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Fuel Prices Provide a Push Transit, Public Service Switch to Alternative Fuels Heats Up

Posted on: Tuesday, 20 September 2005, 00:00 CDT

SANTA CLARITA - Transit and public service providers forced by air emissions rules to replace aging diesel and gasoline fleets with alternative fuel vehicles may find a new reason to try alternative fuel vehicles as high fuel costs persist.

Air quality concerns and state clean air mandates have motivated agencies such as the city's transit service and local waste hauler Blue Barrel Disposal to convert their fleets to cleaner-burning natural gas.

State and local regulators estimated about 70 percent of California's toxic emissions come from diesel fuel, and the Santa Clarita Valley has some of the worst air in the Southland.

But sky-high fuel prices of the past year may provide further incentive. A gallon of diesel in Los Angeles/Long Beach hit $3.305 Friday - it was $2.25 a year ago - according to the Automobile Club of Southern California. In comparison, compressed natural gas is just around $1 per therm - one gallon of gasoline is roughly 1.125 therms.

CNG is the apparent leader in the alternative fuel race, said Jerry Martin, spokesman for the California Air Resources Board, the regulator floating several emission reduction and alternative fuel vehicle mandates.

"Right now, it's actually cheaper than pumping diesel fuel or gasoline," he said. "But there are other technologies that are emerging and may overtake CNG. ... (There are) hybrid engines, liquefied natural gas or propane."

At Blue Barrel, which provides trash pickup for the city's 170,000 residents, high diesel costs have added more than $4,000 to its daily fuel tab compared to a year ago. Some city departments have reported month-to-month fuel cost increase of up to 29 percent.

"We can't really change how we operate, but we're clearly concerned about the future," said Eric Rose, a spokesman of Houston- based Waste Management, which operates Blue Barrel.

Rose said the company has plans to bolster its fleet with more liquefied natural gas vehicles in 2007. Of the 2,742 trash trucks now operating statewide, 415 run on LNG while another 794 are equipped with pollution controls - all part of a bid to meet a CARB emission reduction mandate.

Meantime, the city of Santa Clarita has invested in a $4 million compressed natural gas pump at its soon-to-open $24 million transit depot and recently purchased 14 CNG buses. There are plans to replace the remaining 34 diesel buses by 2012.

City Transportation Manager Bob Murphy said the motivation is cleaner air, though he believes high diesel prices could drive more demand for alternative fuels.

"It makes it more attractive and causes people to investigate the possibility," he said. "However, part of the consideration - as more and more people move to those fuels, that increase demand would increase the price for those fuels as well."

Indeed, natural gas prices have inched up amid rising demand and concerns with supply disruptions due to Hurricane Katrina. October futures hit $11.13 per 1,000 cubic feet on the New York Mercantile Exchange on Friday, up from just under $10 at the end of August.

"Anytime the price of diesel rises, you see proponents of the other types of fuels point that out - our fuels are now competitive," Martin said. "But there are other factors for companies to consider."

Despite apparent fuel savings, new technology and lack of infrastructure remain pricey hurdles for alternative fuels - whether it's natural gas, propane or electric hybrids. Coupled with the higher maintenance cost of these vehicles, most transportation managers believe it's a wash.

For example, each CNG bus purchased by the city costs about $15,000 more than a comparable diesel model, Murphy said. Government credits could cut as much as $12,000 from the price tag, but it doesn't end there.

"The $4 million fueling facility - once you figure that into the capacity investment, you can argue that it's more expensive," he said. "But that's basically start-up cost."

Gardena-based Cleanstreet, which provides street sweeping services for the city of Santa Clarita, has about 60 percent of the fleet using either propane or natural gas. The city's contract requires deployment of alternative-fuel sweepers. "The cost of the fuel itself for propane is a little less than diesel, but the cost of maintaining a propane vehicle is much, much more than a diesel," said Jere Costello, the firm's chief executive officer.

Fuel access and technology reliability remain Waste Management's key concerns. In a Sept. 2 letter to the CARB Chairwoman Cindy Tuck, the company cited electronics and fuel injector failures, excessive oil consumption and other problems began appearing in some LNG trucks about 1,200 hours into the operation - an "enormous risk" for waste haulers.

The company also cited a recent production plant failure that disrupted fuel supply and left them "perilously close" to running out of LNG at their eight fueling stations.

"If we have to park 300 trucks, the advantages automatically die," Rose said. "We would have to face dozens of liquidation damages for missed pickups in a dozen cities.

"We believe it's critical that the air resources board makes a determination that adequate fuel supply would be available."

Eugene Tong, (661) 257-5253

eugene.tong(at)dailynews.com

Source: Daily News; Los Angeles, Calif.

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