Over the last two decades, the term “greening” has become a mainstream buzzword in the transportation industry, garnering positive recognition for fleet operators that deployed alternatively fueled and advanced technology vehicles. While many of these leading-edge projects were often spurred by environmental and social motivations, these factors have shifted in the past 12 to 24 months as economic return has become the primary “green” attribute driving investment in these fuels and technologies. The reasons are simple:
The data is coming in. Early adopters throughout North America have been running natural gas, propane autogas, electric, hybrid, and other fuel-efficient technologies in more significant volumes for the last five to 10 years. Operational data is being gathered, analyzed and shared in news publications, across social media channels, in webinars, at conferences, and by other means. Case studies showing reduced fuel costs and thus lower operating costs are being studied and replicated by those looking to “green the fleet.”
Lower fuel costs. Energy prices continue to hover at $100/barrel for oil and nearly $4/gal. for diesel. While domestic oil production is surging and refining output increasing, this incremental refining capacity is mostly being exported to more lucrative foreign markets. The average retail fuel prices for natural gas, propane autogas, and electricity are steadily undercutting the cost of diesel by 20 to 50% on an energy-equivalent basis.
Price stability. In the United States, over-the-road trucks consume a steady diet of three million barrels of oil every day. This is the equivalent of approximately 75% of all oil imported from OPEC members, where political instability is prone to cause oil price volatility. Switching to domestically produced alternative fuels greatly reduces this exposure, allowing fleet operators to effectively plan for the long term.
Customer demand. Many fleets receive external influence to integrate alternative fuels in order to maintain a key account or to win business with a new customer.
As leading fleets have demonstrated, there are a number of better alternatives available to improve the fleet’s economic and environmental performance. However, with so many options available, the main challenge is how to select the fuel(s) and technology(ies) that will provide the maximum benefit—which of course varies for every fleet. Factors fleet managers must consider include existing and planned commercial fueling infrastructure in their region; right-fitting vehicle, fuel and equipment options based on their fleet’s function and duty cycle; renting, leasing or owning; emissions benefits and fuel reductions; investment returns (with NPV and IRR calculations run for each potential option); available federal and state tax credits, grants, loan programs and/or third-party financing; required facility upgrades for maintenance of alternatively fueled vehicles; and employee safety training costs.
As any fleet manager who has looked at alternative fuel options will tell you, there are far more questions than there are answers. Without an “alternative fuel playbook” on the shelf, finding answers to these questions takes time and research. Fleet Owner’s new “Greening the Fleet” column will examine case studies from leading fleets, and highlight key factors today’s fleet professionals must examine to “green their fleets” from an economic and environmental perspective…and in that order.
Erik Neandross is CEO of Gladstein, Neandross & Associates (GNA), the clean transportation and energy consulting firm that organizes the Alternative Clean Transportation (ACT) Expo. Learn more at www.gladstein.org and www.actexpo.com.
