Shifting gears on propane vehicle production - LP Gas
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Shifting gears on propane vehicle production
Low sales of propane-powered Ford and GM vehicles drive organization to promote conversion kits and boost nationwide fueling station infrastructure


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Sales of General Motors' new propane van, which is available in passenger and cargo configurations, have been disappointing.
Because sales of propane-powered OEM models from Ford and General Motors have been so poor, one industry vehicle promotional oganization is detouring away from Detroit to push aftermarket conversion kits.

The Propane Promotion Consortium was created by a handful of industry businesses with a stake in bolserting sputtering sales of propane vehicle nationwide. The group's leaders have since concluded that it makes better economic sense for ProCon to focus on obtaining certification for aftermarket engine add-ons while at the same time expanding the national infrastructure of propane fueling stations.

ProCon's executive director and lone full-time employee, Tammy Fiebelkorn, has left the organization and there are discussions regarding the organization's consolidation with the Propane Vehicle Council. The council's traditional role has been to lobby on propane's behalf before Congress and among various government agencies. ProCon's main thrust is to develop and promote commercially viable applications.

"ProCon is set up to put rubber on the road," says Joseph L. Colaneri, the council's executive director. "We're all working together on the same cause, but we're approaching it from different angles."

"We came together because the PVC was more focused on legislation and lobbying," explains Curtis Donaldson, a ProCon founder in 1999 and its past president. "There was a lack of attention toward getting vehicles on the road, so we started working hand-in-glove with the PVC. We all have a common interest in building the market."

The 13 founding firms included propane marketers and technology providers eager to get rolling on transportation initiatives such as propane-powered vehicles and a nationwide network of propane fueling stations.


The Propane Promotion Consortium wants to expand the propane refueling infrastruc-ture in order to stimulate sales of propane-powered vehicles. The chart shows the current number of LPG fueling sites listed by the U.S. Alternative Fuels Data Center.
Through a grant from the Propane Education and Research Council, ProCon helped fund the research and development of GM's propane-powered cargo and passenger vans. It also has promoted sales of a GM medium duty propane-powered truck.

"We don't care if it's Ford or GM-we just want it on the streets," says Donaldson.

Thus far, though, sales are deep in the dumper, as the OEM projects have not yet caught the fancy of the public, the automakers or even the propane industry itself.

"We don't have many propane companies out there stepping up to buy this stuff," laments William Platz, ProCon's president who has now taken over Fiebelkorn's duties as executive director.

"It shows a splintered (propane) industry," Platz contends. "I don't think it shows a united front for the propane transportation industry."

Platz's family firm, Delta Liquid Energy of Paso Robles, Calif., has purchased a propane-powered van, but the widespread lack of buyers seems to have doomed the OEM segment of this marketplace.

Small potatoes "The key lesson to be learned here is that the OEMs simply can't be bothered with this," says Platz. "The potatoes are just way too small for the OEMs to pick up on this market."

Ford was able to sell only 300 of its 2002 propane pickups, and sales of the Chevy Express and GMC Savanna vans have been equally flat.


Despite its performance advantages over competing alternative fuels and the opportunity for promotion, few propane retailers have been buying LPG vehicles.
Are the vehicles sitting unsold because the propane infrastructure is lacking, or is the propane infrastructure riding behind because there are not enough propane engines on the road?

"It's the age-old question of the chicken and the egg," says Platz.

"We're allowing a huge potential market for this industry to go by the wayside. We need the support of the industry; we need to buy the products," Platz warns.

Platz believes natural gas is poised to grab a giant portion of the alternative fuels market if propane fails to act decisively. "The propane industry is going to allow someone else to build a market. Everyone's waiting for someone else to make the first move."

One key move may be the shift toward aftermarket conversion kits. Platz is convinced that this concept can go the way of the Ford bedliner. As Ford executives took note that the automotive accessory aftermarket was going gangbusters over sales of drop-in and spray-on bedliners for its trucks, the automaker then included factory-produced bedliners within its lineup of OEM options.

Some of the key beneficiaries were the aftermarket makers of these bedliners who found themselves supplying the OEMs. So it may go with propane vehicles should demand be so inclined, Platz suggests.

Jumping on the bandwagon "If we build a successful aftermarket business the OEMs will jump on it," he says. "And I'm not in this to sell aftermarket kits; I'm in this to sell propane."

He makes a similar comparison to a propane dealer selling a furnace to a homeowner: It's not necessarily the initial order that boosts the business, it's the years of fueling that furnace that heats up the bottom line.

Propane and the motor car go back a long time. For example, in the 1950s Milwaukee had a fleet of 300 propane-powered taxis, while the Chicago Transit Authority boasted 500 propane-powered buses.

ProCon's push will remain concentrated on encouraging propane-powered fleet operations and the required components and fueling systems. Government fleets of all types, plus the specialized vehicles serving airports and other quasi-public entities, are under increasing federal pressure to reduce the levels of engine-produced air pollution.

PERC has recently awarded grants ranging from $135,000 to $300,000 for converting airport vehicles to propane (and constructing fueling stations) in Chicago and Austin, Texas. Alaska Airlines also has a PERC pilot project underway.

In mid-April, the Texas Department of Transportation was pondering the purchase of some 40 to 50 propane-powered GM Express and Savanna vans for rural bus systems, according to Bobby Wood, regional marketing coordinator for the Alternative Fuels Research & Education Division of the Texas Railroad Commission.

The vans, which are specially equipped with facilities for transporting handicapped people, were successfully demonstrated for other government and transit officials in Lubbock, Texas. ProCon had developed the van plan along with AFRED; Clean Fueling Technologies; the Texas Alternative Fuels Council; Quantum Technologies (IMPCO) of Cerritos, Calif.; PERC; GM; Texas A&M University and the U.S. Department of Energy.

Texas is No. 1 in the nation for propane fueling stations with 442 in place, according to the U.S. Alternative Fuels Center. The Texas Department of Transportation has 470 propane or LPG bi-fuel vehicles (and 537 CNG bi-fuel vehicles) in its fleet.

"We need to get the propane vehicles on the road. We've got the infrastructure here in Texas – even the president's ranch has a refueling station," Wood observed in reference to the propane-powered Ford pickup and related equipment donated to President George W. Bush.)



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