State dangles natural gas carrot, and Rabbittransit may bite
SHAMOKIN - The state is dangling a carrot to the tune of $20 million for transportation companies to fuel their fleets with natural gas, and Rabbittransit may be looking to take a bite.
Richard Farr, the agency's executive director, said an evaluation, albeit in its infancy, is under way about the potential to operate its buses and vans with natural gas instead of diesel fuel.
"In times when operating money is short, it makes sense to look at that seriously," Farr said Tuesday.
Rabbittransit is part of the York County Transportation Authority and is under contract with Northumberland County to run the local shared-ride program.
Fuel averages nationwide Tuesday were $4.02 a gallon for diesel and $3.39 a gallon for regular unleaded gasoline, according to the U.S. Energy Information Administration. That's compared to an average of $2.16 for the equivalent of one gallon of compressed natural
gas, according to cngprices.com, a gas industry website, which said the current rock bottom price was $0.87.
The abundance of natural gas thanks to the proliferation of Marcellus Shale reserves throughout Pennsylvania has raised the interest of converting publicly and privately owned vehicle fleets to natural gas.
Sen. John Gordner, R-27, said Pennsylvania is among the world's largest producers of natural gas.
"One of the benefits is being able to either assist transportation entities, government entities, in acquiring natural gas vehicles or converting them," he said.
Funding for conversion
The Department of Environmental Protection is offering $10 million this fiscal year, with applications due Feb. 1 and awards expected March 1. In 2013-14, $7.5 million will be made available with the remainder awarded the following year.
The Natural Gas Vehicle Grant Program offers funding to cover about half the incremental costs to convert or purchase a fleet of at least five vehicles, with a maximum of $25,000 awarded per vehicle.
To qualify, vehicles must exceed 14,000 pounds and must be fueled either by compressed or liquefied natural gas. A bi-fuel combination of natural gas and diesel fuel would also be permissible.
An applicant must also plan to build at least one natural gas fueling station in the state or have access to a fueling station. However, the grant program will not fund such infrastructure development.
There are discussions, Farr said, about developing a public/private partnership to construct a natural gas fueling station in York County.
He likened it to a turnkey operation, where a vendor would be contracted to operate the fueling station built on authority-owned land. It could not only be used to fuel agency vehicles, but perhaps commercial vehicles and others that would convert to natural gas, even pedestrian vehicles.
With Farr saying a decision wouldn't be likely before June, that would leave Rabbittransit out of the first round of the grant competition.
Conversion costs can exceed $10,000 and new vehicles that run on natural gas cost between $20,000 and $40,000 more than their diesel counterparts, Farr said. Those costs, he said, would likely be covered within one year given the savings on fuel costs.
Many of Rabbittransit's vehicles are beyond their anticipated lifespan, so considering natural gas vehicles now makes sense, Farr said.
"The smartest thing to do would be if we're replacing one, to move toward a compressed natural gas vehicle," he said.
There are other costs to consider, he said, such as meeting code and maintenance requirements associated with having natural gas vehicles, like ceiling height of a garage and installing light fixtures that are spark free.
If the fuel conversion were made, Farr said the vans used in Northumberland County would likely be switched during a later phase of any project undertaken by the agency. The first phase would include its larger busses in York County, he said.
Filling sites an issue
Since the grant program won't fund infrastructure development, and without anywhere to fill a bus's tank with natural gas, the prospect that Schuylkill Transportation System would make the switch is unlikely anytime soon.
Mike Micko, executive director of STS, said the agency has "no plans yet to apply" for any of the available grant funding, though he said he would discuss the program with board members.
The STS vehicle fleet is, Micko said, almost brand new, and the lifespan on the vehicles is up to 12 years. None need to be replaced, so purchasing a natural gas-fueled vehicle wouldn't make sense. He also said conversion doesn't appear an option at the time.
Megan Janolek, executive director of Lower Anthracite Transit System based in Mount Carmel, said she would be researching the grant program and her agency's feasibility to operate on natural gas.
Which comes first?
Gordner compared the situation to the chicken and the egg. In order to have a fleet of vehicles fueled by natural gas, a fueling station within a reasonable distance is necessary, and vice versa.
He expects the stations wouldn't pop up in every municipality, but said the potential exists for one to be established in the immediate coal region area, one in the Sunbury area and so on.
There are incentives in Marcellus Shale legislation passed in February to entice infrastructure development, Gordner said.
Sunbury, Northumberland County's seat, does not have a public transportation system. However, councilman Jim Eister said city officials are closely watching the developments in Williamsport, where a natural gas fueling station is proposed.
If it's feasible, he said Sunbury would look into converting its vehicles, such as police cruisers, to natural gas.