Running on natural gas

Nebraska's first compressed natural gas filling station opened to the public Friday, a step in making the alternative fuel available to metro-area consumers and establishing Interstate 80 as a route for automobiles powered by natural gas.

Two additional stations are scheduled to open in the coming months, one in Lincoln that will be operated by the Lincoln Airport Authority and a second station that will be run by Metropolitan Utilities District. MUD oversees the filling terminal opened Friday at I-80 Fuel at 5318 L St. in Omaha.

But for now, Omaha is the only city between Denver and Chicago with public CNG stations, MUD President Doug Clark said Friday.

The fuel is touted as cleaner, “more American” because much of it is produced in the United States and affordable with a $1.93-per-gallon of gas equivalent (GGE) price tag, compared with the Nebraska average of $3.69 per gallon for ethanol-blend gasoline.

But compressed natural gas, or CNG, hasn't yet caught on with consumers and isn't expected to until years down the road, an automotive industry analyst said. However, businesses and cities are slowly jumping on the CNG bandwagon by retrofitting their vehicles or purchasing more expensive CNG-powered buses, trucks or utility vehicles that promise long-term fuel savings.

In Omaha, MUD has built a fleet of 80 vehicles that run on natural gas. Omaha Metro has eight CNG-powered city buses. And Happy Cab, which owned by Mark and Lori Mitchell, has converted 50 of its taxicabs to operate on CNG. The Mitchells also own I-80 Fuel and a neighboring car dealership that will retrofit current gasoline vehicles to run on CNG for about $10,000 each.

MUD's Clark said each CNG taxicab will save the Mitchells about $210 per week that they would otherwise spend on gasoline. Plus, since the couple own I-80 Fuel, they will pay less for the fuel as well, Clark said.

Having Happy Cab make the switch to CNG on some of its vehicles will help consumers save, too, Mark Mitchell said. In most taxis, customers are required to pay a fuel surcharge. Those fees are being scrapped in the CNG taxis, he said.

Clark said the next step for CNG in Nebraska will be for more businesses to purchase fleets of CNG vehicles. And not just small vehicles. Garbage, delivery, cement and utility trucks that run on CNG, he said, would save the most money because they use the most fuel.

“You have to have enough consumption to justify it,” Clark said.

Slowly, consumers will catch on, too.

“You're going to see exponential growth of CNG across the United States as gas prices rise,” said Jesse Toprak, an analyst for “The long-term tendency is for gas to keep going up, and if that happens, natural gas is going to emerge as a viable alternative. It's just a matter of educating the U.S. consumer that this is a cheaper, cleaner technology to use.”

In Europe, South America and Asia, there are safety concerns about the placement of the CNG tanks near the rear of automobiles, exposing them to damage when a car is rear-ended, Toprak said. Some countries don't allow CNG cars to park in public lots or parking structures, for fear of explosions.

But Toprak said the Midlands, with its rural communities, might be more receptive to CNG as an alternative fuel than electricity. That's because CNG, he said, is more efficient and a car doesn't need to be refilled as often as gasoline-powered automobiles. CNG is also more efficient in cities where drivers endure a lot of stop-and-go traffic.

Barbara Ihle, an Omaha small-business owner, is already on board.

She and her husband, Chris, purchased a Honda Civic GX, the only CNG car available to consumers, in April 2009. The premium the Ihles paid for the car, which cost about $28,000 — more than a gas-powered Civic — will be fully recouped in 30 months.

Chris, who makes a daily commute to Fremont, Neb., for work, is now the primary driver of the vehicle. And since about half of the miles driven in the car are classified as business travel, the Ihles are able to write off those miles on their taxes.

Barbara, who also has a CNG filling station at her home, said that with maintenance, insurance, fuel costs and other items, her Civic GX costs about 48 cents per mile to operate. Last year, the Internal Revenue Service offered a 51 cent-per mile rebate to owners of CNG vehicles using their cars for business.

That means that for about 50 percent of the miles the Ihles travel in their CNG Civic, they're making a profit.

“I'm the trailblazer,” Barbara Ihle said Friday at the unveiling of I-80 Fuel.

The event was attended by U.S. Sen. Ben Nelson, D-Neb., local and state politicians and officials from MUD and other Nebraska and regional utilities that support the alternative fuel.

The three Nebraska filling stations are being funded with grants from the U.S. Energy Department through the American Recovery and Reinvestment Act. The Nebraska Environmental Trust Fund paid about $2.2 million for the two Omaha stations, and MUD also received a low-interest loan from the Nebraska Energy Office.

Subsidies and tax credits for individuals and businesses are offered in many states, including in Iowa and Nebraska, but Toprak said that unless the federal government offers similar financial benefits, higher prices will keep people from buying into CNG technology.

“You'll see an expansion of that as time goes by,” Nelson said of consumers and businesses buying up CNG vehicles. “We're in the process of pushing forward because you have to have the user vehicles but also the facility to pump the compressed natural gas.”

Nelson said he's confident that the federal government will get involved and pass financial incentives for consumers once momentum picks up for CNG.

“I'm hopeful that we can do that,” he said. “Because this is the sort of thing that the government is in a position to help with by getting the industry up and running, then stepping back and allowing the industry do what it does best, innovate and grow.”

Toprak, the auto industry analyst, predicted that over the next five years, about 3 percent of the total automobile market could become powered by CNG.

That means that by 2016, Nebraska, which has about 2.2 million registered vehicles at the end of 2010, would have at least 66,000 CNG vehicles traversing its roads, and that's without figuring in population growth and an expected increase in the number of total vehicles.

Clark said he envisions more CNG stations sprouting up throughout the Midlands in the not-too-distant future.

“What really needs to transpire now is for us to link I-80 and Omaha to the coasts,” he said. “The goal would be to get a CNG station in Des Moines, Iowa City, Kearney and North Platte. And then you'll be able to drive I-80 from coast to coast on compressed natural gas without any worries.”




This article was first published by Omaha World-Herald.

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