A new name made its way into the propane autogas market earlier this year – Agility Fuel Solutions launched a propane autogas business unit and acquired assets from CleanFuel USA.
Agility Fuel Solutions, headquartered in Costa Mesa, California, provides clean fuel solutions, including natural gas and propane systems for commercial vehicles.
While the company has made its presence known in the natural gas community, it hopes to focus more time on expanding into the propane industry to further develop, certify and integrate low-pressure propane fuel systems for original equipment manufacturer (OEM) engines and vehicles.
LP Gas magazine connected with Curtis Donaldson, general manager of business development at Agility Fuel Solutions; Brad Garner, president of Agility’s powertrain systems business unit; and Charlie Silio, vice president of strategy and corporate development at Agility Fuel Solutions, to learn more about the acquisition and how the company plans to advance propane autogas technologies.
LP Gas: What was the value in acquiring some of CleanFuel USA’s assets?
Silio: Last year, we looked into the medium-duty vehicle market, where we realized we needed to offer a more complete set of options. We launched the powertrain systems unit and then we brought on CleanFuel USA assets because they were technology leaders in propane. Our overall goal is to drive the transition of fleets globally to cleaner fuels.
Garner: We started to build out the powertrain systems business organically, which is possible, but we saw the opportunity to acquire the CleanFuel USA assets and some very capable people became available who wanted to join us that enabled us to accelerate our growth.
Donaldson: Several of CleanFuel USA’s customers were also Agility customers, operating both propane and compressed natural gas (CNG) on different vehicles and locations. Putting our product lines together enabled a one-stop solution for those customers.
LP Gas: With acquiring CleanFuel USA, how many of the company’s employees joined Agility Fuel Solutions and what do they bring to the company?
Garner: In the end, 14 previous CleanFuel USA employees joined us. Donaldson has great connectivity in the propane vehicle community and with related organizations and government agencies. Another person who joined us from CleanFuel USA is Wayne Moore. He is a well-known and strong technical leader who brings great value to our team. As does Brooke McWhirter, who is very connected with many distributors of propane buses and fleet vehicles on the end-customer side.
By adding CleanFuel USA assets and some of the people, it has accelerated our product offering with the best in the business.
LP Gas: Agility Fuel Solutions provides solutions for a variety of alternative fuel vehicles. Are there any competition issues with this setup?
Garner: We see all alternative fuels as clean fuels and believe there are fleet applications for all. Depending on your fleet’s location and your fleet’s needs, any one of the clean fuels could be a solution for you. Many fleets might require all of the different clean fuels. For example, a school bus in a rural community drives long routes to pick up students, which makes a great solution for propane. But urban buses in inner city areas need better access to refueling, so that is a good solution for natural gas. We do not believe in any one alternative. Diesel fuel and gasoline are the competition.
LP Gas: A number of propane retailers view natural gas as a competitor, yet you are saying propane and natural gas can both work together in the fleet market. How would you explain this perspective to retailers?
Silio: In the residential heating market, there’s a fight over market share between propane and natural gas in many cases. But fleet applications are dominated by diesel and gasoline, while propane and natural gas are both clean fuels. And in that market, propane and natural gas don’t have to be competitive with one another. The key is to find fleets that are willing to do the math and decide to convert to clean fuel. If they do that, there are applications for both propane and natural gas, and those applications don’t tend to overlap. UPS is a great example of that. [UPS] has made a major commitment to clean fuels, and having done that they’re using a combination of natural gas, propane and hybrid/electric vehicles where each is the best fit for a particular vehicle type and fleet location. [So the vehicle market] is a different dynamic than what you see with the traditional heating market where propane and natural gas can complement each other, not necessarily directly compete with one another.
Donaldson: From the propane guy perspective, I’m excited to say to people, “Here are our clean fuel options from Agility.” Let’s work on the best economical solution for you based on your fleet and situation. In many cases, propane will be the best option. I’ve never felt like the enemy is CNG.
Garner: We as an industry – a clean air industry – must recognize that propane vehicles have attributes to certain fleets that natural gas cannot deliver, and vice versa. There is not good access to natural gas in some areas. The market is big enough for all clean fuels to find success and growth.
LP Gas: For Donaldson and Garner, you two had mentioned that you have worked together in the past. Could you share a little bit about that?
Garner: Curtis and I have known each other going on 30 years. We have a shared vision on what has to happen to vehicles, infrastructure, servicing vehicles and how to make a successful program come together. By joining forces like we are, we think we can bring a better solution forward.
Donaldson: There are people you know in the industry for long periods of time, and there’s people you work and align yourself with during that same time frame. As I look back to the late 1980s when I was still at ConocoPhillips and hadn’t even started CleanFuel USA, I was with Brad and some other folks in Canada. That was our introduction. One decade later, I was working with Brad at IMPCO. In the 2000s, we were working together at IMPCO doing some international projects. And now this decade, this opportunity came along. Along the journey, we keep ending up working together because of a shared vision.
LP Gas: What was it like for you two working in the autogas market a few decades ago?
Donaldson: We were like a solo voice in the market in the 1990s. Marketers weren’t interested [in autogas]. There were fewer people. We went to trade shows, and we were the only propane booth. So we felt like a lone voice in the fleet world for propane.
Garner: We were not the only pioneers, there were a bunch of us. We can all talk fondly about those days. I remember trying to convince the market about propane vehicles a long time ago, trying to convince propane marketers they needed to switch their bulk diesel trucks with propane trucks.
Donaldson: There are other pioneers, even marketers like Bill Platz. I agree; I don’t want to credit just us, but I think we can celebrate the past.
LP Gas: What are your thoughts on the autogas market today? Do you have any thoughts on how it can grow?
Donaldson: The market over time has continued to grow and progress, thanks in part to OEM relationships. There are broader propane autogas offerings today than there were 10 years ago. For example, all three major bus companies offer propane options. We are in a more sustainable place than we were years ago, and I don’t see that going backward.
What you’ll see in the autogas sector is continued growth of product offerings targeted at fleets. I think we’ll remain focused on commercial fleet applications, primarily in the medium-duty market space. I am excited from the standpoint of where we are today versus where we’ve been or where we’re headed, which is expanding the offerings we have today to more OEMs.
Garner: As an industry, the key thing in my mind that we all have to focus on is recognition of the fact that economics are tight; end customer return on investment is the key to successful clean fuel vehicle growth. Another important factor for success is when the fuel marketers and fuel system providers work in concert to build fleet and fuel volumes. With gasoline and diesel prices down, the stakes are higher, but clean fuels can still work.
Donaldson: Years ago when we first started [to market autogas], we didn’t have as many [propane] marketers interested for a variety of reasons. But that’s changed. You’ve got guys across the country that are aligned with the market. They know what it takes to get involved and the service required. They know the volume they can get on a non-seasonal basis. You’ve got a core group of proactive autogas marketers moving forward to help grow this segment.
LP Gas: What are your thoughts on the future of the alternative fuels market overall?
Silio: We obviously wouldn’t be in the business unless we saw an opportunity here. Our mission as a company is to accelerate the adoption of clean fuels. We try to avoid the term “alternative fuels” when talking about natural gas and propane. In the applications we serve, the total life cycle cost of owning a natural gas or propane vehicle is often lower than for diesel or gasoline, so if anything, we think diesel and gasoline should be considered the “alternative fuels.”
As emissions regulations tighten, the acquisition and life cycle cost of diesel and gasoline vehicles keeps going up. Plus, a lot of fleets are starting to experience the real costs of diesel particulate filter replacement. Meanwhile, the total cost of ownership for propane and natural gas vehicles is going down, and it is improving rapidly for other clean fuels, too. We think as fleets become aware of the advantages of switching to clean fuels, they will realize there is money lying on the ground just waiting to be picked up.
Garner: Again, with emissions regulations tightening on diesel and gasoline, propane and natural gas will become more popular fuels. And even the diesel industry sees this.