Sustainability & Energy Efficiency

How Fleet Owners Can Improve Fuel Economy and Reduce Emissions

3 min read

Whether they manage buses or commercial trucks, fleet owners are looking to reduce their dependence on diesel and their operating costs. More than 95 percent of all heavy-duty trucks are powered by diesel, and they consume approximately 22 billion gallons of fuel each year, according to the Diesel Technology Forum.

Fleet owners looking to make changes are driven both by their goal to improve fueel economy and government regulations. Though the price of diesel has dropped significantly in the past year, it’s projected to steadily increase to $80 per barrel by 2020, according to the latest forecasts by OPEC and US energy markets, barring any major supply disruptions due to political instability or acts of terrorism.

On the regulation front, the U.S. EPA established a national program to reduce emissions from medium and heavy-duty trucks and buses through 2018.

One way fleet owners can improve their fleet operation is to consider using compressed natural gas (CNG), a natural gas that comes primarily from domestic sources, has historically been less likely to experience major price volatility, and is better for the environment. Constellation senior technical sales manager Jordan Stitzer recently shared four key advantages of compressed natural gas with a group of fleet owners at Owens Community College in Findlay, Ohio.

Cost Reduction

One of the biggest advantages of using CNG is cost reduction—Constellation’s posted retail price per GGE (Gasoline Gallon Equivalent) currently ranges from $2.09 to $2.50 (depending on the station), and it isn’t expected to fluctuate based on currently stable natural commodity prices across the U.S. Fleet pricing can be negotiated for even better prices based on volume and commitment.

Over the past decade, the price of oil has varied widely from a 2014 peak of $101 per barrel for West Texas Intermediate (WTI), causing a high of $4.01 national average per diesel gallon at the pump. On a BTU basis, natural gas currently trades at a third of the cost of diesel, according to NGVAmerica, with only about 20 percent of the price of CNG at the pump coming from commodity compared to more than 70 percent of the cost of diesel. Natural gas is also de-coupled from oil prices, with the vast majority of natural gas used in the U.S. being produced domestically. In most cases, Constellation can offer customers the ability to lock in the price of natural gas for three or more years, further enhancing budget predictability, which can be a competitive advantage for a fleet owner.

Emissions Reduction

In addition to offering more cost stability than gasoline or diesel fuel, compressed natural gas is also more beneficial to the environment. According to the Department of Energy’s Alternative Fuels Data Center, it has lower carbon dioxide and smog causing emissions. Natural gas vehicles show an average reduction in ozone-forming emissions of 80 percent compared to gasoline vehicles, according to California’s Consumer Energy Center.

Reduced Reliance on Foreign Imports

Currently, more than 99 percent of compressed natural gas comes from within the United States—much of it through in-state wells and in the recently developed shale formations, as well as traditional production in the Rocky Mountains, Southwest, and Northeast. This reduces the country’s reliance on fuel from foreign countries. Consumption of CNG has increased by 145 percent over the past six years, driving construction of more infrastructure projects.

Government Incentives

State governments offer a number of incentives for fleets to convert to natural gas. The Ohio EPA currently offers a $15 million grant fund for fleets, as well as a retrofit program for buses. Other states offer similar programs, which can be found on the U.S. Department of Energy website.

Is CNG Right For Your Fleet?

Compressed natural gas is a good alternative for many light-duty, mid-sized and heavy-duty vehicles. As a leading energy provider, Constellation is committed to providing alternative energy solutions that enhance fuel economy, reduce emissions and reduce dependence on foreign fuel. Earlier this year, Constellation acquired seven compressed natural gas fueling stations in Indiana and Ohio to help our customers make the switch to CNG more quickly.

To learn more about CNG and whether it’s a good fit for your fleet, contact us today.

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