The environmental and financial benefits of running CNG vehicle fleets are important to any business. While assessing the value of environmental benefits is difficult to measure, all businesses are still looking for a concrete return on their investment. There is no denying that there is an up-front cost to retooling your fleet. The questions are, how will your company recoup its investment and what is the payoff?
Proponents of CNG say the payoff is in the lower natural gas prices, which typically run $1 or $2 per gallon equivalent below the price of diesel, even in today’s market where diesel cost is lower than it has been in the past. One company, Green Energy Oilfield Services in Fairfield, Texas took delivery of 60 natural gas powered Peterbilt Trucks. The company calculated the fleet would pay for itself in 14 to 15 months based on the fuel cost savings alone.
As it is, according to Scott Perry, heading up Ryder’s alternative fuel program, the initial cost of CNG powered trucks is higher than comparable diesel trucksw. However, as the CNG industry gains critical mass, prices for equipment have and will continue to come down. According to figures from Ryder’s alternative fuels program, incremental costs for investing in CNG fleets dropped 75% over the five-year period between 2007 and 2012.
The number of miles traveled per year, and therefore the amount of fuel used, is a major factor in determining return on investment since the most significant and immediate savings are based on fuel costs. If the fleet travels 100,000 miles a year, it may take roughly 20 to 24 months for savings to make up for investment, based on the differential of fuel cost during that time period.
A growing number of states offer financial incentives to help defray the costs of CNG fleet conversion. The Federal Government also offers some fuel tax exemptions for alternative fuel fleets.
ET Environmental Corporation is committed to providing innovative solutions for our clients, we support alternative fuels programs, and provide design and construction services related to CNG fueling and maintenance facilities. Please contact us to learn more.