The Economics of Converting Vehicles to Natural Gas

At a small meeting last week at Washington & Jefferson College (in Washington, PA, near Pittsburgh), representatives from Columbia Gas of Pennsylvania, Range Resources and Pittsburgh Regional Clean Cities presented to several area fleet operators. They were making the case for the economics of switching their cars and trucks to compressed natural gas, or CNG. Widespread use of natural gas to power vehicles will likely start with “fleets” of vehicles—taxis, trucks, buses—and the early adopters will likely be schools, government and larger companies.

We get the following figures on conversion costs from Dan Cotherman, business development manager for driller Range Resources:

According to Cotherman, the cost of retrofitting a light- to medium-size car or truck with the technology to burn both CNG and gasoline or CNG and diesel costs between $6,000 and $10,000 per unit, while converting a heavy-duty truck would cost between $12,000 and $18,000.

But the upfront conversion cost would be quickly recovered by fuel savings, according to figures provided by Cotherman: Diesel fuel is selling at $4.12 per gallon, while gasoline is $4 per gallon. The gallon equivalent price of CNG is $1.80.

"Even today, you can save from 30 to 50 percent on your fuel costs," Cotherman said, adding that everything from lawn mowers to garbage trucks can be converted to run on CNG.

"It probably doesn’t pay you to retrofit your family car, but for fleet vehicles, the payback can be impressive," he said.*

*The Observer-Reporter (May 15, 2011) – Driving for CNG conversion