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Ford’s growing CNG, propane capable lineup

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Passed as part of an extension of federal highway funding, Congressional legislation now corrects a longstanding inequity in the way liquefied natural gas (LNG) is taxed. Starting Jan. 1, 2016, LNG will be taxed based on a diesel gallon equivalent (DGE) unit.

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Currently, fleets operating LNG-powered trucks are effectively paying a tax on that fuel that is about 70% higher than the tax on diesel. The change modifies the highway excise tax on LNG to be based on energy content, rather than volume, and brings the tax on LNG into parity with that of diesel.

To illustrate the significance of that change, consider that a natural gas truck traveling 100,000 miles per year at five miles per DGE consumes 20,000 DGE per year, notes NGVAmerica, an organization that promotes the use of natural gas as a transportation fuel.

Prior to the passage of the new law, the LNG truck would have a highway fuel tax bill of $8,262. With this change, the LNG truck will now pay $4,860 in highway fuel taxes, a savings of $3,402 per year.

“Passage of this legislation is great news for trucking fleets looking to clean-burning LNG to power their transportation needs,” said Matthew Godlewski, NGVAmerica’s president. “This change will mean even greater savings on their fuel costs, and it provides a powerful new economic incentive for those fleets considering the switch to this domestic fuel.”

Fostering use of natural gas fuels is also good news for manufacturers like Ford Motor Co., which recently announced that its 2016 F-150 light-duty pickup model with a five-liter V8 engine will be offered with a gaseous-fuel prep option, making it capable of running on compressed natural gas or propane. With the addition of the F-150, Ford will offer eight vehicle groups with the capability to run on CNG or propane, which are:

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• 2016 F-150;
• F-250 and F-350 Super Duty pickup;
• F-450 and F-550 Super Duty chassis cab;
• F-650 and F-750 chassis cab;
• F-53 and F-59 stripped chassis;
• Transit Connect van and wagon;
• Transit van, wagon, cutaway and chassis cab; and
• E-Series cutaway and stripped chassis.

Ford estimates as much as 70% of its vehicles purchased with CNG/propane packages are upfit before customers take delivery and another 20% are upfit within a year of purchase. Six Ford Qualified Vehicle Modifiers convert CNG/propane-prepped engines to run on natural gas or propane at 36 locations across the United States.

One of those companies, Westport Innovations also recently announced it will offer dedicated, liquid propane systems for 2016 Ford F-150 trucks. The new liquid propane system will be offered in addition to Westport’s compressed natural gas package for the 2016 Ford F-150. Both alternative fuel system options, part of the Westport WiNG Power System, are expected to be certified to EPA and CARB standards.

“We understand that many fleets use different types of alternative fuels based on availability and business needs,” said Paul Shaffer, vice president and managing director of Westport’s Dallas operations. “By offering dedicated liquid propane in addition to bi-fuel and dedicated CNG vehicles, we are evolving to a full-service alternative fuel provider for fleets operating the popular Ford F-150 pickup truck.”

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“CNG generates the highest return on investment for vehicles with lots of miles driven annually and lower fuel efficiency,” said Dick Cupka, Ford commercial vehicle sustainability leader. “The payback period is even shorter when the price gap widens between CNG and gasoline or diesel.

“The growth in interest for CNG/propane-prepped vehicles shows a shift in fleet customers’ mindsets,” Cupka added. “They are becoming more forward-thinking about alternative fuels, taking into account their total cost of ownership and looking for ways to reduce their vehicle emissions.”

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