Alternative fuels may be more environmentally friendly, but the jury is out on whether they’re good for the bottom line.
Switching to diesel fuel for production trucks and propane for riding and stand-on mowers makes sense, financially and environmentally, to Bob Grover, president of Pacific Landscape Management, a 150-employee commercial maintenance company in Hillsboro, Ore.
As fuel prices go up, Grover says the company has lowered its costs by converting to propane and diesel. Propane in particular offers reduced greenhouse gas emissions compared to conventional fuels. “So that’s a cool thing that we’re doing the right thing environmentally in a way that’s saving us and our customers money long-term,” Grover says.
Although plenty of other companies see the value in using alternative fuels, making the switch takes time – and it doesn’t always involve every vehicle and piece of equipment the company owns. For example, Bay Country Landscape in Elkton, Md., is using propane for mowers for its 40 employees. Other companies, like DLC Resources in Phoenix, rely on hybrid vehicles for field managers.But lack of infrastructure and technology is impeding the company’s ability to make the switch to alternative fuel sources for other vehicles and equipment.
“If you’re into the green movement, have clients who care about the environment or want to diversify your business, switching to alternative fuels can be a benefit,” says William Bathon, vice president of Bay Country Landscape. But regardless of your motivations for trying alternative fuels, doing so has to make financial sense.
Incentives to switch.
When it comes to diesel, Grover says prices are more variable than unleaded. “And you have to use an additive, which increases cost. But the miles per gallon savings more than cover the added expense,” he says.
Grover acknowledges that biodiesel would be an even more environmentally friendly option than standard diesel. All diesel in Oregon is 5 percent biodiesel; however, getting a higher percentage requires companies to own their own fuel tanks – a cost Pacific Landscape Management cannot yet justify.
The propane used for mowers also requires more complicated fueling that is best performed with an onsite propane fueling station. That can be pricey. The company is leasing its mowing equipment from John Deere, which proposed the mower conversion and introduced Pacific Landscape Management to propane suppliers and incentives to offset the costs of an onsite fueling station.
That’s why Grover recommends talking to local distributors and attending trade shows to get the scoop on alternative fuel options. “There are a lot of resources out there you won’t have access to unless you ask for them,” he says.
Right now, the company’s entire fleet of about 40 riding mowers is fueled by propane. About a third of Pacific Landscape Management’s 50 production trucks are diesel, too. “We keep trucks for 10 years, so it takes a long time to convert,” Grover says.
Of course, he acknowledges that at the company’s truck conversion rate, a new technology may present itself before they even purchase an all-diesel fleet. “Maybe we’ll get to the point where hybrids become an economically viable option,” Grover says. “We just keep our ear to the ground and see what’s best for now. If best changes, we’ll re-aim our ship as new technology comes down.”
Before Bay Country Landscape took the plunge and purchased nine new propane mowers, the company did a lot of research. “Propane has a lot of myths about it,” Bathon says.
After considering the switch for a year, Bay Country Landscape purchased propane mowers for one crew. “We immediately saw the benefit,” Bathon says. The propane mowers cost about an additional $1,500 up front per walk-behind mower and $2,000 more up front per riding mower. “But we can recoup that initial cost within one year of use.”
Bay Country Landscape is working with its propane provider to install a fuel tank on site. Bathon stresses the importance of developing a relationship with a good fuel service provider before making the switch. “You can’t just go down the street and fill up your propane tanks,” he explains. “It can be very costly, and our propane provider is sharing the costs associated with installing the fuel tank for us.”
In the future, Bathon says, Bay Country Landscape may look into alternative fuel options for management vehicles, too, but not in the next two or three years.
Not quite ready.
DLC Resources and its 300 employees currently use diesel fuel for service vehicles and equipment. Although the company has looked at natural gas for road-going vehicles, as well as propane and electric options for mowers and other equipment, as of now none of those options are quite right for the company.
“Certainly sustainability is a big part of our mission, so we looked for ways that make economic sense. Our difficulty is we have a unique business model, market and city, and the durability and availability aren't quite there for us yet,” says Vice President John Holbert.
DLC Resources focuses specifically on large planned communities on the perimeter of the massive Phoenix metropolitan area. “We have a very limited client base,” Holbert says. “By geographic happenstance, they’re spread all over. We probably have 100 miles between the westernmost and easternmost properties.”
That means electric service vehicles don’t have the range DLC Resources needs. In addition, Holbert says lack of infrastructure is a huge barrier to purchasing vehicles that run on natural gas. “We mobilize from two maintenance yards, do all fueling on site, and use the same routes every day. The infrastructure for natural gas is not available on our routes yet.”
Holbert says some companies in the Phoenix area, such as UPS, are running natural gas pipelines to their facilities. But DLC Resources doesn’t have a large enough fleet for natural gas vendors to justify the expense.
For now, the company is sticking with conventional fuel sources for small equipment, too.
In lieu of using alternative fuels for trucks, Holbert says DLC Resources focuses on a robust maintenance plan to maximize fuel efficiency, with simple steps such as ensuring tires are properly inflated and mobilizing employees from a central yard. The company also purchased some hybrid vehicles for field managers who don’t have to haul around equipment and supplies.
With a few technology and infrastructure tweaks, Holbert says his company would certainly consider natural gas and electric options in the future. “There’s always a cost-benefit analysis to be done,” Holbert says. “But on a speculative basis, of the current alternative fuels available, I would say natural gas is probably the more attractive based on the cost of fuel.”
The author is a freelance writer based in Lincoln, Ill.
Be sure to read the stories from our September issue on fuel management by visiting bit.ly/fueldistance and bit.ly/fuelunforgive