One of the largest operating expenses for nearly every fleet is fuel, and the U.S. Department of Energy (DOE) projects gasoline prices will continue to rise for decades to come.

However, by switching to natural gas vehicles (NGVs) and using natural gas fuel, fleets can reduce those costs by up to 40 percent or more while avoiding the volatility of global oil prices by using a fuel produced in the U.S.

Today, there are more companies and organizations involved in the funding, design, and construction of natural gas refueling stations than ever before. Some of the stakeholders engaged in developing natural gas fueling infrastructure include natural gas retailers, “traditional” gasoline and diesel fuel retailers, local natural gas utilities, and large municipal and private fleets. This increased activity has led to the installation of more than 1,300 public and private natural gas stations that now operate in the U.S.

At A Glance
For fleets looking to swtich to natural gas, they should be sure to:

  • Determine if it's the right fuel for the fleet and decide between compressed natural gas (CNG) and liquefied natural gas (LNG).
  • Understand the fleet's fueling needs and the various options available to fuel. 

Because of this increased activity, fleets considering a switch to NGVs have a variety of natural gas fueling options to choose from. The ideal fueling option for a fleet depends on a number of factors, including the types of vehicles deployed, where and when they operate, and capital availability (or lack of availability).

A fleet of natural gas pickups needing fast refueling will have different requirements than refuse trucks that can be refueled overnight. And, fleets with sufficient capital budgets to build their own private stations may face different choices than more capital-constrained fleets, which may prefer to rely on third-party stations.

Determining the Right Fuel for Your Fleet

For fleet vehicle drivers, the experience of fueling on natural gas can be very similar to fueling on gasoline or diesel in terms of the operation of the dispenser and nozzle.

The major difference with natural gas lies in the different equipment required both on board vehicles and at the station to store a gaseous instead of a liquid fuel.

Gasoline and diesel fuels are delivered from refineries to centralized distribution facilities, then trucked to retail stations and stored and dispensed at room temperature and pressure in liquid storage tanks.

Due to the different physical properties of natural gas compared to liquid fuels, it must be either compressed in gaseous form or cryogenically frozen in liquid form before it can be stored and used in an NGV. The physical state in which the natural gas is stored will depend in turn on the types of vehicles the fleet operates.

The two fuel types are:

Compressed natural gas (CNG) is most efficiently delivered via existing pipeline distribution systems directly to the station, where equipment compresses it to 3,600 pounds per square inch (psi) for storage in reinforced, pressurized tanks at the station and onboard the vehicle. Because these tanks are made of steel and/or carbon fiber, they are actually much safer than the thinner liquid tanks used for gasoline or diesel fuel. CNG is used for a full range of vehicle applications, from passenger cars to heavy-duty trucks.

Liquefied natural gas (LNG) is created by cryogenically freezing natural gas either at the station level or at a centralized facility that then uses special tanker trucks to distribute the fuel to individual stations, allowing for storage and dispensing as a liquid. Because special equipment is also required to maintain the gas in this liquid state onboard the vehicle, LNG is used primarily by the largest long-haul heavy-duty trucking fleets.

Understanding How Your Fleet Fuels
CNG fueling stations can be designed to accommodate any size vehicle and fuel demand, but may vary dramatically in the amount of time required for refueling. Whether a “time-fill” or a “fast-fill” station is the best choice will vary depending on how the fleet operates:

Time-fill stations typically compress the gas directly from the pipeline into the vehicle fuel tanks. This reduces costs by taking advantage of off-peak electricity rates and smaller compression equipment. The trade-off is fill times of several hours, making this choice most appropriate for fleets that can refuel while parked overnight.

Fast-fill systems combine more powerful compression equipment and a high-pressure storage system, which increases station costs. A properly configured system can fill the vehicle’s fuel tank in about the same time it takes to fuel a regular vehicle. The process for refueling is almost identical to the process used at retail gasoline stations to which most fleet drivers are accustomed.

Station Development

Costs of developing a natural gas fueling station will vary based on daily throughput required, the type of fuel (LNG, CNG, or both) it dispenses, and the speed of fueling (fast-fill or time-fill). According to a 2010 report published for the U.S. DOE, costs for installing a CNG fueling station can range up to $2 million.

In the early days of the NGV industry, most fleets had to develop their own refueling stations onsite, which limited adoption primarily to municipal fleets operating buses, refuse trucks, and utilities that could utilize government or ratepayer funding for capital costs. The good news for fleets today is that a growing number of third-party firms are also developing natural gas refueling infrastructure with a variety of business models, which can make NGV adoption a viable option for a wide range of both public and private fleets.

Four main approaches to CNG infrastructure development are being used in the U.S. today:

  • On-site private fueling. In this model, CNG fueling infrastructure is usually constructed at the fleet’s operating site, and fueling is available only for that customer’s vehicles. Fleets are typically required to sign long-term fueling agreements with adequate volume commitments to cover the entire cost of constructing the station.

  • Off-site private fueling. CNG fueling may be located off-site while still offering fleets exclusive access. These stations are generally cardlock-type stations owned and operated by a third party, where fleets can buy CNG using a branded purchasing card.

  • On-site fueling for fleets with public access. Under this scenario, CNG fueling infrastructure that is constructed at a fleet’s operating site and also offers CNG to the public either through the same dispensing system that the fleet uses or a dispenser located in a separate area designated for public use.

  • Off-site public fueling. In this model, CNG fueling is located in an area convenient for fleets as well as private consumers and is open to any NGV driver. A number of fleets may fuel regularly at these stations, but they also offer full access to the public, like a regular gasoline station. In fact, in some cases natural gas fuel may be offered within existing retail gasoline stations, offering a near-seamless transition for fleet drivers. The public access model of fueling may be particularly appealing to some fleets not only because of a familiar fueling experience, but also because they require less volume commitment, since the station developer is not entirely dependent on one fleet.

Additionally, CNG fueling locations with public access help create confidence among local fleet operators as well as consumers that convenient fueling is available, which increases the speed of CNG adoption. More CNG adoption leads to cleaner air and energy independence for the country — a winning combination for everyone.

Click here to read some useful terms to better understand the basics of natural gas.

Rob Minton is director of sales for VNG, which is a national fueling facility program for natural gas vehicles.