Building a business plan for NatGas vehicles

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Mark Huff, president of Tulsa, Oklahoma-based Tri-Star Construction, started his business in 2003 with just four employees working out of the back of two old pickup trucks.

Today, he sits atop a $12 million construction empire with a workforce of more than 75 employees, and a dozen super duty work trucks, seven of which have been converted to compressed natural gas (CNG). 

Over the years, as his business grew, Huff did what every good company leader does – invest in new technology with hopes of running a more efficient business. Among his investments were Westport WING power systems for his fleet of Ford F-250s. 

Before switching to natural gas, Huff says he spent nearly six months crunching the numbers and assessing if natural gas was the right option for his fleet.

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Huff also contacted his local Clean Cities organization and attended natural gas summits in order to educate himself about the benefits and drawbacks.

“It didn’t take us long to decide that (CNG) was the path we needed to be going down,” Huff says, calling his decision to switch a “no brainer.”

“I can’t figure out why everybody is not all over this,” he says. “The savings are there. The cost of gasoline is not going to go down.”

An Oklahoma tax credit covered 50 percent of the cost of the equipment and Oklahoma Natural Gas came with an additional credit.

“That right there was enough to pay for approximately 65 percent of the system,” Huff says. 

After collecting data, Huff devised a spreadsheet looking at how many miles his superintendents and foremen were driving, and what a conversion could do for his bottom line. 

“We looked at how much gas they were using at $3.79 per gallon, and what it could be if we were at 99 cents to $1.49 with CNG,” he says. “My guys are driving up to 45,000 miles a year. We could save enough over gasoline to nearly make the payment on these trucks.”

Huff says he took advantage of additional tax incentives by installing a CNG pump on site, further driving down costs. 

“We get fuel out of that pump for approximately 78 cents per gallon,” he says. “Plus, there is an additional 50 cent per gallon equivalent federal rebate. Out of our pump, it is possible we’ll be paying 28 cents per gallon equivalent.”

Those savings have already begun to add up.

“On average, we’re saving between $600 to $750 (per truck) a month versus on gasoline,” he says. 

Huff says, in less than a year, converting has saved his business nearly 40 percent in fuel costs, and that he’s not experienced any maintenance related issued with the CNG-powered units.

“We haven’t changed anything in our shop,” he says, “and I believe our WestportWING CNG trucks will last longer than our other trucks.”

There has also been residual maintenance benefits. 

“We’ve been draining the oil at 3,000 miles and it looks brand new,” he says. “I’ve seen the oil at 5,000 miles and it looks brand new. They run so clean that I’d be confident saying they could go 7,000 miles between oil changes. It’s another perk.”

Primarily used to haul equipment to job sites, Huff says horsepower is comparable to what he experiences with gasoline 250s.

“Some of my superintendents say they actually haul better (than gasoline trucks),” he says, noting that his and their opinions on power is subjective. “If there is any difference, it’s not enough to make me mad.”

Huff says there was approximately a six week wait on the order for the first two CNG powered units, but says the wait was comparable to other custom spec’d trucks.

“If you sit down with any dealer and build your own Ford truck, that (wait time) is pretty common,” he says. “The length of time to get the trucks was not that much different than a normal gas engine.”

The trucks’ impact on the job site was immediately noticeable, and Huff says shortly after the first two arrived, he ordered two more. Those trucks were already on the dealership lot. 

Among Huff’s concerns in making the switch to CNG was training employees in dispensing the fuel. 

“It was a very simple process,” he says. “In 10 minutes, anyone can learn how to dispense CNG.”

Huff estimates the CNG trucks have a payback of approximately 13 months based on 40,000 miles at 12-13 miles per gallon.

“If we look at $9,000 to $10,000 in additional costs, the savings over gasoline, and not taking into account tax credits and rebates, it’s about 13 months,” he says. “Once you throw incentives in, it’s not that long.”

Without incentives, you can still make the numbers work, says Huff, adding he generally keeps trucks for four-plus years before trading them in. 

“If it only takes 13 months to pay back the cost of the equipment, we still run them for 2 and a half to 3 more years,” he says. 

Huff says given the current price of gas and its cost trends, its unlikely that gasoline would ever be more economical than CNG.

“It would nearly be impossible,” he says, noting he has a preference for CNG because it comes from U.S. sources. “Even if they were the same price, I would still rather be on CNG.”

With 10 months on the road, Huff says he’s not seen a downside in making the switch.

“Absolutely none,” Huff, a self described pessimist, says. “I’m always wondering when the ball will drop, but that has not happened.”

A minor draw back was the loss of two feet of bed space to the CNG tanks, but Huff says that loss was mitigated by on-site tool storage space.

“I don’t necessarily want all their tools in the back of their truck anyway,” he says. 

For those looking to incorporate natural gas into their operation, Huff advises following a path similar to his; consult with a local Clean Cities organization, investigate any and all tax incentives, attend seminars or educational workshops, do the math on cost differentials and speak with fleets who currently run CNG trucks.

“Everybody who’s made the change is positive,” he says.