Soaring fuel prices bode well for RFTA bus changes
ASPEN – The skyrocketing price of fuel is making the Roaring Fork Transportation Authority’s interest in buying buses that run on compressed natural gas look like a winning proposition.
RFTA must decide by the end of March whether to buy 22 buses that will run on standard clean diesel fuel or compressed natural gas. Four buses are needed to replace older models in its fleet. The other 18 vehicles are needed for the bus system’s expansion.
As anyone who goes to the pumps knows, in recent weeks gas prices have soared to new highs for this time of the year. Regular unleaded gas could top $5 per gallon this summer. Diesel fuel is currently running at about $4 per gallon at the pump though RFTA pays less for bulk. Nevertheless, the bus agency is getting hit in the wallet as well by the rising prices. RFTA CEO Dan Blankenship said the agency anticipates paying about $3.58 per gallon for diesel come May.
Meanwhile, the Wall Street Journal reported Friday that natural gas prices have hit a 10-year low. Mild winter weather across the country didn’t create as much demand for natural gas as expected, so the supply is high.
In January, Blankenship prepared a memo for the board of directors showing that even when capital costs of using compressed natural gas are factored in, RFTA will still save about $330,000 annually on fuel costs by using compressed natural gas for 22 buses.
To make the switch, RFTA will pay more for buses with engines that operate on compressed natural gas. It also must install a compressed natural gas fueling system and make safety modifications at its shops. All told, expenses are estimated at $5.5 million to $6.5 million, Blankenship said.
However, the price difference between compressed natural gas and diesel fuel is wide enough that compressed natural gas still makes economic sense. And that gap is widening in favor of compressed natural gas.
“As the diesel fuel prices increase, the savings is going to be greater,” Blankenship said.
The volatility of diesel fuel prices also hurts the agency. When the price spikes, it costs more than RFTA budgeted for fuel. The buses currently consume about 680,000 gallons per year. An increase of 50 cents per gallon boosts RFTA’s expenses by $340,000.
RFTA’s fuel consumption will increase significantly after September 2013 when it expands its fleet and offers more direct routes throughout the Roaring Fork Valley.
Even if the 22 new buses are fitted to run on compressed natural gas, RFTA will use standard diesel fuel for years to come. A significant number of buses aren’t due to be replaced until between 2020 and 2024, according to Blankenship.
Compressed natural gas is often touted as better for the environment based on tailpipe emissions. However, a spokeswoman for the National Renewable Energy Laboratory in Golden said a definitive study comparing emissions for the most recent technologies of both engines doesn’t exist.
“Most studies out there are from older-technology engines, both diesel and CNG,” said Heather Lammers, of the energy lab. “So while modern CNG and diesel engines are really both clean from a tailpipe-out standpoint, it isn’t obviously clear which is the cleaner of the clean. Folks are working on answering that, but nothing is out yet.”
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