Tom Fehsenfeld, president of Crystal Flash, is betting that propane fuel will become popular with commercial fleets in the coming years. Photo by Jim Gebben
Crystal Flash Energy, a Grand Rapids-based vehicle and home heating fuel distributor that operates throughout much of the Lower Peninsula, has signed on to be the exclusive Michigan dealer for Alliance AutoGas, which is active throughout North America and based in Asheville, N.C.
Alliance markets liquefied petroleum gas, also known as liquid propane, for vehicles. Also called autogas by the industry, it has been growing in popularity in Europe as a “greener” engine fuel that burns much cleaner and costs less than gasoline, according to Alliance AutoGas.
Autogas is not to be confused with compressed natural gas, which is primarily methane and requires much more pressure to keep it in a liquid state. Liquid propane is reportedly safer and “a much more convenient fuel to use,” said Tom Fehsenfeld, president of Crystal Flash.
Liquid propane has been used for many years to power lift trucks inside factories and warehouses because of its cleaner and safer exhaust and, decades ago, a few individual auto owners began converting their engines to it. It does require a separate tank in the trunk of those passenger cars, although the tank is not nearly as heavily built as those required for compressed natural gas.
The major source of propane is natural gas wells, “which is good news for those of us in North America because we have such a natural gas boom going on right now,” said Fehsenfeld. The propane is separate from the methane and other gases in natural gas. About 98 percent of autogas is made in the U.S., according to Alliance AutoGas.
Fehsenfeld said Crystal Flash is already supplying autogas to the Charlotte school system’s bus fleet and is in negotiations with a number of potential customers.
Propane autogas currently costs about $1.50 less per gallon than gasoline, according to Fehsenfeld. The energy content of a gallon of autogas is slightly less than gasoline so the miles per gallon are less, but he said the price difference still affords “significant savings.”
“We are working with a number of school systems right now to try to get their buses on propane. It’s a really good savings for them,” he said, noting that the Zeeland school system already uses autogas for its bus fleet, although the school system is not his customer.
He said a number of commercial fleets are also in touch with Crystal Flash and considering the conversion to autogas, “not only for the financial savings but because it’s also a much more environmentally friendly fuel” with less toxic exhaust emissions.
One downside is that gasoline engines must be mechanically converted to use autogas at a cost Fehsenfled said can run from $5,000 to $6,000 per vehicle. He said almost any gasoline engine can be converted to propane, but at this point, autogas conversions are most suitable, financially, for fleets of cars and medium or light-duty trucks and vans. Propane engines haven’t been perfected yet for the heavy, over-the-road semi-tractors, he added. Those are generally diesel engines.
“You have to drive enough miles to justify the cost of conversion (to propane), but a lot of fleets do,” said Fehsenfeld.
A major hurdle right now to fleet conversions from gasoline to propane is the required EPA approval paperwork, which he said is “slowing progress a bit, but we expect this will really be accelerated over the next year or so.”
Fehsenfeld said one example of a commercial company — “a pioneer” that has long used autogas for its truck fleet — is Schwan’s Home Delivery Service. Schwan’s is a Minnesota-based company that markets frozen and refrigerated foods to consumers door-to-door, and its trucks are familiar sights in West Michigan.
“We think one of the early adopters is going to be school systems, because they are under such pressure with their budgets and this is a clear money-saving idea for them. It also reduces emissions, which a lot of them are concerned about, as well,” he said.
Law enforcement is another potential market for propane autogas use, according to Fehsenfeld.
“An interesting market just starting to develop is fleets of police cars. Police departments seem to like propane because it’s very high octane, so you have excellent acceleration,” he said. He added a car engine can be modified to run on both propane and gasoline, so a car equipped with both types of fuel will have an extended range between refueling.
Fehsenfeld said a network of fueling stations for private owners of propane autogas cars is still probably three years away, which is why the marketing emphasis now is on fleets.
Some manufacturers, including Ford Motor Co. and Blue Bird school bus company, are already producing vehicles that can use propane. Blue Bird manufactures buses in Georgia and is a global supplier of them. Its propane autogas buses use technology developed by the Roush CleanTech company based in Livonia. Roush also has been working directly with Ford.
Crystal Flash had an excellent year last year, Fehsenfeld said, although the last decade was “a tough 10 years in Michigan.” He said fuel is a necessity for most people, which tends to insulate his industry somewhat from the affects of a poor economy. Agriculture also is booming in Michigan, and Crystal Flash is a major supplier of agricultural fuels, he noted.
Will Crystal Flash find new competitors cropping up in Michigan in the autogas market?
“We hope so,” replied Fehsenfeld. “I think it’s a growing market that really requires a lot of people to be working on developing it, and then things start to snowball. We welcome other people into the business.”
In fact, he said he is chair of the alternative fuels committee within the Michigan Petroleum Association, which is putting on seminars for other fuel distributors to learn about the potential of the autogas market.