Pay at the pump

May 1, 2003 By    

Imagine hordes of hurried motorists pulling into gas stations and filling their tanks with propane. Gas-and-go with the swipe of a money card. Think of all the clean-burning gallons that would be consumed should propane become commonplace as an American automobile fuel – to say nothing of the auxiliary LPG business that a public primed for propane would support.

This self-serve, pay-and-pump concept is gaining crucial traction under a program driven by CleanFuel USA and an assortment of government agencies and industry participants, including Delta Liquid Energy of Paso Robles, Calif. Other areas of the country also are seeing a pumped-up presence of quick-and-easy propane dispensers.

In the Golden State, CleanFuel and the California Energy Commission have just made it easier to drive environmentally sound propane-powered vehicles with three new card-reader pumps, now up and running 24 hours a day, seven days a week. The user-friendly dispensers from Clean Fueling Technologies and Marconi Commerce Systems (formerly Gilbarco) are serving propane customers at Main Street Shell in Santa Maria, Madonna Shell in San Luis Obispo and Delta Liquid Energy in Paso Robles.

Bill Platz (left), president of Delta Liquid Energy and a CleanFuel USA business partner, shows off the new card-reader pump that allows propane motorists to refuel with the same ease as any gasoline station.
Bill Platz (left), president of Delta Liquid Energy and a CleanFuel USA business partner, shows off the new card-reader pump that allows propane motorists to refuel with the same ease as any gasoline station.

The state’s Energy Commission provided the funding for the project under its Petroleum Displacement Program. CleanFuel applied for grants last year as a part of a nationwide effort to increase the use of propane-powered vehicles. A key selling point is that the propane dispensers function exactly like self-serve gasoline pumps.

Until now, most propane-powered vehicles have had to fill up at technician-assisted locations that typically close in the evenings and on weekends.

“We’re trying to remove the impediment of propane refueling inconvenience,” says William Platz, a CleanFuel business partner and Delta’s president. “We are in the process of installing 12 more sites throughout California, and we’re growing our network in Arizona and Colorado.”

After the grand opening ceremonies were completed in California.
After the grand opening ceremonies were completed in California.

He notes that on a given March day in Paso Robles, gasoline was retailing for $2.15 a gallon while propane sold for $1.30.

The initial customer base for the new pumps includes trucks from the California Department of Transportation, school buses, car pool vans and food service delivery trucks belonging to the Schwan Food Co. Airport shuttles and vehicle fleets from universities are also on the list of propane-fueled patrons. Cal Trans operates 1,600 Ford F-150 bi-fuel propane-powered light duty trucks, representing a base load of 4.8 million gallons per year.

Schwan’s has a nationwide fleet of 7,000 propane-powered vehicles that eat up a combined 709,500 miles each day, using 45 million gallons of propane per year. “If there are more refueling facilities available it makes it easier for us to gas up,” reports John Nabholz, the company’s corporate communications director (See related story on Page 20).

CleanFuel has six propane refueling sites in Colorado, one at Glacier National Park and four in Arizona. Targeted markets through 2004 include Atlanta and locations in Dallas, Houston and Austin, Texas. Propane dispensers to be added in California include sites in Fairfield, Santa Clara, Bakersfield, Pomona, Santa Barbara, Arroyo Grande, Valencia, Sacramento and Los Angeles. Negotiations are currently underway to bring the pumps to Chicago.

The new, automated propane dispensers got a quick tryout from local motorists.
The new, automated propane dispensers got a quick tryout from local motorists.

Business model

“CleanFuel USA has a business model that they’ve been able to prove,” reports Brian Feehan, executive director of the Propane Vehicle Council, which is working with the Propane Education and Research Council and the National Propane Gas Association to further propane’s role as a viable motor fuel. “This will help CleanFuel USA as well as the whole industry.”

“Being more consumer friendly with our fueling is something we’ve needed for a long time,” says Larry Osgood, a PERC consultant. The current push with the propane pumps “goes hand-in-hand with the potential growth” that a thriving motor fuel market could bring to the industry, he adds.

An annual growth rate of 10 percent to 20 percent within this segment is within reach, Osgood suggests. “The motor fuel market will grow significantly within the United States,” he predicts.

“It would be very profitable for the industry, but it wouldn’t happen fast enough to create disruptions or difficulties for the industry,” Osgood says.

Structuring infrastructure

While popular in Europe and other countries around the globe, propane-powered cars have yet to crowd American roads. Foreign governments tend to spend more tax dollars on programs that support propane as a motor fuel, while consumers enjoy a suitable service and fueling infrastructure. In the U.S., the nagging “pump on a stick” inconvenience in buying propane motor fuel does little to send these types of vehicles flying off showroom floors – providing, of course, that auto manufacturers even produce them in sizable numbers.

“We have to show that we have stations in place to build upon,” says Steve Moore, executive vice president at Mutual Propane, a California-based supplier of propane equipment, including vehicle and forklift fueling stations and propane carburetion parts.

“We’re setting the stage for future vehicle introductions. We expect that more propane vehicles will come to the marketplace” as people see propane’s financial and environmental benefits within the framework of an acceptable infrastructure.

Feehan agrees. “There are significant savings to be achieved by using propane. The increased gasoline prices that we’ve seen in the United States makes our product even more attractive.”

Feehan, formerly projects director for the World LP Gas Association in Paris, is lobbying the U.S. Congress in support of the Clean Efficient Automobiles Resulting from Advanced Car Technologies Act. Propane is among the alternative fuels included in this package of tax credits and incentives. At press time both chambers were weighing the measure, as part of the legislative editing process. Citing widespread bipartisan support, Feehan believes the Clear Act may become law sometime this summer.

Osgood contends that passage could spark propane’s prospects for mass acceptance. “That’s absolutely the key — if we get that we’ll have a successful motor fuels market,” he says.

“If we could get this bill passed that would be the icing on the cake,” says Curtis Donaldson, president of CleanFuel USA and Clean Fueling Technologies. His involvement with the propane dispenser projects has him enthusiastic over the measure’s impact on the advancement of propane gas stations across the land.

“Our industry can take advantage of that tax credit for the bobtails that we drive,” he notes. “What a great time to bring up a bill about energy independence. This is a red, white and blue bill.”

You’ve seen them all over the road: Some 7,000 propane-powered home delivery and route trucks all bearing the famous Schwan’s label. With 7,557 vehicles in the motor pool, the Schwan Food Co. has the largest privately owned commercial fleet in the world, according to the U.S. Department of Transportation.

The familiar Schwan's logo has been riding on propane power since the gasoline crisis of the early 1970s.
The familiar Schwan’s logo has been riding on propane power since the gasoline crisis of the early 1970s.

When the Propane Education & Research Council inaugurated its “Propane. Exceptional Energy.” Fleet Award in 2001, Schwan’s was honored for its longtime commitment to LPG as a viable motor fuel.

Bi-Phase Technologies, a QS-9000-certified operation based in Minnesota that produces gasoline-to-propane engine conversion systems, is a Schwan’s subsidiary. The QC designation is based on ISO-9001 standards with additional quality requirements for product design and development, process control, customer satisfaction and ongoing process improvement.

Part of that process is making sure that the numerous Schwan’s frozen food lines are delivered on time. Most of the Schwan fleet is equipped with conversion kits from Bi-Phase, and management reports stellar results regarding reliability from both Bi-Phase and propane itself.

“After more than 2 billion miles logged on propane, we know we’re making a very positive contribution to both clean air standards and our bottom line,” says Alan Macht, a Schwan executive who claimed the PERC award at a National Clean Cities Conference. “Propane is the safest, most cost-effective and environmentally smart choice in motor fuels,” he points out.

Propane is especially coveted because it’s domestically secured and relatively stably priced, according to John Nabholz, the company’s communications director. “It’s easier on the engines, too,” when compared with other motor fuels, he says, “Schwan’s has been a leading player in propane for about 30 years,” Nabohlz recounts. The company’s late founder, Marvin Schwan, chose propane as his fuel in the wake of the 1973-74 Arab oil Embargo that sent gasoline prices skyrocketing and led to long lines at the pumps.

Nabohlz describes Schwan as “passionately independent.” He stayed with propane after the crisis, setting up dispensing facilities at each of the company’s distribution centers and making arrangements with propane retailers throughout North America.

The sheer volume of Schwan’s propane use – now up to 45 million gallons a year – makes the CleanFuel USA addition of card-reading, gas station-style propane pumps an attractive logistical plus for the company’s routing efficiencies, Nabohlz notes.

Frozen assets

Marvin Schwan got his start in 1952 as a “one man and a truck” dairy home delivery service in Marshall, Minn. His dilapidated 1946 Dodge panel van eventually grew into the planet’s top privately owned commercial fleet. Last year the company, now with more than 24,000 worldwide employees, celebrated its 50th anniversary.

The Schwan’s Home Service division delivers more than 300 frozen food products directly to the consumer. The 6,720 propane-powered trucks log an average of 610,000 miles per day. In a year’s time, they travel 145.8 million miles – enough to circumnavigate the Earth 6,075 times.

Some 740 propane-powered trucks are driving sales for Schwan’s Consumer Brands unit, which markets retail grocery products such as Tony’s pizza, Red Baron pizza, Chicago Town pizza, Freshetta pizza, Pagoda Asian specialties and Larry’s side dishes. It also has a division that supplies frozen foodstuffs to institutional customers and chain restaurants. Still based in Marshall, Schwan’s has operations in 57 countries. It is the largest employer in Marshall; Salina, Kan.; Florence, Ky. and Pasadena, Texas.

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