According to an article in the Sun Sentinel, CNG stations may be poised to dramatically increase as the demand for natural gas is climbing. South Florida gas prices are heading up again after steadily declining since April. But Jeff Greene is hardly worried that higher gasoline prices will hurt his business.
In fact, it may even be a good thing for Greene’s bottom line.
The reason: Greene runs Fort Lauderdale-based Wise Gas Inc., which operates the region’s first and only compressed natural gas station open to the public. Since the station opened last summer, a gallon of pressurized natural gas has held steady at about $2.19 per gallon — one-third cheaper than regular gasoline.
Greene, who heads up the business with his wife Christine Slager-Greene, said Wise Gas has partnered with Hardy Brothers Inc. — owned by the fuel company Port Consolidated Inc. — for a second commercial station in Pompano Beach, which is now operating under a temporary permit for a limited number of customers.
The company is also working to build a half-dozen others around the state, including one in Miami he aims to open by year’s end. He said the demand for cheaper, eco-friendly fuel alternatives produced in the U.S. is rising and CNG fits the bill. As a result, he sees it as a growth industry for Florida.
“Christine and I got into the business in 2008 when gas prices spiked,” Greene said. “At that time, we found that the industry was in flux and there was a void that we could fill.”
Four years ago, CNG was virtually unheard of.
“Nobody even knew what it was,” Greene said. “Now it’s getting more and more popular. Our traffic is up, phone calls are up and our sales are up. We’re averaging about a 500 percent increase in sales each year.”
Many drivers are likely still unfamiliar with compressed natural gas, which is an odorless, colorless, and tasteless gas, comprised mostly of methane, that’s extracted from underground reservoirs — sometimes at depths approaching 25,000 feet — through domestic natural gas wells drilled in geological formations across the nation or in conjunction with crude oil or other fossil fuel production. Think of CNG like a propane tank for a gas grill: A sealed pump transfers the gas from the station to tanks in your car.
Today, Wise Gas has more than three dozen regular customers and his client base is growing by about five new users per month. The Fort Lauderdale station handles about 100 South Florida transactions per week — selling the equivalent of about 6,000 gallons of gas per month.
The company, which employs seven people and relies on a variety of independent contractors, opened a Clearwater CNG facility in October 2011 that fuels fleet vehicles for Verizon and Clearwater Waste Management and operates two private stations for city vehicles in Apopka and Palatka.
In addition, the company offers consulting services, conducts feasibility studies for public agencies looking to open their own CNG stations and contracts for conversions of conventional combustion engines into dual-fuel vehicles that can run on both regular gas and CNG.
Most Wise Gas customers are commercial or municipalities that use fleet CNG vehicles, including AT&T Inc. (the private fuel company’s biggest client), along with some South Florida motorists who use personal CNG vehicles. But with energy analysts projecting the market to grow for CNG, Greene expects his company will expand in the years ahead.
“The Wise Gas business model has changed and evolved since 2008,” said Greene, who owns a Ford Escape and a Chevrolet Cavalier that run on both CNG and conventional gasoline. “But we have continued to grow and develop into a multimillion-dollar business that is on the cutting edge of a fuel revolution.”
One reason: Greene said Wise Gas offers businesses and individual motorists the ability to save money on fuel costs while also making an eco-friendly business that contributes to U.S. energy independence — all factors that appeal to his customers.
Customers like Larry Hall.
Hall is the fuel manager for Cardinal Logistics, a North Carolina-based commercial trucking outfit that serves about 10 major clients in South Florida. Hall recently purchased a CNG truck to test the technology’s savings potential.
“It is a great leap of faith,” he said, “but we make it with eyes wide open and we hope it’s going to pay off down the road. It all comes back to the word entrepreneur, one who assumes the risk of doing business.”
Hall noted even incremental savings on the cost of diesel fuel can make a competitive difference in today’s market, even if it takes years to recoup the initial investment Cardinal has made in the CNG vehicle.
“There are obvious savings because CNG is plentiful and it’s easier to produce than diesel, and the cost is better,” Hall said. “So we bought a CNG truck as a test unit … to see where the savings lie. We think we’ll get our money back in a couple years.”
About 112,000 CNG vehicles are on the road in the United States — compared to some 13 million-plus worldwide, according to industry estimates. About 1,000 CNG fueling stations are in the United States, about half open to the public, the U.S. Energy Information Administration estimates.
One reason the numbers are small: Adding a CNG tank to a gasoline- or diesel-powered vehicle is expensive, costing from $4,000 for a small car to tens of thousands of dollars for a large truck .
Even so, many companies and cities are embracing CNG now. Choice Environmental Services of Fort Lauderdale is expanding its line of more than a dozen CNG garbage trucks. AT&T, Verizon Communications Inc. and Office Depot also use CNG-powered vans.
More CNG vehicles are also in the pipeline, with General Motors Co., Suzuki Motor Corp., Honda Motor Co., Ford Motor Co. and Fiat all manufacturing CNG vehicles.
Greene said all of these factors are creating a “growing market momentum” for CNG vehicles that he predicts will accelerate in years to come.
When he started his business, Greene said, he couldn’t envision how far the company would come in just four years.
“We reached out to 12 municipalities to see who was willing to stick with it and found several in South Florida,” he said, noting he was able to secure about $2 million in economic stimulus grant funding to launch Wise Gas and open its first facilities (which typically cost at least $500,000 to get up and operating).
“We jumped into this thinking we could do a good thing and make money doing it,” he said. “We had sales in excess of $2 million in 2011 and we are continuing to grow.”
About natural compressed gas
It’s an odorless, colorless, and tasteless gas, comprised mostly of methane. It is extracted from underground reservoirs — sometimes at depths approaching 25,000 feet — through domestic natural gas wells drilled in geological formations across the nation or in conjunction with crude oil or other fossil fuel production.
It is stored in high-pressure fuel cylinders (like propane) — at 3,000 to 3,600 pounds per square inch — according to the U.S. Environmental Protection Agency. CNG is made by compressing natural gas to less than 1 percent of its volume at standard atmospheric pressure.
Like gasoline, CNG is combustible, and powers a combustion engine much like conventional gas, but it burns more cleanly. CNG mixes with air in the cylinder of an engine and is ignited by a spark plug to move a piston up and down.