March 25, 2011
technology review | Alternative Fuels in Logistics

Propane: Not just for lift trucks anymore

Propane: Not just for lift trucks anymore

While many in the logistics world still think of propane as a fuel for forklifts, that's only part of the story. It's also being used as a clean, cheap source of power for over-the-road trucks.

By Susan K. Lacefield

Long before the EPA's SmartWay program, carbon mapping, and hybrid electric trucks, Schwan's Home Service trucks were running on an alternative fuel. But the fuel wasn't ethanol or biodiesel or one of the others you might expect. It was a fuel that's more often associated with lift trucks than their over-the-road counterparts: propane.

Why propane? "It started back in the '70s when ... fuel prices were rising," explains Jeff Schueller, director of fleet maintenance for Schwan's. "Marvin Schwan, the founder of the company, did not want the fuel prices back then to affect his company's growth and the routes that he was building, and so he looked for a more economical way to run the equipment."

Today, 75 percent of the 6,000-plus trucks in the company's fleet run on propane. That includes both the medium-duty vehicles and the light-duty trucks Schwan's uses to deliver its flash-frozen food to homes in suburban neighborhoods and rural areas throughout the country.

Does propane still have the cost advantage over mainstream fuels 35 years later? Schueller says it does. "Every year, we do an analysis—diesel vs. propane, or diesel vs. gas and propane—and operationally, the numbers continue to show that it is more economical for us to operate on alternative fuels," he says.

Cheap, clean, and available
While many in the logistics world still think of propane—also known as liquefied petroleum gas (LPG) or propane autogas—as a way to power forklifts, that's only part of the story. It has long since moved out of the warehouse and onto the highways. Today, there are approximately 15 million over-the-road vehicles running on propane worldwide, according to the Propane Education & Research Council (PERC), making it the third most-popular fuel source for vehicles after gas and diesel.

In the United States, most of the uptake has been in the commercial (as opposed to passenger) vehicle sector—particularly among fleets whose vehicles operate within a fixed range. For the most part, the vehicles running on propane are light- and medium-duty trucks.

For fleet owners, much of propane's appeal is its low cost. According to PERC, the price of propane tends to be about 30 percent below the national average price for gasoline.

And it's not just cheaper; it's cleaner too, advocates say. Depending on the application, propane-fueled vehicles generate 17 to 24 percent fewer greenhouse gas emissions than their gasoline-powered counterparts, says Brian Feehan, vice president of PERC.

Another advantage is that 90 percent of propane is derived from sources in the United States, which minimizes the risk of supply disruptions caused by geopolitical events. In comparison, the United States imports roughly 60 percent of its petroleum.

On top of that, propane is readily available. The lack of refueling infrastructure that has hampered the adoption of some other alternative fuels, like hydrogen, is less likely to be a concern with propane. Although most propane-based fleets handle refueling at the company's own locations, that's not their only option. A network of public fueling stations already exists. According to the Department of Energy, there are 2,500 propane refueling stations throughout the country.

Bumpy road to adoption
Yet for all its advantages, propane has made only limited inroads in the U.S. over-the-road truck market. Although it appeared to be poised for takeoff following the OPEC embargo and resulting oil crisis in the '70s, interest faded once oil supplies loosened up and fuel prices retreated.

Historically, this hasn't been the easiest of routes for a fleet manager to pursue. While propane itself may be relatively inexpensive and widely available, that's not necessarily true of the trucks that run on it. Even today, a fleet manager contemplating going over to propane will face a number of hurdles.

For one thing, the vehicles carry a high price tag. Propane-powered trucks cost on average $6,500 to $11,000 more than gasoline-powered ones.

For another, there's vehicle availability. Although Feehan says things are starting to change, one of the biggest barriers fleet owners have encountered to date has been simply finding a propane-powered truck that meets their needs.

Some companies have solved the problem by converting gasoline trucks to propane. Schwan's, for instance, buys its fleet vehicles with their original gasoline systems intact and uses certified technicians to install a liquid propane injection system. "Basically it just adapts right to the engine and wiring harness without any alterations to the original equipment," says Schueller.

"[Conversion] is not difficult to do," agrees Feehan. "The difficult part is getting the vehicle certified in terms of durability, drivability, emissions-testing compliance, and EPA standards. Once that's done—and that's usually [handled] by the fuel-system manufacturer—it takes eight hours for a certified installer to put in the fuel system."

But that still leaves the question of service and repairs. With propane not yet in widespread use, it's not always easy to find technicians who are familiar with the fuel and willing to work with it. To build a repair network, Schwan's ended up training potential service providers itself.

Although Schueller says the training required was minimal, he acknowledges that the prospect of starting over with, say, hydrogen or natural gas has deterred his company from investigating other alternative fuels. "After three decades of use, we have a well-trained [repair] network [staffed with operators who are] knowledgeable in that arena," he says, "so it hasn't been conceivable to start in with another alternative fuel system at this point."

The road ahead
When it comes to propane's prospects for widespread adoption, the biggest impediment of all may simply be a lack of visibility. In the trucking industry, overall awareness about propane remains low compared with other alternative fuels. The American Trucking Associations, for example, has published white papers addressing alternative fuels such as biodiesel and natural gas, but not propane.

A related problem is outdated perceptions about propane. Many people don't realize how much the technology has evolved since the '70s, advocates say. Feehan points to vehicle acceleration as an example. Although earlier propane vehicles didn't offer as much horsepower as their gasoline-powered counterparts, advances in liquid injection technology have essentially erased the difference, he says. Today, propane vehicles mirror gasoline models in terms of horsepower and acceleration. But Feehan adds that it's often necessary to get people to demo the vehicles to convince them of that.

To combat outdated perceptions and re-establish propane's credibility as a transportation fuel, the propane industry has made a concerted effort to educate the market over the last five or six years, says Feehan. And it appears the effort may be paying off.

One indication is the expanded availability of propane autogas vehicles. Roush CleanTech, a division of Roush Industries, now sells propane-powered light- and medium-duty Ford trucks and vans, while CleanFuel USA offers light- and medium-duty GMC trucks.

This past February, snack maker Frito-Lay announced that it would begin piloting a Ford E-350 light-duty truck from Roush that's powered by liquid propane autogas. If the pilot produces the expected cost and environmental benefits, Frito-Lay says it could convert as many as 2,000 gasoline-powered trucks to propane over the next few years.

These and other market developments have led at least one observer to conclude that propane's day may finally have come. "With the industry initiatives to go green, I would advise companies to consider propane," says Schueller. "In addition to conversion kits, the major manufacturers, Ford and GM, are going to be offering the option for fleet owners and buyers in the future. I think with the rising gasoline [prices], propane is a very viable option."

About the Author

Susan K. Lacefield
Senior Editor
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.

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