grant money. It has currently included Pearl River County, Forrest County and Jones County in a submission to Virginia Clean Cities, a nonprofit that is administering grant money from the U.S. Department of Energy, Stafford said.

Compressed natural gas pros and cons

Charles Campbell, senior marketing consultant with natural gas utility CenterPoint Energy, said there has been a “tremendous amount of interest (in CNG) from municipalities to school bus systems to individual fleets as well as private companies” in Mississippi.

There are possibilities of financing opportunities where entities installing CNG facilities and converting vehicles could pay back a loan based on savings, Campbell said. Thus, no money would be required up front, and entities would see savings after equipment had been paid off.

Atmos Energy Mississippi, another state natural gas utility, said interest in using CNG as an alternative fuel has been high.

“We’ve seen this kind of interest in the past. When fuel prices go up, the inquiries go up. Oftentimes, oil prices come back down and inquiries stop,” said Bob Kerley, vice president of marketing at Atmos Energy Mississippi. “One of the biggest advantages now is the price separation between oil and natural gas. For years they’ve pretty much tracked each other. In 2009, you started seeing some separation. Now oil prices are approximately four times greater than natural gas.”

CNG as a fuel makes sense “when you can centralize your needs and you’re going to come back to a central location,” Kerley said, making it ideal for school buses, garbage trucks and public transit vehicles.

CNG fueling stations use compressors, which take time to compress the gas. Filling up cars quickly requires a large compressor, making it ideal for fleets which are parked in a central location and can be filled up overnight.

Mississippians, who earn the lowest wages in the country but spend the highest portion of their incomes on gasoline, aren’t likely to be driving CNG-fueled cars in this state any time soon. There is only one car currently on the American market that comes factory-ready to use CNG, and that is the Honda Civic CNG sedan. Converting a car to run on CNG is also possible, and the process is similar to the propane conversion process.

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Since there are no public CNG filling stations in Mississippi, an owner would have to install a home CNG fueling station in his or her garage, which would compress natural gas obtained from residential gas piping overnight. That equipment would cost $3,000 to $4,000 and possibly wouldn’t last long enough to pay for itself. “The longevity of that equipment is being evaluated,” Kerley said.

The commercial fueling system for CNG at the Stennis Space Center has been wrought with problems, according to transportation officer Don Griffith.

Stennis has 37 bi-fuel CNG vehicles, including vans, pickup trucks and Honda Civics. Griffith has been pleased with their performance. But the fueling station’s original compressors, made by now-bankrupt Fuelmaker, went out. Birmingham-based Phoenix Energy replaced them with Bauer compressors, which were out of commission at press time for repairs.

Griffith said government mandates and the fact that Stennis has more CNG piping running through it than any other place in country made the vehicles an easy sell. Stennis spent $110,000 plus labor on the compressors, and savings won’t be seen anytime soon. Federal mandates didn’t include a concern for cost effectiveness, he said. When the fleet is running, the cost for fuel — which Stennis buys straight from the wellhead — is about 47 cents per gallon.

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