In 2009, Dallas Area Rapid Transit (DART) began a fuel-transition program to replace its transit bus fleet with compressed natural gas (CNG)–fueled buses and to construct the necessary refueling infrastructure by 2012.
Even though DART faced considerable up-front capital costs to build a fueling station and upgrade the existing gas pipeline, the low cost of the natural gas made the conversion cost effective. Today, DART has two on-site CNG refueling stations and has converted 81 percent of its fleet to CNG. Partially in response to this — and the fact that Texas has one of the most abundant supplies of natural gas in the world — Houston METRO and Capital Metro in Austin asked the Texas A&M Transportation Institute (TTI) to take a look at the value and feasibility of converting their bus fleets to CNG.
TTI Associate Research Scientist John Overman and Assistant Research Scientist Lauren Cochran have worked with transit agencies to examine the state of the practice in alternative fuels for transit, perform life-cycle cost (LCC) analyses comparing fleet purchase scenarios, and assess the financial risks involved in converting to a CNG fleet.
“Our sponsors are most interested in knowing when it would be economically beneficial to convert to CNG, and how specifically to go about that process,” says Overman, who’s been working with Texas transit agencies for 20 years.
Since modern CNG vehicles are similar to diesel in operations, emissions and reliability, determining whether conversion is worth the initial investment can be a challenge. According to Cochran, a national expert in alternative fuels for transit vehicles, “We know that the price and supply of natural gas are relatively stable compared to gasoline and diesel, and the vehicle technology is no longer considered a gamble. This is attractive to transit agencies who manage very large fuel budgets.”
Researchers are able to adjust 28 variables in the LCC model to account for changes in fuel price, fuel taxes and incentives to produce current financial assessments.
“The return on investment is largely dependent on fleet size. The economy of scale has to be there for CNG to be a competitive fuel over diesel,” says Cochran. For the 100-bus-fleet, 12-year LCC model output, run with and without a tax credit for CNG, the savings ranged from $8 to $23 million, even factoring in the cost of building a $1 million refueling station — something that may not be required for some agencies. “For a smaller fleet, converting to CNG may not be the most economical option,” Cochran adds.