Longview firm plans natural gas fueling sites
By Mike Elswick email@example.com
July 4, 2012 at 10 p.m.
A group of Longview-area entrepreneurs is working to make natural gas fueling - a lower-cost and cleaner alternative to gasoline and diesel - a reality for local motorists.
Independence Fuel Systems, an upstart Longview-based company, is ready to ante up a sizable investment to have its first compressed natural gas fueling station in operation by the fall. Within a matter of months, the company plans to have three strategically located fueling stations in Gregg County, said Charles Neuberger, the company's president.
"Our initial target market is going to be fleet business," he said. "We feel that as more fueling stations are built, we'll see more buy-in by consumers."
The company has executed agreements for setting up compressed natural gas (CNG) fueling stations at three existing Longview-area locations: the Texas Best Travel Plaza on Eastman Road near the Interstate 20 exit; the Bar-K-Ranch Store on U.S. 259 North; and the Gateway Travel Plaza at I-20 and Texas 42.
"We have long-term agreements with the owners at all three," said Kevin Russell, Independence Fuel Systems CEO. "We anticipate having the equipment in place for the first one in October with the other two to follow in November."
The first location Independence aims to open is the Eastman Road site of Texas Best Smokehouse, he said. The company also has locations in mind for future locations.
They don't come cheap. Neuberger said the estimated cost of installing each fueling station is about $1 million.
That includes pumps that will look similar to traditional gasoline pumps, with credit card readers and a compressor that will be nearby taking natural gas from an existing pipeline and converting it to the usable CNG to fuel vehicles.
"It's all going to look very familiar to the consumer," he said.
Apart from the fuel being dispensed, the main difference with familiar fueling setups are nozzles that lock into place for high-speed dispensing of CNG.
Even with ups and downs of markets for oil and natural gas, Neuberger said natural gas will retain a competitive edge.
On a comparative basis, Russell said, the price-per-gallon equivalent of natural gas to gasoline offers about 40 percent savings.
That means big users are likely to be interested in converting their fleets to reap savings.
"We've talked to a number of fleet operators, like beverage distributorships," Russell said. The company's partners are confident enough in the potential business to move forward with the installations. As the systems become more common, they said, individual drivers also are more likely to begin converting to use CNG.
"All the big car and truck makers have models either in production or planned," Russell said.
Brian Hatchett, vice president of Roberts-Hatchett Properties, which operates the two travel plaza locations adjacent to I-20 where Independence Fuel Systems has agreements to operate CNG stations, said consumers have an interest in fueling their vehicles with natural gas.
"There is a lot of talk about moving in this direction," Hatchett said. "We see it as an opportunity to attract new customers to our operations that we didn't have before - this is new business for us."
In addition to the initial installations, Roberts-Hatchett Properties has agreements with Independence Fuel for a total of five CNG operations.
Longview Mayor Jay Dean said the Independence Fuel Systems venture was positive news for East Texas energy producers and fleet operators such as the city.
"Having a reliable source of CNG close can make a difference for us in starting to look at converting," he said. "And it's always good to have private investment used for something like this rather than tax money."
Even if the price of natural gas goes up considerably, Dean said it would remain a viable option compared to gasoline and diesel.
"The cost of refining gas and diesel just continues to escalate with more stringent EPA rules," he said.
While it is too early to say if and when entities with dozens of vehicles might start making the plunge for the extra up-front cost of conversion, handy and reliable sources of CNG will go a long ways toward that end, he said.
"There are several key elements that need to be in place to make this work - you need to convert vehicles and you need to have availability and convenience to being able to fuel up," Dean said. "That infrastructure needs to be in place."
The city already is looking for grant funding that might help speed up the conversion process and make it more feasible.
Gregg County Judge Bill Stoudt also lauded the private enterprise effort to make CNG fueling available locally. But he said the cost of converting existing cars and trucks in the county's fleet to burn on CNG - an estimated $7,500 to $10,000 per vehicle - is cost prohibitive.
What is probably more realistic for the county, he said, is slowly moving into replacing cars and trucks with CNG vehicles.
"Conversion for us would cost hundreds of thousands of dollars," Stoudt said. "With the technology moving so fast we want to move cautiously and not jump into anything too fast."
Stoudt said the fact investors with Independence Fuel Systems are planning to initially locate three CNG fueling stations in strategic locations in the county makes sense.
"That provides us with a good segue into looking at replacing our cars and trucks," he said. "And I'm very excited for this entrepreneurial effort."
The city and Gregg County together have fleets totaling about 750 vehicles. Dean said about 400 of those could be candidates for conversion or replacement to natural gas - over time.
Neuberger said another local benefit is a Gregg County firm, JW Operating, is producing the compressor units that will be used at the fueling stations.
"JW has the experience and the workforce to do them right," Neuberger said.
Rick Poorman, a manager of applications for JW Operating, which is near East Texas Regional Airport, said the company is receiving more inquiries from potential CNG dispensing locations nationwide.
"We're excited about what we're seeing," he said. "We anticipate this will become a big part of our business in coming years."
Dean, Stoudt and representatives of the Longview Chamber of Commerce recently visited Mansfield, La., to see how the conversion to CNG works. Among the lessons, Dean said, is that Texas lags behind other states in moving toward the use of CNG.
"Texas has not been as aggressive in promoting the use of CNG as Louisiana has with incentives," he said. "But moving toward using CNG for fleets is something we expect officials to continue to review for feasibility in the future."