A novel approach to the alternative motor fuels marketplace

January 24, 2014 By and    

A Pennsylvania propane retailer is meeting customer needs by offering autogas and compressed natural gas at a new $4 million complex

A propane retailer in Pennsylvania is putting the pedal to the metal within the alternative motor fuels marketplace by dispensing compressed natural gas (CNG) along with autogas.

“I want to do CNG and propane both – whatever they want, I want to be there for my customers,” says Glenn Zimmerman, owner of Martindale Propane Inc. in New Holland, Pa., and the just-opened CNG of New Holland facility.

Located about halfway between Philadelphia and Harrisburg, Pa., the area is undergoing residential and commercial development that has been attracting forward-thinking businesses and homeowners who appear poised to embrace the environmental, economic and performance benefits presented by the two non-gasoline energy sources.

Zimmerman, his wife Joyce and their staff of 18 employees working behind the wheel of 15 bobtails have consistently prided themselves on providing stellar customer service, and that philosophy is driving the company’s route toward serving the vehicle fuels segment.

“I wanted to get into something different – getting a whole new customer, someone nobody in the neighborhood already has,” Zimmerman says. “There are fueling sites in Philadelphia and South Jersey, but around here there’s nothing.”

“Doing the CNG and propane together is a novel approach. It’s an incredibly interesting twist,” says D.D. Alexander, president of Global Gas Inc., which is Zimmerman’s LP gas supplier.

Venturing into autogas can deliver “a more constant revenue stream than the seasonal stream that we’re working with now,” she says, adding that it remains to be seen if any cannibalization occurs between the two fuels.

“If you put in CNG, are you shooting yourself in the foot with propane? I’m hoping that they will complement each other,” Alexander adds.

CNG is better suited for the big semi rigs, and any CNG/LP gas overlap would probably only happen between cars and smaller trucks, according to industry consultant Rick Bunn, owner of Advanced Clean Energy Solutions in West Chester, Pa.

“It’s worthy of consideration because it’s a business opportunity to offer fuel,” says Bunn, who builds both propane and natural gas facilities, including the Zimmerman complex.

“It makes a lot of sense,” Bunn adds. “There are a lot of transportation-based operations around here, and some are considering alternative fuels and some have already taken steps toward alternative-fueled vehicles, ranging from pickup trucks to class 8 tractors.”

A propane marketer contemplating a similar move should delve into the particulars of the local vehicle scene, Bunn suggests.

“You have to define the market that you’re going to pursue,” he says. “It’s a statistical analysis and demographics” that dictate how a facility should be outfitted, paying attention to the sizes of the area’s vehicles and other business factors.

With the Zimmerman site, “We felt there was a strong enough case for both fuels,” says Bunn, adding that the population of alternative-fueled vehicles is likely to increase when there is a convenient location to gas up.

“If there’s no refueling available, people won’t even consider that as an alternative” when purchasing a new car or truck, he says.

Although Zimmerman is chiefly targeting commercial fleets, several individuals who own CNG or propane autogas pickups and cars are already patronizing the pumps weekly. Zimmerman also owns a Ford F350 CNG service truck and a CNG F250 pickup.

On the fleet side, a local waste disposal company is buying 14 CNG trucks, and a produce hauler is in line to purchase 10 new CNG vehicles. A dairy transport service also holds promise along with other trucking firms.

Bunn anticipates that alternative fueling in general will greatly accelerate within two or three years.

“It’s picking up,” Zimmerman says. “It’s a slow grind, but I knew that from the get-go. We expected that.”

He encourages others in the industry to follow his lead.

“Alternative fuel is something propane dealers should be getting involved with,” says Zimmerman, citing a new market that can be cultivated. “Instead of stealing someone else’s customer, I would try to get a new customer.”

Finding a niche
By all accounts, Zimmerman’s new $4-million CNG of New Holland/Martindale Propane complex is extraordinary. (The previously existing Martindale Propane operation, which was also constructed by Bunn, has been moved and combined with the CNG station on a multi-acre site along a busy highway.)

“The facility is amazing,” says Jim Boese, vice president of operations at Global Gas, who attended the grand opening ceremony in October. “He spared no expense and he did an A-plus job on every aspect.”

“Here’s a guy who is putting his money where his mouth is,” Alexander says. “This guy has built an incredible propane business, and if he has half the success with CNG he’s going to set the world on fire.”

Established in the mid-1990s, Martindale Propane generated explosive growth because of Zimmerman’s relentless focus on serving the customer base, which includes a large Amish population in the Lancaster, Pa., area, according to Alexander.

“It’s a huge operation, but he runs it like a small operation,” she notes. “They have a really vested interest in customer service. He has gone out and found his niche, and he really works it.”

Zimmerman credits his wife and the staff: “If you’re in business, you need to surround yourself with good people. Service still sells, and service is the key to having a good business.”

He also points to a policy of selling propane tanks to the accounts rather than retaining ownership of the vessels, which gleans additional profits.

Fast filling
The pumping element consists of a canopy covering a single propane dispenser with two hoses along with a two-hose CNG dispenser. It is not technically a “gas pump” because the CNG is transferred into a vehicle’s tank through pressure differentials.

A key card access system allows 24-hour service, while “fast-fill” capability delivers seven gallons per minute, which Alexander says is an important selling point for commercial fleets.

“Nobody wants an 18-wheeler to sit there for three hours,” she says.

The natural gas arrives at the property via a gas main installed by the local utility. Two 250-horsepower CNG compressors serve three aboveground tanks with a total capacity of 275 gallons. Two 30,000-gallon propane tanks handle both the autogas and retail loads.

Planning and execution of Zimmerman’s complex took 18 months to two years, according to Bunn, who says the typical time frame is eight months to a year, and the costs will vary depending on the size and scope of an operation. A fast-fill facility can range from $1 million to $2 million, while a slower “time-fill” operation costs $500,000 to $600,000.

Photo courtesy of Global Gas

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