CNG vehicle rise spurs filling station projects

California, Texas, Pennsylvania and Ohio are leading the boom in new compressed natural gas (CNG) and liquefied natural gas (LNG) filling stations in the United States, according to the latest statistics by the Alternative Fuels Data Center (AFDC), the Department of Energy’s research agency for advanced transportation.

A UPS delivery truck fuels up with compressed natural gas. Image credit: Pat Corkery/NREL

The ramp-up in station construction and infrastructure upgrades comes on the back of a growing market for alternative fuel vehicles across the US, particularly gas waste trucks, buses and heavy-duty trucks.

The current natural gas to petroleum price spread has presented an opportunity for consumers and industry to benefit from switching to natural gas vehicles.

The number of CNG stations in the US has jumped 103% since 2009, and the number of LNG stations has shot up 208% in the same period, according to Natural Gas Vehicles for America.

While only a little more than half of these stations are "public access," investments are being made to upgrade older stations to increase capacity and provide consumers with more refuelling options.

There are currently 1,564 CNG stations nationwide and 182 more are being planned, AFDC data shows. Most of the new stations will be built in Texas (28), California (21), Pennsylvania (18), as well as Florida and Ohio, with 11 planned stations each.

Meanwhile, there are 111 existing LNG stations in the US, with 66 more in the planning phase. While most of the planned stations are spread fairly evenly across 35 states, Texas is expected to add the most (8), followed by Georgia (5) and Oregon (4).

The availability of fuelling infrastructure is a key indicator for a strong market for a CNG and LNG in a number of US states. There are currently about 153,000 natural gas vehicles (NGVs) on US roads today, some 70-80% of which are specified with CNG fuel systems, according to Roe East, general manager, On-Highway Natural Gas Engines at Cummins Inc.

Even though NGV production and sales fell by 6.5% in 2014, both are expected to hold steady or improve in 2015, according to Natural Gas Vehicles for America.

CNG is the most promising alternative fuel across the US largely because freight traffic provides potential demand for many far-reaching corridor markets and because the sources of CNG are very widespread geographically, according to a November 2014 report by the National Renewable Energy Laboratory (NREL) that analyzed the geography of existing and potential alternative fuel markets in the country.

"CNG fuelling has been adopted more quickly than LNG fuelling mainly because of lower cost of entry for both infrastructure developers and fleets," said Joey Kline, business development director at American Fuelling Systems (AFS).

"[In LNG], the opportunity to impact the industries such as drilling, mining, marine and rail is significant. However, a small-scale LNG production facility can cost $25 million to build, while a public CNG station can cost around $2 million."

The number of LNG and CNG fuelling stations in the US has been rising steadily since 2009. The CNG station count decreased between 1996 and 2006 -- despite the increase in CNG sales at the time -- largely because the average station size was increasing, but it has picked up since. Data source: Alternative Fuels Data Center (AFDC).

Rolling out NGV infrastructure in the South
An influx of big firms to Southern states such as Georgia and Texas has created a need for natural gas waste and delivery trucks and buses, which in turn has boosted the number of filling stations in the region.

Many Fortune 500 companies have been lured by an attractive tax regime and a lower cost of living for employees in Georgia.
Daimler AG announced earlier this year that it is shifting the Mercedes-Benz USA’s headquarters from New Jersey to Atlanta. Energy majors such as ExxonMobil and Valero Energy are also headquartered in Texas.

AFS, a leader in the North American alternative fuelling industry, is building Columbus, Georgia’s first CNG station, as well as a number of other facilities in strategic locations throughout the Southeast.

The company, which provides CNG and LNG to the transportation and energy sectors, owns and operates the largest public CNG filling station in Georgia.

"We are focused on the Southeast and the South because lots of businesses are moving here and are already here," Kline said. "The growth is here. We cater to all sorts of businesses -- trucks used for sanitation, waste, food, ice, anyone who needs their truck filled up with natural gas."

AFS has five CNG filling stations serving their customers in Georgia, Texas and Virginia. The company also plans to open six to eight more filling stations in 2016, all in the Southeast and the South, according to Kline.

It typically costs about $1.7 to $2 million to set up a CNG station, he said.

"We want to also open more outlets in Texas because that’s where the big energy companies are, and the state government is supportive of our projects," Kline added. "The business climate is good in the states we operate – the West Coast is developed, whereas where we are there is a lot of scope for growth."

AFS is also partnering with GAIN Clean Fuel, a brand of CNG provider US Gain, to add dispensing capabilities to AFS’s existing CNG site in Atlanta.

The service will begin in early May and will be incorporated into GAIN Clean Fuel’s North American network of CNG stations. The two companies plan to expand the network of CNG fuelling stations across the United States.

US Gain is on track to open 100 new fuelling stations across the country within the next two years, according to a statement on its website.

In another big vote of confidence in this sector, Atlanta-based United Parcel Service of America, Inc (UPS), the world’s biggest package shipping company, announced in April it plans to build 15 CNG fuelling stations in the US to support the purchase and planned deployment of 1,400 new CNG vehicles in 2016.

"UPS's investment in a large-scale alternative energy fleet has enabled the company to avoid more than 34 million gallons of conventional fuels since 2000," Mitch Nichols, UPS senior vice president of transportation and engineering, said in a statement.

"CNG is an important building block in our long-term fleet strategy and offers environmental and economic advantages."

Twelve of the CNG stations will be in new natural gas vehicle deployment areas, and three will replace existing CNG stations with more robust, higher-capacity equipment. This purchase represents a nearly 30% increase to the company's current alternative fuel and advanced technology fleet of 5,088 vehicles worldwide.

The CNG fuelling stations and vehicle purchases are part of the company's strategy to diversify its fuel sources, implement a fleet infrastructure that lowers tailpipe emissions and increase its experience using alternative fuels in freight transport applications. UPS plans to deploy new CNG vehicles in 15 cities.