Compressed natural gas stations around the state are seeing gains in fuel sales and demand, despite lower costs this year for traditional fuels.
The number of public stations has nearly doubled over the past 18 months — up to 12 from seven — with at least one company planning an additional site in the next year and a half.
And while drivers recently experienced a break in gasoline prices, the cost of natural gas throughout the state remains well below that of traditional fuels.
According to the U.S. Energy Information Administration, the average price of gasoline nationwide is about 90 cents lower than the same time last year at $2.80 per gallon. By comparison, the highest cost of CNG in the state was $2.49 per the equivalent of a gallon of gas, although many stations were well below that at between $1.05 and $1.60, according to CNGPrices.com.
Mitchell Simpson, the director of the Arkansas Energy Office, said in an interview that lower gasoline prices are usually temporary and would cause only a “marginal dip” in CNG sales.
“You might see a slight decline in the interest or execution of those projects, but not enough I would say that it derails the industry at all. … As we’re seeing right now, those petroleum prices are swinging right back up,” Simpson said.
Building Stations
According to the U.S. Department of Energy, the number of public CNG stations in Arkansas has grown to 12, with locations stretching from Forrest City and Jonesboro in the east to Fort Smith and Springdale to the west. In January 2014, Arkansas Business noted Little Rock was opening the seventh CNG station in the state the following month.
The state’s Gaseous Fuels Rebate Program has been one way to further incentivize people to make the change to CNG.
The program has awarded more than $2 million in its first two years, which includes funding for new CNG stations as well as vehicle conversions to use CNG or another alternative fuel source. Simpson said the state awarded only one station grant in the second year of the program because of a lack of eligible projects, but noted that there is still interest in building CNG sites.
“I would say that the demand for compressed natural gas products remains pretty strong. We saw a healthy number of applicants during this last round” of the program, Simpson said.
Shannon Mirus, a spokeswoman for Arkansas Oklahoma Gas Corp., said demand for CNG prompted her company to open two public CNG stations in Fort Smith, the first of which opened on South Waldron Road in 2011. The company received $200,000 from the Gaseous Fuels Rebate Program for its second location, which opened about a year ago on Savannah Street. The two stations now sell about the equivalent of 25,000 gallons of gasoline per month.
Mirus said that several local companies, and some that pass through the city, were turning to CNG. She pointed to an announcement in May by Ryder System Inc. that Alpha Packaging Inc. and Boyd Metals Transportation LLC had signed agreements to lease CNG vehicles that would be maintained in Fort Smith.
“We’re really excited about growing CNG in Arkansas, and we think that it’s a good opportunity,” Mirus said.
Dan West, the controller for Krug Energy of Higginson (White County), said a decline in activity in the Fayetteville Shale led his company’s owners, who also own a transportation company that hauls fracking fluids, to build their own station.
“With things getting cut back the way they were with the oil play, we knew we needed to cut costs, and fuel was a big one,” West said.
The company acquired land off of Highway 67/167 in Searcy and built the station at a total cost of about $3 million. The station opened in December, and the amount of diesel gallon equivalent sold has increased from 50,717 in January to 62,151 in May.
West said the station’s customers have included drivers from Frito Lay and Swift Transportation, which delivers to the Wal-Mart distribution center in Searcy. He said the company is also considering adding another station, but declined to say where it would be located.
Southwestern Energy Co. of Houston also reported gains in CNG sales in recent years.
Roy Gossett, a support services analyst who oversees operations at Southwestern’s CNG stations in Arkansas, said in an email that the company’s stations — one opened in Damascus in May 2011 and another in Conway in October 2013 — sold a combined equivalent of 428,000 gasoline gallons last year.
The site in Damascus was chosen because that is also where the majority of the company’s Arkansas fleet is located. The Conway location serves the fleet at the company’s regional headquarters, but also the city of Conway’s fleet and other central Arkansas companies and residents.
Gossett said the company has not seen a “significant impact” from the decline in gasoline prices.
“Since the establishment of our first station in Damascus, we have witnessed a steady growth over time, with more company, municipal and private vehicles using our facilities,” Gossett said.
A spokeswoman for the company said Southwestern doesn’t currently have plans for adding any stations in the state.