Record petrol prices and concerns for the environment have led an almost universal acceptance that we need to look at investing in alternative fuels. Check out how readily available alternate fuels such as LPG Autogas, and Bio-Fuels are, the pricing and accessibility of hybrid vehicles, and what practical considerations and benefits comes from running a green business.
When NRMA Businesswise asked its members about green fuels, more than a fifth said they’d already converted their fleets to a greener option. Almost half said they were interested in following suit.
While there’s been a lot of noise about hybrids and bio-fuels, the reality is that the adoption of these alternatives is limited by practical considerations.
There are, for example, currently only five hybrids available on the Australian new car market. Three are premium priced models from Lexus and only two – the Toyota Prius and the Honda Civic – are available at prices likely to be considered affordable by a business operator. That’s fine so long as your business needs a small-to-medium sized passenger car. If you want anything else – a van, a utility or a large sedan – you’ll have to look somewhere else.
Availability of Bio-fuels
Of the various bio-fuels that have been proposed, only ethanol is commonly available at service stations – at a ten per cent mix with petrol. E10 is fine as far as it goes, but the really significant C02 and running cost reductions come from running on E85 (a mix of 85 per centethanol and 15 percent petrol). Saab is leading the charge for E85 in Australia. Launched at the Australian International Motor Show last October, the Saab BioPower is a flex-fuel ethanol powered version of its 9-5 model, which can run on E85 or petrol, or any combination of petrol and ethanol from the one fuel tank.
“Since we put the first Saab BioPower test vehicles on Australian roads in January we have had a huge amount of interest from governments, ethanol producers and the general public,” says Saab Australia’s Parveen Batish.
“Based on this positive feedback we believe Australians are willing to invest in BioPower, which will help stimulate the demand needed to convince fuel retailers and regulators to facilitate the introduction of E85 fuel pumps at service stations locally.”
In Saab’s Swedish home market nearly 900 E85 pumps have been established since BioPower was launched two years ago and more than 20,000 BioPower vehicles have been sold. In Australia to date there are just two E85 pumps – one each in Sydney and Melbourne.
Benefits of LPG Autogas
One alternative fuel for which availability is not an issue is LPG Autogas. There are more than 3,200 Autogas outlets around Australia. In 2006, Ford Australia drove an LPG-powered Falcon around Australia, covering 13,000 kilometres as it passed through every mainland state and territory. At the end of the 23-day trial, the Falcon had used less than $1,000 worth of Autogas.
“Many people are debating about the need to encourage the development of alternative fuels, but the best and most viable alternative fuel is already easily available.” says LPG Australia industry development manager Phil Westlake
“With Autogas priced around 50 percent less than unleaded petrol, there are substantial savings to be made. The more kilometres travelled, the more you will save.”
“Autogas also produces extremely low particulate emissions that are otherwise visible as smoke, and has one of the lowest greenhouse gas emission lifecycles of all retail fuels,” Westlake adds.
LPG typically has around 20 percent less ozone-forming potential (a measure of the tendency to generate photochemical smog), between 10 and 15 percent lower greenhouse gas emissions and only one-fifth the air toxics emissions.
LPG Autogas vehicles operate even more relatively cleanly when the engine is cold. Given that most urban-use vehicles are often used for very short journeys this means a significant reduction in ‘real world’ emissions.
These financial and environmental advantages have resulted in a strong shift in sentiment towards LPG use amongst professional fleet managers in recent years. Major automotive and building glass company O’Brien runs more than 200 Toyota HiAce vans on Autogas. O’Brien national purchasing manager Ian Forrester said that as petrol prices had escalated, so too had the fleet’s uptake of Autogas vehicles: “Our operating costs blew out with every petrol price hike. LPG kept looking better and better.”
The green reasons
Environmental considerations have also driven the O’Brien fleet’s Autogas uptake.
“Our foremost consideration was initially cost, but our company is now looking at ways to reduce our carbon footprint going forward. LPG is a big part of that, as well as being a key factor in fleet cost reduction. It’s a win-win situation.”
On a smaller scale, Lanier Australia’s 60-strong nationwide servicing fleet runs on Autogas. Lanier national service manager Andrew Jeffress said that after trialing Ford’s dedicated LPG E-Gas Falcon in 2000, he phased petrol vehicles out of the fleet and he remains convinced it was a shrewd decision.
“I’m certain we did right thing by going all-Autogas. I don’t even look at anything else now.
“The residual values remain higher than petrol equivalents. Everyone is looking to choose Autogas cars now, which makes them easy to sell at the end of their service life.”
Westlake says independent data from auction houses show that a typical used LPG vehicle is now achieving a $1,500-to- $3,000 premium when sold.
Jeffress says he was doubtful other mainstream fuels would outperform Autogas in meeting the company’s future needs: “While petrol prices remain high – and I’m not expecting that to change – I’m sold on the gas concept. I’m doubtful that even diesel can provide the same value for us as LPG – and then there are the environmental considerations.”
Huge cost savings
Even the police are converts to LPG. The New South Wales police operates about 500 LPG-powered Falcons, Commodores and Mitsubishis. Its fleet management service director, Keith Simmons, says NSW Police can afford more officers on the beat thanks to the fuel cost savings.
“By using LPG Autogas and hybrid-powered vehicles, the NSW Police Force fleet saved over $1 million in fuel costs in 2006 and simultaneously reduced its greenhouse gas emissions,” he said.
“The fuel cost savings bolster active police resources and are retained at Local Area Commands and used to fund other police requirements, such as overtime and investigations.
“Basically, it puts more police on the street.”
One of the country’s largest private vehicle fleet operators, the NRMA, aims to convert 95 percent of its Roadside Assistance vehicles to run on LPG Autogas by the end of 2008.
By doing so, it estimates it will save over $1 million in annual fuel costs and simultaneously reduce the greenhouse gas emissions of every LPG-converted vehicle by 15 percent, amounting to 406 tonnes of CO2 over the past year. NRMA logistics manager Sam Caruana said the NRMA’s switch to LPG Autogas commenced in 2004.
“We recognised our responsibility as the country’s largest road service organisation to capitalise on Autogas’ significant environmental and economic benefits, thereby providing an example for other road-based businesses, our members and other motorists to follow.
“We trialed dedicated E-Gas Ford Falcons in early 2005, which proved to be very successful in delivering operating cost reductions and meeting our green agenda. “Our uptake snowballed from there and we never looked back.”
Phillip Westlake is industry development manager for LPG Australia (www.lpgaustralia.com.au).
