Propane

• Natural gas has the highest energy to carbon ratio (4:1) of any fossil fuel and thus produces less carbon dioxide per unit of energy than any other fossil fuel.
• Natural gas is compressed to 3,600 psi to become CNG, which is stored inside high pressure cylinders onboard natural gas vehicles (NGV).
• One gasoline gallon equivalent (GGE) is the amount of alternative fuel it takes to equal the energy content of one liquid gallon of gasoline.
• One GGE of CNG contains 114,898 Btu’s.
• One GGE of CNG will power a vehicle the same number of miles as one gallon of gasoline.

• • Propane has 3 carbon atoms per molecule (3:1), propane is a cleaner burning fossil fuel than gasoline or diesel but not as clean as CNG.
• Propane is compressed to 120 psi and stored as a liquid inside steel tanks onboard LPG vehicles.
• One gallon of propane contains about 28% less energy than one gallon of gasoline or one GGE of CNG.
• One gallon of propane contains about 83,500 Btu’s.
• One gallon of propane will power a vehicle about 28% fewer miles than one gallon of gasoline.

• Natural gas is lighter than air with a specific gravity of 0.5537.
• When present in the environment, natural gas will dissipate into the atmosphere quickly, minimizing fire potential.
• Very narrow flammability range: 5% to 15%
• Auto-ignition temperature: 1,004°F

• Propane is heavier than air with a specific gravity of 1.5219.
• When present in the environment, propane does not puddle in liquid form but will pool near the ground similar to gasoline vapors.
• Very narrow flammability range: 2% to 9.5%
• Auto-ignition temperature: 850°F to 950°F

• Stations require greater initial investment of $500K–$750K to build a standard fast-fill station.
• Investment partners are often willing to develop private/public stations when fleet demand exists.
• CNG offers a second option, called time-fill. Time-fill stations provide concurrent fueling of multiple vehicles (up to 100’s) at a slower rate per vehicle.

Example: A station can fill one truck at 8 GGE/minute on fast-fill or 100 trucks at 480 GGE/hour on time-fill.  If a fleet’s vehicles sit in a parking lot overnight, every night, this is the most cost and time effective method of fueling. Time-fill stations are considerably less expensive than fast-fill stations, which reduces costs and increases convenience where applicable.

• Fueling facilities are less expensive to install than CNG stations—about $45k–$175k to build an LPG filling station. A very simple dispensing system can be as low as $25K.
• Propane suppliers will often install private stations when fleet demand exists.

• OEM options from General Motors & Fiat Chrysler Automobiles.Ford, in addition to GM & Chrysler, offer a multitude of conversion/upfit products.
• Conversions available across multiple platforms for the end user to find the best vehicle options. For a complete listing, click here.
• Incremental costs range from ~$7k–$15k per vehicle.

Heavy Duty Vehicles:

• Multiple options exist across many platforms, including transit buses, waste management, and Class 8 over-the-road tractors. Examples of a variety of OEM heavy duty vehicles is available here.

• No LDV OEM options exist through GM, Ford or Chrysler — only aftermarket options.
• One Class 4 available (Collins Nex Bus – Express/school bus)
• Conversions available on several platforms. Less vehicle choices when compared to NGVs. A complete listing can be found here.
• Incremental costs range from ~$5k–$12k per vehicle.

Heavy Duty Vehicles:

• None

• National average price: $2.09/GGE.
• National average retail price: $2.18/GGE.
• National average private price: $1.78/GGE
• Natural gas pricing decoupled from oil pricing in 2008 and therefore fluctuations are minimal.
• Seasonal price fluctuations are non-existent, due to gas utility buying patterns. Gas utility profits are regulated.

• National average price: $3.97/GGE.
• National average retail price: $4.08/GGE
• National average private price: $2.786/GGE
• Prices fluctuate similar to gasoline and diesel.
• Prices prone to seasonal fluctuation, due to large home heating demand in colder months (Compare propane prices above to last January’s (2014) pricing as an example.)

• Up to $.75 billion currently being invested in creating U.S. natural gas fueling stations and fueling corridors: Since 2009, the amount of CNG fueling infrastructure has grown by 111%; Since mid-2010, the number of planned CNG fueling stations – currently 158 –  has grown 445%.
• There are 1,626 CNG and 122 LNG stations nationwide, about 56% (CNG) are open to the public.
• Natural gas is a consistent fuel provided by local, regulated utilities nationwide.

• Investment in U.S. propane fueling infrastructure pales in comparison to natural gas.
• • 1,545 primary fueling locations nationwide with an additional 3 on record as planned to be built.
• HD5 propane is required for vehicular use; cannot use “barbecue grade” propane.
• HD10 propane could void engine warranty and damage fuel systems.

• Natural gas is currently estimated to have over 115 years of stable supply.
• Reserves of natural gas are estimated to keep prices stable through at least 2030, even assuming significant gains in power generation and vehicular use.
• The price at the pump is expected to remain significantly lower than gasoline and diesel, and the price differential is expected to widen as gasoline and diesel prices continue to increase.
• Over 98% of natural gas is produced within U.S. borders, providing long term, reliable resources.

• Propane is a by-product of natural gas and crude oil (foreign & domestic) production.
• Propane prices vary, similar to gasoline and diesel.
• • Propane prices are higher than gasoline and diesel and fleet managers can still expect fluctuating prices, especially during the home heating months.
• More than 90% of propane is produced inside the U.S., which makes pricing more stable than before as a direct result to decreases in refining propane through foreign oil imports.

Additional Propane-to-Gasoline AnalysisIt is important to ensure that the GGE conversion is used when making comparisons because:

• A gallon of propane has 72% of the energy of a gallon of gasoline; or
• A gallon of propane contains 28% less energy than a gallon of gasoline

The aforementioned data is derived from the Transportation Energy Data Book (TEDB). The key point to this exercise is to calculate how much one is truly paying for the same amount of energy. That is why the Clean Cities Alternative Fuel Price Report (October 2015) provides exactly that type of analysis with charts that show the comparative price per GGE. . Looking at the Clean Cities’ report, the price of CNG offers a much better economic value than gasoline or propane. Btu values vary slightly from U.S. regions and it is important to check with local fuel suppliers to provide these numbers whenever possible. Also note that CNG and propane, have two different Btu numbers: an HHV (Higher Heating Value = Gross) and an LHV (Lower Heating Value = Net), both calculated based on heat of combustion, a term that measures the energy released as heat when a compound undergoes complete combustion with oxygen under standard conditions. HHV can have a significantly higher Btu value when compared to LHV due to the additional heat (transferred to energy) gained through the vaporization of residual water during the combustion process. The HHV Btu measurement can be employed when evaluating products like natural gas or propane home heating furnaces or hot water tanks because these technologies leverage additional heat (energy) gained through water vaporization. The internal combustion engine, however, cannot capture these efficiencies and so the LHV value must be used due to its inability to recover and utilize the net benefits of water vapor during the combustion process.

The following graphs and charts are taken from various government entities responsible for tracking transportation fuels. They serve to visually show historical, current and forecasted industry trends.

Source: US DOE AFDC Clean Cities Alternative Fuel Price Report (October 2015).

The pie chart below shows that in 2011 (the most current analysis), natural gas accounted for 48% of the alternative fuels consumed; propane’s contribution was 24%. The next release date for the report of this market share data is not available but is estimated that natural gas will capture close to 60% of the market.

Source: US Energy Information Agency Annual Energy Outlook 2013.

Source: US DOE Alternative Fuel Data Center Trend of Petroleum Savings 2004-2013

The U.S. market for natural gas at 24.9 quadrillion Btu per year (consumption) is equivalent to roughly 200 billion GGEs. Thus, the natural gas market today is now actually 14% larger than the on-road transportation fuels market. The propane market (US production) at 2.3 trillion Btu per year is equivalent of about 18.6 billion GGEs or 11% of the size of the on-road transportation fuels market. The amount of propane consumed is actually quite a bit smaller since much of propane is exported.  Propane consumption in the U.S. represents only about 6% of the amount of natural gas consumed. To offset 5% to 10% of the total transportation fuel consumption (8.7 to 17.5 billion GGE), natural gas production would have to increase by about 4.4% to 8.8%, respectively. Propane production would have to increase by a staggering 46% to 93%, respectively. The actual impact on the US consumption would be even more significant since a large share of propane is now exported. For propane, it is doubtful that domestic supply or infrastructure could adjust to this level of demand without having a major impact on prices. Furthermore, there does not appear to be any effort in the propane industry to develop and expand the necessary infrastructure that would be required to service such an increase in demand.

The natural gas industry on the other hand is investing hundreds of millions of dollars to expand its infrastructure to serve the transportation market. Thus, propane is most likely a niche market fuel at best that can help offset future transportation demand, but it will not have a substantial impact on the transportation fuels market or on petroleum imports. Propane proponents’ talking points critique the lack of and cost of infrastructure in the NGV market and choose to ignore the fact—that since 2009 there has been a 111% increase in U.S. CNG infrastructure. Additionally, recent natural gas infrastructure investments have totaled up to $750 million ($3/4 billion) with multiple stakeholders actively engaged in its development:

• Local gas distribution companies
• Natural gas retailers
• Natural gas exploration & production companies
• Leasing companies
• Customers (existing users of NGVs)
• “Traditional” fuel retailers (Truck Stops and “C-Stores”)

Very simply put, both the capital and operating expenses of natural gas infrastructure, no matter how high or low, should be considered and weighed against projected revenue (or fuel savings) to determine investment worthiness (i.e., will the investor, whether it be a fleet or fuel provider, net a desirable return on their investment). Given the sheer volume of investments occurring in natural gas fueling infrastructure today, it appears that the answer is a resounding “yes”.

Last reviewed: January 29, 2016