Homer Alaska - Business

Story last updated at 3:39 PM on Wednesday, September 7, 2011

Propane has potential to power state



By Andrew Jensen
Morris News Service - Alaska

Hank Hill only wishes he could have sold this propane accessory.

The television dad from the long-running cartoon series "King of the Hill" was never shy about lauding the benefits of propane — and propane accessories — for grilling and home heating.

Now just imagine if the truck-driving Texan had a 362-horsepower, 6.8-liter V-10 Ford F-450 powered by propane autogas to sell.

Real-life Hank Hills like Alaska Natural Gas Development Authority CEO Harold Heinze and legendary auto engineer Jack Roush, along with ROUSH Cleantech Vice President of sales and marketing Todd Mouw, are just as excited about the potential for propane in Alaska.

Heinze, Mouw and ANGDA Propane Supply Coordinator Mary Ann Pease hosted a press event Aug. 25 after what Heinze called a "eureka moment" the day before in meetings with operators on the North Slope to discuss the potential for a fleet conversion to propane-powered vehicles.

Roush, who may be best known as the CEO of ROUSH Racing for his multiple championships in NASCAR Nextel Cup and Craftsman Truck Series, has developed a liquid propane autogas fuel system through ROUSH Cleantech that performs identically to gas and diesel powered engines with no loss in horsepower or torque.

"The tie that binds and pulls us together — whether we're making things go fast on the racetrack or making things go green with an alternative fuel — is that power train DNA," said Mouw. "We understand how to integrate a power train into a vehicle and make it as efficient as possible."

Roush also is a "made in the USA" man, Mouw said, and liquid propane autogas offers a way out of the national dependence on foreign oil. The U.S. imports about 11 million barrels of oil per day while exporting 2 billion gallons of propane per year.

Propane is the third-most popular engine fuel around the world, with 15 million vehicles powered by it.

"You are sitting on a gold mine here," Mouw said.

The great challenge of commercializing Alaska's natural gas through either a large or bullet pipeline has been the lack of large customers, or anchor tenants, that would make a project financially viable.

Such customers also would be needed to make propane widely available across Alaska from metro areas of Southcentral to the remote villages, and ANGDA thinks they could have them from the oil producing companies and contractors on the Slope.

Heinze said about 50,000 barrels of propane are produced each day on the Slope, with about a third injected back into the reservoirs.

Existing infrastructure on the Slope means fleets could be running on propane autogas as soon as this winter if operators choose to convert to ROUSH Cleantech vehicles.

"There is some minimal amount of supply, a few hundred barrels per day, maybe 1,000 barrels per day that can be made available using the existing facilities that are up there," Heinze said. "It will require storage, it will require loading racks, it will require other things, but it's not a huge investment. It's not a major facility."

A propane fuel system adds about $9,000 to $11,000 in cost per vehicle, but the payback on the initial up-front cost could be less than a year with the potential to save $3 to $4 or more per gallon in trucks that use 30 gallons of fuel per day.

The benefits would go not only to the bottom line of producers and contractors on the Slope, but to improved air quality as well. Propane produces 24 percent fewer greenhouse gas emissions, 20 percent less nitrogen oxide and as much as 60 percent less carbon monoxide.

Research cited by ROUSH has shown propane autogas also can cut emissions of carcinogens such as benzene and toluene by up to 90 percent.

Using propane to power vehicles on the Slope would end the need to truck expensive low-sulfur diesel from Fairbanks, as well as removing the management risks of fuel spills because propane — delivered as a liquid under pressure — is released as a gas and, if spilled, won't pool or leave residue.

ROUSH Cleantech provided a pair of loaner vehicles to operators earlier this year to reassure its potential customers about the ability to perform in the frigid weather and they passed the test in temperatures reaching 55 degrees below zero.

Around Anchorage, propane fueling stations are charging about $3.50 per gallon for the fuel imported from Prince Rupert in Canada. With large customers on the Slope, propane could be barged, trucked or shipped by rail and reach residents for a price as low as $2 per gallon.

Compared to the $4 per gallon for gas and prices doubling that or more in villages powered by diesel, the benefits for Alaskans could be tremendous in reduced cost of living, especially for areas that would never see the advantage of a natural gas pipeline if it were ever built.

Because propane can perform like natural gas, electricity costs in Fairbanks that are three times that in Southcentral also could be slashed dramatically.

The costs of adding propane fueling stations also are much less than compressed natural gas, which is often cited as an alternative fuel solution.

A propane fueling station can cost as little as $20,000 to install, and many propane marketers will waive that cost in exchange for contracts, compared to the $500,000 cost to install a CNG fueling station.

Andrew Jensen is a reporter for the Alaska Journal of Commerce.

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