PROPANE: THE DARK HORSE FUEL
Driven by the global warming clock, the promise of energy security and the lure of untold profits, investors are betting billions of dollars on the race to find the ideal alternative fuel for cars, buses and trucks.
The list of contestants is long and growing. Corn ethanol? Cellulosic ethanol? Biodiesel? Compressed natural gas? Liquefied natural gas? Octanol? Hydrogen? Electric?
Three researchers at Argonne National Laboratory suggest in a new report that the transporation fuel of the future might be propane, the same stuff used for heating and cooking in cabins and trailer homes.
To my surprise, they report that propane is already the biggest selling alternative fuel in the world, powering more than 13 million vehicles worldwide. In the United States, about 160,000 vehicles run on propane, also known as liquefied petroleum gas or “autogas.” The state of California has about 1,600 vehicles that can operate on propane. In Europe, propane propels 7 million vehicles, including models manufactured by Ford and GM.
Propane has several virtues. It works well with only minor modifications to internal combustion engines. Although it has only 86 percent the energy content of gasoline, it has none of the range limitations of all-electric vehicles. It can be produced from ample supplies of domestic natural gas. And it’s nontoxic, noncarcinogenic and noncorrosive, according to the researchers.
The Argonne scientists report hat a vehicle powered by liquid propane made from natural gas would eliminate the need for equivalent petroleum imports and would cut greenhouse gas emissions by 18 percent or more.
Apparently ongoing research into applications of propane fuel is still being funded by the Propane Education and Research Act of 1996. Federal stimulus funds awarded by the Department of Energy last year will support a buildout of propane fueling infrastructure in 20 cities as part of a Clean Cities program. But the overall shortage of propane stations in the United States (2,400 versus about 160,000 gas stations) and the higher price of propane in some markets is deterring speedy progress.
The California Energy Commission calls propane “a low-emission, economic, and easily used fuel that can play an important role as an alternative, non-petroleum fuel for our state and the nation.” Everything hinges on whether the propane industry manages to change “can” to “will” in the near future. One thing’s for sure: the alternative fuels market can’t and won’t support more than one or two winners.
Gas-powered vehicle fleets target of sales
By Ryan Beene
Icom North America L.L.C.‘s CEO expects to double revenue this year to at least $16.5 million, driven by the New Hudson-based company’s new aftermarket sales strategy to convert fleets of gas-powered vehicles to its liquefied propane fuel system.
Targeting vehicle fleets for aftermarket sales is part of a broader strategy at Icom to increase business in North America.
About 80 percent of the propane fuel system components will be manufactured locally in the coming years, half of that at Icom and half sourced to suppliers. Components are currently manufactured by Icom’s parent company, Icom S.p.A., in Italy.
CEO Ralph Perpetuini said the company, which posted about $8 million in revenue last year, is already in talks with municipal departments, utilities and companies to convert gasoline-fueled vehicle fleets to Icom’s bi-fuel system, which enables vehicles to be fueled by either gasoline or propane.
Icom is also building a distribution network throughout the U.S. that will install the systems to convert fleets that buy Icom’s conversion kits.
The company expects the system will be well-received in the U.S., estimating revenue from the bi-fuel conversion system, which costs roughly $6,500 per vehicle, to be $6 million to $8 million in 2010.
The system is new to the U.S. market, but Icom’s global operation, which posted revenue of about $50 million in 2008, has already supplied the system to about 100,000 vehicles worldwide.
“The fleets are really interested in using the propane system on their vehicles because of the convenience,” Perpetuini said, adding that propane is less expensive than gasoline for fleet owners.
Perpetuini said his company will manufacture hoses, most of the propane fuel pump, filters, and assemble the fuel rail — essentially a pipe that connects fuel injectors through which fuel is distributed — locally as it builds up its operation.
Since its 15-employee operation opened in the spring of 2008, Icom North America has supplied liquid propane conversion systems — consisting of patented liquid propane fuel tanks, pumps, lines and injectors — to Livonia-based Roush Industries Inc. and Georgetown, Texas-based CleanFuel USA.
Those companies integrate and install the fuel systems on vehicle engines and market the propane systems to customers.
Roush uses Icom’s sub-system to convert a series of Ford Motor Co. trucks like the F-150 pickup and other heavy-duty trucks to propane, which Roush then markets for sale.
Icom also provides customized propane fuel conversion systems to school bus manufacturer Blue Bird Corp. for its propane-powered buses, which Icom North America Chairman Albert Venezio said is the largest propane-fueled vehicle program in the U.S.
He said the company is on track to increase sales to Blue Bird, Roush and Clean Fuel by $2.5 million in 2010
There are about 5,000 vehicles in the U.S. on the road using Icom’s liquefied propane system, and Perpetuini expects to convert 1,500 to 2,000 fleet vehicles by year’s end.
The national average cost per gallon of propane was $2.69 per gallon while regular gasoline cost an average of $2.64 per gallon, according to the Clean Cities Alternative Fuel Price Report from October 2009, the most recent report available.
Clean Cities is an industry-government coalition that includes the U.S. Department of Energy and more than 80 companies to promote clean technology.
Don Hillebrand, director of the Center for Transportation Research at the Argonne National Lab in Illinois, notes that a gallon of propane has less energy content than a gallon of gas.
On an energy-equivalent basis, it would take $3.72 worth of propane to get the same amount of energy as a $2.64 gallon of gas, according to the Clean Cities report.
The federal rebate on the price of fuel also expired at the end of 2009, making the cost at the pump higher now than just a few months ago, without the tax credits.
But that’s what a consumer would pay, and Venezio noted that fleet owners generally pay about $1.50 to $1.80 per gallon of propane, about 30 percent to 40 percent less than the cost of gasoline for fleets, he said.
Fleet owners can also receive federal tax credits of 50 percent of the cost of installing propane fuel systems for passenger vehicles and light trucks.
Heavy duty vehicles, like the Blue Bird school bus, are eligible for an 80 percent federal tax credit for the conversion cost, which is about $14,000 per vehicle.
About 22,300 liquefied propane vehicles were on American roads in 2008, or roughly 13 percent of alternative fuel vehicles, according to a 2009 presentation by Clean Cities.
That number could grow by 10 percent — 15 percent annually from 2012 to 2020, the report said — by targeting niche markets and pursuing other strategies like extending tax credits to lower the cost of the fuel and the cost to convert vehicles to propane.
Icom is pursuing what the Clean Cities report called a key part of that growth, targeting fleets of school buses, taxis and police vehicles.
Perpetuini said his operation is beginning to develop fuel systems for Ford’s 4.6-liter V-8 engine, which powers the Crown Victoria sedan, which is popular with fleet owners and commonly powers police cruisers and taxi cabs.
“That’s probably the better market for LPG,” Tim Standke, director of automotive operations for Santa Ana, Calif.-based Impco Technologies Inc., said of targeting fleet sales by designing a 4.6 liter V8 engine conversion system.
The market for propane fueled vehicles is only now starting to truly emerge, he said, and fleets can achieve a number of benefits from converting to propane.
“The biggest advantage is that they’re going to save money” with propane compared with the cost of gasoline, Standke said. Another benefit is that nobody can steal a fleet’s fuel supply.
Bi-fuel systems may also be appealing to fleets that operate in an area with poor propane infrastructure or if drivers often have unexpected trips that deplete the propane fuel.
“In areas where you just plain run out of LPG, you can run on gas until you get to a station,” he said.
Ryan Beene: (313) 446-0315, email@example.com
|CHANTILLY, Va. & NEW HUDSON, Mich., Mar 03, 2010 (BUSINESS WIRE) — Icom North America, a leader in alternative fuels, will bring its patented liquid propane injection technology with its environmental and fuel economy benefits to the U.S. automotive aftermarket.|
At the two-day Propane Engine Fuel Summit, in Chantilly, Va., outside of Washington, D.C., Icom CEO Ralph Perpetuini announced that his company will begin offering both mono-fuel and bi-fuel versions of its liquid propane injection system and fuel tanks for installation on vehicles in service.
“The Icom JTG Propane Liquid Injection System can be installed on virtually any gasoline vehicle with multi-point injection,” Perpetuini said. “It will have excellent drivability, performance and torque, with reduced emissions. The gasoline mode is not disturbed; it can still be used.” “It’s especially suitable for fleet vehicles, including taxi and livery; law enforcement; state, county and municipal vehicles and other high mileage vehicles,” he said. The company is preparing for U.S. Environmental Protection Authority and California Air Resources Board certifications of the most popular fleet vehicles.
Icom’s system is in service on more than 100,000 vehicles globally in the bi-fuel (also called “hybrid”) version. In the U.S., some 5,000 vehicles have been converted to propane use in the mono-fuel application.
“The Icom JTG approach is very innovative,” explained Perpetuini. “It injects liquid propane (not vapor) through an actual injector in the vehicle’s manifold.
The vehicle’s OEM powertrain control module (or “brain”) controls our system, eliminating the need for additional computer mapping. Installation is fast and simple,” he said.
Icom JTG is available in more than 15 countries, through a large network of installation centers.
“We have begun to expand our professional sales, installation and service network in the U.S.,” Perpetuini said. “We have found a high level of technical expertise among our first partners. Many are propane fuel providers capable of providing a one-stop service for fleets.” The company is interested in working with professional installation centers, propane fuel supply companies and fleets nationwide.
Icom North America, LLC, founded in 2004, is the U.S.-based partner of Icom S.p.A. of Italy, a pioneer in the development and manufacture of liquid propane gas conversion systems and tanks for commercial and passenger vehicles. The company assembles the Icom Liquid Injection Propane system and additional Icom products, including the proprietary Icom toroidal and cylindrical propane tank, for commercial and passenger OEM and aftermarket vehicles in North America and selected other markets. North American headquarters are in New Hudson, Michigan.