FleetSmart Profiles: Pickups, Vans and SUVs

Modern Dry Cleaners – Ottawa, Ontario

Conversion to Natural Gas Cuts Delivery Van Fuel Costs

Modern Dry Cleaners of Ottawa, Ontario, provides a personal and industrial dry-cleaning service in the National Capital Region. A decision in the early 1990s to convert delivery vehicles so that they operate on natural gas has proven a big winner for the company. Today, fleet fuel costs are about 32 percent lower than those if the vehicles used gasoline.

Searching for a low-cost transportation fuel

Modern Dry Cleaners operates three vehicles – two medium-sized cube vans and one panel van, all equipped with eight-cylinder engines. The vehicles transport clothing and other items to and from the company's central laundry and dry-cleaning plant in downtown Ottawa. They also take workers and materials to on-site jobs such as cleaning the curtains and blinds in office buildings.

Most of the company's business is conducted in the Ottawa area, and the average daily travelling distance is about 170 kilometres per vehicle. Loads are not heavy, and the vehicles are usually filled to capacity with clothing and other material long before weight becomes a concern.

Despite the small size of the fleet, fuel costs are an important item on the company's balance sheet. Rising gasoline prices in the early 1990s compelled second-generation owner and manager Ron Potter to start investigating alternatives. He likes what he has found in natural gas.

Natural gas most economical

For a period, Modern Dry Cleaners bought diesel-fuelled vans as a cost-cutting strategy. Mr. Potter acknowledges that diesel fuel worked well and, as expected, was more economical than gasoline. However, the diesel vans were more expensive than gasoline vehicles, and the fuel costs were still substantial. Mr. Potter's ongoing research then led him to natural gas, which has proven the most economical of all the available options.

Converting diesel engines is not practical, so when the decision was made to go with natural gas, Modern Dry Cleaners chose to buy new gasoline vans and immediately convert them to run on dual fuels (gasoline and natural gas). This means the company has been eligible for Ontario's provincial sales tax rebate (up to $800) for vehicles converted to alternative fuels before they are six months old.

During the conversion process, which takes about a day, each van is fitted with two natural gas storage tanks. One tank is installed beneath the floor of the van, while the second is carried in a fabricated frame inside the cargo area. The natural gas refuelling valve is positioned under the hood.

Mr. Potter explains that the standard gasoline tank is retained so that the van can operate on gasoline if it runs out of natural gas. (Drivers can change from natural gas to gasoline with the flip of a switch.) To ensure that the gasoline fuel pump and fuel injectors are kept in good working condition, drivers start the vehicles on gasoline and switch to natural gas after a couple of minutes of running. They have experienced no starting problems, and the engines pick up well on natural gas, even at low temperatures.

Driver support a key to success

Recalling the early days of the conversion program, Mr. Potter acknowledges that the company's drivers were a bit sceptical at first about natural gas but soon began to use the fuel as much as possible. In fact, drivers have been supportive of the conversion program. This is due in large part to the fact that there has been no noticeable difference in power output with natural gas and there is only the briefest "blip" in the engine when drivers switch between fuels on the road.

"Our drivers like to compete amongst themselves to see who can drive the longest without refuelling with gasoline," reports Mr. Potter. "One of our drivers was very proud of the fact that he had filled the gasoline tank in February and then didn't have to fill it again until June."

Typically, the vans can run for three months without refuelling with gasoline. Natural gas refuelling is required every second day. At one time, Modern Dry Cleaners had an on-site refuelling compressor at its central depot. (The compressor was rented from the local gas utility.) However, the opening of a public natural gas refuelling facility directly across the street from the depot has eliminated the need for on-site refuelling. This further reduced the cost of operating the natural gas vehicles.

Impressive cost savings

While Mr. Potter is aware of the environmental benefits of using alternative fuels in his fleet vehicles, including reduced emissions of toxic pollutants and greenhouse gases, the primary reason for switching to natural gas was the impressive cost savings. After fuel, engine conversion and other costs are taken into account, the company has determined that it is operating each van for about $300 per month – about 32 percent less than it would cost to operate the same vehicle using gasoline (see the cost comparison box).

Cost Comparison: Gasoline Versus Natural Gas

Modern Dry Cleaners' vans normally operate an average of 22 working days per month. The usual daily cost of fuel for a gasoline van is $20 (2001 prices). For a natural gas van, fuel costs about $13 per day. The monthly cost comparison, per van, is as follows:

*The $2,200 cost of a conversion is offset by a $500 rebate from Natural Resources Canada and the $800 Ontario provincial sales tax rebate, which reduce the actual cost of conversion to $900. Over the anticipated 10-year life of the van, this results in a cost of $90 per year, or $7.50 per month ($90 ÷ 12).

**Modern Dry Cleaners bought used tanks at a depreciated price of $400 each.

Mr. Potter says maintenance costs are also reduced with natural gas, since the engine oil remains much cleaner. Thus the company can skip every second scheduled oil change without affecting engine performance. Modern Dry Cleaners has also found that natural gas vehicles last longer than gasoline or diesel vans.

Natural gas: a good fit

Not surprisingly, Mr. Potter is convinced of the value of natural gas as a transportation fuel. He plans to continue to convert new vehicles acquired by the company.

Mr. Potter prefers dual-fuel conversions, as they allow the vehicles to occasionally go beyond their normal delivery area without the drivers worrying about being able to refuel. As well, the conversion equipment and natural gas storage tanks can be removed and used on other vehicles. Therefore, retaining the dual-fuel capacity leaves the original gasoline tank and system in place for easy conversion back to gasoline operation.

"Our experience with natural gas has been completely positive," says Mr. Potter. "There have been no starting or running problems and no breakdowns. We also find that idling with natural gas wastes less fuel and money than with gasoline. This is a significant issue in city driving, with all the stop-and-go traffic."

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