Save on Fuel Costs, Gas Up Business with CNG

Cliff Woolard, president of 24-year-old Home Med-Equip Co., Concord, Calif., says he is feeling a bit like the cat that ate the canary.

With May gas prices sitting at $2.55 to $2.65 a gallon in the state, the long-time provider is paying only $1.45 to $1.50 for fuel — and “prices actually went down last month,” he says. What’s his secret? Last year, Woolard converted the company’s delivery fleet to vans that run off compressed natural gas.

“CNG is the cleanest-burning fuel available,” Woolard explains. “It is easy on the environment; it causes less pollution than any other fuel. It is also easy on the engine; it burns cooler and much cleaner than gasoline. You can go twice as far on an oil change, and the oil will still look like new. Spark plugs and engine components develop much less carbon buildup, and the engine will usually last twice as long running on CNG.”

And the best part, says Woolard, is that “since the conversion we are saving $800 to $1,000 a month on fuel costs just with our delivery fleet.”

With two branches in San Francisco’s Bay Area and the Central Valley, Woolard’s JCAHO-accredited company is a traditional HME earning half of its income from respiratory business and the other half from DME. His clients include 600 respiratory patients, with the majority on oxygen therapy. On a peak day, the company can make from 50 to 70 deliveries.

So when it was time to replace the box trucks in his fleet, which ran on diesel fuel, Woolard began looking around for vans that would be more efficient. He started investigating CNG vehicles after talking with a local dealer, and ended up buying eight 2004 Ford Econoline CNG vans. “You wouldn’t know it’s a different vehicle,” he says, “and when I looked at the fuel savings, I was sold.”

In California, the price of the alternate fuel hasn’t fluctuated much over the last three years, Woolard notes, ranging from a fairly consistent $1.20 to $1.50 a gallon. “I figure that our savings from regular gas to CNG is, on average, about 44 percent,” he says, adding that when the company phases out its one remaining diesel truck this summer, “at that point we will probably be saving by half.”

The range on the vans is from 160 to 180 miles on a tank of CNG, and drivers fill up at Pacific Gas and Electric, the local utility, which is open to the public with 10 fueling stations in the area. A small city near one of the company’s branches maintains its own CNG station, so Woolard also got permission to fuel fleet cars there. Thus far, he says, the lack of CNG outlets is the only drawback to using the fuel. But for fleets that stay local and get refueled from a central location day after day, the CNG option is a solid one.

Although Ford and General Motors have said they will no longer produce CNG vans themselves, Woolard says van conversion is relatively inexpensive with numerous sources that can upfit standard vans. And, he advises, “There is a big secondary market out there for these vehicles. There are Web sites and clearinghouses for used CNG vehicles, and they typically have low mileage because they are not cross-country vehicles; they are used in local government operations by cities and airports.

“You can pick up a decent vehicle for a pretty good price.”

To further control costs, Woolard has added GPS (global positioning) for more efficient routing, has a dedicated dispatcher and is looking at changing the company’s sales vehicles to CNG. He has already purchased one bi-fuel vehicle, a Chevrolet Cavalier, which runs on both CNG and regular gasoline. Once the car has used up its CNG reserve, it switches to gas.

“Transportation is a huge part of our business, and since we’re expected to provide delivery for free as an industry, we really need to look at keeping costs down in this area,” he says. “In going to CNG vehicles, we have been able to cut costs without cutting people.”

And there are other pluses. In California, for instance, clean-air vehicles can drive in the carpool lane with a single occupant. “That’s a huge factor, because in the Bay Area we have multiple heavy-traffic areas where there is congestion. Being able to whiz by stalled traffic gives you a leg up,” Woolard explains, by cutting travel time from one delivery to another and saving on the fuel that would be wasted while drivers are sitting in a traffic jam.

Depending on location, Woolard says companies may also be eligible for grants for converting to the cleaner-burning fuel from federal, state or local governments under environmental or clean-air initiatives. What’s more, he says, “We’re going to our referral sources and telling our story, that as an oxygen provider we are committed to being good corporate citizens by having clean-air vehicles, and people understand our message.

“It may be a small point, but it’s the small ones that get people’s attention, because for the most part, [providers] all have the same equipment.”