It’s All Good

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An often-cited perception is that “greening” any business invariably drives the business’s costs higher. But managers at two refuse companies that have made a major commitment to natural-gas vehicles (NGVs)—Republic Services Inc. and Choice Environmental Services Inc.—point out that adopting these vehicles is not only the right thing to do, but it also makes financial sense.

Phoenix-based Roy Svehla, senior manager of fleet maintenance for Republic, reports that the company operates more than 500 NGVs nationwide, mostly in coastal areas. “The West Coast has traditionally been more progressive on emission requirements and has really set the standard for the rest of the country,” he says. “They’ve been tighter than the rest of the country forever, but they’ve really been pioneers in terms of alternative fuels.” Republic has begun replacing some diesels in Denver, CO, and Boise, ID, and also operates 41 NGVs in Florida. The driver for adoption has been that of communities that want to go green, Svehla adds.

In Florida, Republic purchased natural-gas-powered Mack TerraPros equipped with Heil automated sideloader bodies in 2010 after agreeing to a new residential trash collection with Polk County that required both natural-gas fuel and automated collection. “From a business perspective, we knew that this would be a very competitive bid and we had to find a method collection that would allow us to be cost-competitive, and one of the factors that played into that is the operating cost of natural-gas vehicles in terms of fuel cost versus the traditional diesel,” says Dave Kutschinski, assistant general manager of Florida Refuse Division operations for Republic. He adds that pro forma financial projections using cost data from Republic’s other regional operations indicated that NGVs would give the company a competitive advantage in Polk County.

“The other issue that comes into play is that you reduce the volatility of fuel costs because it is a home-grown energy source, if you will,” Kutschinski says of natural gas. “If you look at a 15-year price of volatility chart, you see that natural gas does not have nearly the up-and-down swings that you see in diesel.

“We are an environmental services company, and an environmental impact that drove the decision was the reduction in emissions, but another issue we looked at was the cost of operation as it relates to maintenance,” Kutschinski continues. “There was also the extension of oil-change intervals. Because natural gas is a cleaner fuel, we’re not putting some of the materials that diesel creates into the oil, which causes you to change your oil more frequently. So we know that we are saving financially by not changing the oil as much, but you also are not creating waste oil that’s got to be handled on a more frequent basis.”

NGVs are not a new concept to Republic on the West Coast, notes Pleasanton, CA–based Brian Beaudrie, regional maintenance manager, pointing out that the South Coast Air Quality Management District mandates that Republic use alternative-fuel vehicles. Beaudrie’s regional operations, which currently run about 250 NGVs out of 10 locations, compared with a total of 3,400 trucks at 68 locations in nine states, used Dual-Fuel, a combination of natural gas and diesel, in the mid-1990s. According to Beaudrie, Republic experienced considerable maintenance problems with this fuel source, and in 2001 the company purchased about 40 trucks powered by liquid natural gas (LNG) for its location in Fairfield, CA. But engine problems and the need to have large quantities of LNG trucked in and stored mitigated the cost benefits of natural gas as a fuel source, Beaudrie says.

Following Republic’s 2009 acquisition of Allied Waste in 2009, the new management team decided to increase the number of NGVs throughout the new company. Republic utilizes Autocar chassis and either Heil or McNeilus bodies; the trucks are powered by Cummins Westport ISL G engines that are engineered to run on compressed natural gas (CNG). Beaudrie notes that his NGVs provide plenty of horsepower and torque.

Simply operating as an environmental services company was enough for Choice Environmental to add a dozen NGVs to its Fort Lauderdale, FL, fleet in late 2009. By the end of 2010, the company anticipated adding a 13th NGV and having a total of 30 in two years. Choice has already applied for a state grant to set up a CNG fueling plant at its Miami-Dade operations so that it can add NGVs there.

Glen Miller, Choice Environmental’s chief executive officer, whose company has about 150 trucks, more than 300 employees, six hauling locations, and three recycling facilities serving about 200,000 customers in southern Florida, sought to reduce the carbon footprint in the cities that Choice serves. He reports that acquiring NGVs has greenhouse gas emissions by at least 25%. Miller says that financial considerations also played a role in the adoption of NGVs. When diesel went above $4 per gallon in 2008, Choice began looking for a sustainable fuel alternative. Also, “After going through several hurricanes in 2005 when we had them coming through here like crazy, fuel was very hard to get,” Miller says. “Knowing that we could have fuel pumped right into our yard and process it right there was a big benefit for us.” A couple of years ago, the nearest CNG supply was in Atlanta, but Choice has since developed the necessary infrastructure to fuel its NVGs locally.

Gas Infrastructure and Pricing
A company with specialized expertise in constructing a CNG plant was needed to provide Choice with refueling infrastructure on the site of its Fort Lauderdale headquarters, and the company awarded a contract to Seal Beach, CA–based Clean Energy. “We decided that we do garbage really well, but we don’t know natural gas all that well and we’d better get the professionals,” says Miller. “We looked at two or three outfits to set up a plant for us, and Clean Energy presented a turnkey solution and gave us the comfort level that they could deliver on time.”

Choice had the CNG plant constructed along with a pipeline to the local gas company’s gas main located about a mile away, reports Ray Peraino, the company’s director of special projects. One main compressor is used for an overnight or “time-fill” process taking four to seven hours with another compressor serving as a backup. If needed, both compressors can be utilized if enough trucks require refueling at a given time. The plant also has a “fast-fill” port that can divert the entire fuel source to one truck, refueling it in about 15 minutes during a shift if necessary. Either way, no large storage tanks are needed—the plant compresses the natural gas on the spot.

Page Break LinePeraino points out that a plant like the one constructed in Fort Lauderdale can be designed for various combinations of time fill and fast fill. The capacity of the compressors depends on how much fast-fill capability management wants.

Svehla says that Republic has given some thought to ensuring that refueling during a shift is kept to a minimum. “One of the limitations of natural-gas vehicles is that they have to have enough range that you don’t have to refuel during the day,” he says. “What we try to do is give them the same capacity and range as if they had a diesel tank. You can control that on the front end by speccing the capacity of the gas that they carry—you don’t want to limit their range for good reason.” Svehla adds that he has noticed that a fast fill is not as complete a fill as a slow fill.

“When we specced these trucks for natural gas, we had to take into account what capacity we would need in order to allow our trucks to go out in the morning and come back again that day without having to fuel throughout the day,” adds Kutschinski. “We make sure that we have 60-gallon diesel-equivalent tanks for natural gas. For the most part, that gets us through the day. If we run into a situation where a truck has runs of extended hours, we have four stanchions for fast fill, and within 20 minutes they can go from empty to full. The compressor is sized according to the size of fleet you anticipate you’re going to run.”

Kutschinski contends that entering a long-term agreement for natural gas can make a firm less susceptible to the fuel price fluctuations inherent in diesel pricing. “We negotiate distribution costs for diesel costs with large suppliers across the country,” he says. “However, we know that diesel is subject to daily fluctuations in the market, whereas with natural gas you can negotiate longer-term, more stable contracts that lock in your pricing for a longer time. That in itself provides stability so that you can you can project and budget your expenses accordingly.” Republic’s Florida operations are served by TECO Energy and the gas provider’s Peoples Gas division negotiates agreements on delivery and pricing of natural gas that gets piped from Louisiana and Texas.

Less Maintenance, More Enjoyable Driving
A major benefit of adopting NGVs is the potential for reduced maintenance, according to management at Choice and Republic. This also creates the potential for less environmental waste resulting from repairs.

Peraino reports that, after 13 months of operating NGVs, the maintenance staff at Choice says that the engines on the trucks are cleaner than the diesels. Even the oil is cleaner, Peraino says, and Miller adds that the company has been able to extend its oil-drain intervals.

Anthony Cillo, Choice’s fleet manager, drove a refuse truck for many years and still test-drives the company’s NGVs after they are maintained. Cillo says that Choice worked out a few early glitches on the engines with its Autocar and Cummins dealer Expert Diesel, Hollywood, FL. “There are no fumes,” Cillo says of the company’s NGVs. “They run very, very clean. It takes a little getting used to as far as acceleration. Once you put your foot down to the floor, you get a little dead pedal where all of a sudden they surge and they jackrabbit. You’ve got to drive a little bit differently, but once you get used to it, they run pretty well. At idle, it works a little differently from a normal diesel engine, so if you’re doing municipal work, you have to know how to use the throttle without surging it too much so that you use a lot of fuel.”

Regarding maintenance, “When we do our intervals and we drain the oil, we’re seeing the oil go into the oil pan much cleaner than a diesel engine,” says Cillo. “When I pull certain filters, they’re coming out very, very clean. They do have to be changed, but it’s a much cleaner operation. I’m not seeing as much oil and soot on the engine.”

In Boise, Republic acquired 36 NGVs starting in April 2009 as part of its 135-truck fleet. “It’s a lot cleaner to change oil and filters and the oil comes out relatively clean,” says Billy Cecil, maintenance manager. Unlike injector-equipped diesel engines, the NGVs’ engines require spark plug changes every 1,350 hours at a cost of $360 in new spark plugs. “The plugs are not a big deal,” says Cecil. “If you look at the performance, the way the engines run, the efficiency, the quietness, it’s a win-win.”

Another incremental cost involved in the Boise operation’s acquisition of the NGVs was the need for mechanics to be trained on maintaining the new engines at a cost of $1,300 each. Cummins Westport sent trainers to Boise, because between Republic and the local bus company—which also purchased buses that run on natural gas—enough mechanics needed training.

Page Break LineSvehla sees benefits in switching from diesel to natural gas from both an environmental and a maintenance standpoint. “Those engines do run cleaner than diesels, and they produce less soot that would end up in the oil pan,” he says. “We’ve looked at extending oil drain intervals—that’s another good green initiative. Also, they don’t carry DPFs [diesel particulate filters] with them, so there’s no DPF to clog up or service.”

Kutschinski confirms that Republic has been able to extend oil-change intervals on NGVs compared with diesels in Polk County, FL. For a truck logging 2,500 hours a year, the Florida Refuse Division changes the oil at intervals of 600 to 700 hours, which equates to about one or two fewer changes per year than on a diesel. The savings is about $400 per oil change, or about $400 to $800 per truck annually. Kutschinski stresses that Republic relies on oil analyses to help establish these intervals and that different intervals might be appropriate for other companies. But he stresses that fewer oil changes means lower costs in the form of handling waste oil, not to mention the environmental benefits of saving energy that otherwise would be required to reprocess waste oil into a usable product and the hauling of the waste oil, likely by a diesel truck.

Less carbon buildup on the engine occurs in an NGV and, although a CNG engine seems to have marginally less torque than a diesel engine, the latter difference actually provides a maintenance benefit, according to Kutschinski. “Because [an NGV] is not like the traditional diesel that generates a lot of torque right from idle, you don’t get shock loading on your transmission and drivetrain and rear ends if the driver pushes the accelerator to the floor from house to house or from location to location,” he says. “It’s not going to take off as fast with so much power that you’re jerking on all of the components. So one of the upsides that becomes unexpected is that you don’t have that shock-loading damage. You’ll see that over the life of the vehicle, you didn’t have to replace the differential prematurely and you don’t have damaged u-joints or twisted driveshafts as a result of misuse.”

Shop Modifications Considerable
Developing the infrastructure for fueling and making modifications to the maintenance shop for handling CNG are not minor considerations, Svehla points out. Where Republic has added NGVs to its fleets, changes in ventilation have commonly been required, in addition to installing systems such as methane detectors and explosion-proof lighting—ostensibly due to the potential for conventional lighting ballasts to arc and act as an ignition source for a pressurized fuel source. But, Svehla stresses, local building codes dictate the details.

Beaudrie adds that refuse companies considering this conversion will probably need to consult with the local fire department. His regional operations have made the modifications at a cost of $150,000 to $175,000 per shop. Obtaining local permits to make the modifications has proved to be a time-consuming endeavor in California, Beaudrie reports: some cities have required Republic to install backup generators to operate methane detectors, and others have just required exhaust fans for methane gas. The main difference in running NGVs affecting maintenance has been the addition of safety precautions, Beaudrie adds. His staff runs the trucks out of fuel, is mindful of the presence of any static electricity, and avoids using propane torches to heat-shrink connectors. “Safety is important in anything we work on; here, we’re just a little more aware of what’s around us,” he says, being careful not to overstate any dangers inherent in using the new fuel source. “CNG is probably 100 times safer than LNG. If we have a CNG leak, it goes directly to the atmosphere; LNG wants to lie on the floor around your feet.”

In Boise, roughly half of Republic’s shop was modified for maintenance work on NGVs, says Cecil. Additions included an air makeup system, an audible alarm system for methane detection, and a lighting system at all entry doors. In the event of methane detection, the system shuts all systems down except for a fan; testing occurs monthly.

Affinity for NGVs
Miller reports that, with NGVs, the need for refueling during a shift is typically eliminated, much to the delight of Choice’s drivers. “One thing about time fill—the drivers really like it,” he says. “There’s no time waiting at the island, going to an offsite fueling station, or getting diesel fuel on their hands.” Miller adds that, at first, drivers were apprehensive about driving NGVs. But after being trained on driving them, they do not want to go back to diesels, he contends.

“We have solicited feedback from drivers, and I can tell you a couple of things,” says Kutschinski. “One is that the noise level in the cab is substantially diminished—you don’t have that low drone or guttural noise a diesel makes. You also have less vibration. It’s more automotive than it is heavy truck and so you don’t have as much vibration. The door latches stay tight. The driver himself is more comfortable.”

In the maintenance shop, “the engines that we’re running today give us very few problems,” says Beaudrie. “The drivers love them—they have just about as much horsepower and torque. Compared to the diesels trucks with the new 2007 and 2010 emissions regulations, we’re having fewer problems. They don’t have variable geometry turbo on them, we don’t have all of the emissions systems to fool with, and they’re more reliable.”

The fact that NGV engines do not include emissions-reduction equipment makes them easier to work on, adds Cecil. “You don’t have the DPFs and the urea tanks—all of the emissions equipment is basically gone,” he says. “You don’t deal with the extra-hot engine that has to run for the 2010 emissions regulations, and you don’t have to deal with the $4 a gallon for urea. Back in the 1980s, when they started putting all of the emissions equipment on car engines, you couldn’t find the engine. Look at the ’65 Ford Mustang. There’s no emissions equipment on it—the engine is wide open. You don’t have urea, all of the piping, all of the exhaust.

Page Break Line“Even the customers love them because they’re quieter. You don’t get the rattling or the smoke like you do with diesels. It’s the best decision we ever made.”

Adds Svehla: “We’re seeing customers ask for these trucks who traditionally did not. There’s not only the push to be green; it’s also reducing dependence on foreign sources of oil. The technology’s gotten better—it’s a win-win all the way around.”

Financial Impacts
Managers at Choice and Republic say that, on balance, opportunities to reap financial benefits from various areas of the operation present themselves once NGVs are acquired.

For example, Choice’s Miller points out that electricity used for overnight time fill is less expensive than that used during daytime fast filling. He adds that, although an NGV costs more than a diesel, the added cost is generally offset by a federal tax credit that comes out to about $32,000 per truck. Fuel costs are about 20% lower than diesel and Miller expect to save even more with reduced engine maintenance and greater engine life.

Republic’s Cecil says that the company saves about $1.25 per gallon equivalent by utilizing natural gas compared with diesel. Kutschinski, noting that Republic made a $1 million commitment to the necessary infrastructure for running NGVs, focuses on the payback that the conversion can provide. He knows that an NGV costs more than a diesel but says that the payback from the investment only takes a few years. “In the past, if you were trying to go green or be environmentally conscious, it was going to cost you more,” he says. “Now, the reality is that the technology has gotten to the point where it costs you less to operate and the competitive advantage, if you will, goes away when everybody jumps on the bandwagon.”

According to Beaudrie, there was about a $35,000 difference between a natural gas and diesel engine three or four years ago. However, manufacturers have added so much cost to diesels with the 2010 emissions regulations that the spread is more like $10,000. And, “today, we’re saving about $1,000 a month in fuel costs per truck over a diesel, so that’s a nice payback.”

Beaudrie concludes that the greater the number of NGVs, the shorter the payback period. “We’ve taken the approach that we need a minimum of 20 trucks at a location for it to make sense,” he says. “A fueling station is going to run you anywhere from $700,000 to $1.2 million, and a new billing system will be another $175,000 to $200,000.”

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