Conversion to a Greener Fleet A Cost-Benefit Analysis of a Conversion to Compressed Natural Gas for a Municipal Bus Fleet

Abstract

Concerns about global warming and energy security, associated with rising oil derivative fuel prices, are spurring interest in exploring alternative sources of energy supply to road transportation means, especially motor vehicles that constitute a major source of air pollution in the world. Natural gas is an important source of energy that is lately being considered as an alternative to fossil fuel and other oil derivatives as a fuel to states’ fleets and pacts. In addition to being a domestically abundant and a secured source of energy, it helps reducing pollution and maintaining a clean and healthy environment. In its attempt to find an economically viable solution to overcome the problem of the rising costs of fuel, CityBus Corporation of Lafayette/ West Lafayette, IN considers improving the energy efficiency of its vehicle fleet whose operation and greenhouse gas emissions are part of the factors affecting local air quality. Thus, the following cost-benefit study compares the total costs of two potential options for municipal bus replacement: standard diesel fueled buses and Compressed Natural Gas (CNG) fueled buses. Since the results shows that the implementation of the CNG alternative has a lower Net Present Value (NPV) cost, moreover, it would potentially reduce greenhouse gases and particulate emissions in comparison to the standard diesel option; the study concludes that the CNG alternative is more viable from both the economic and the environmental perspectives. Thus, the study recommends the conversion of the states’ bus fleet to the use of CNG as a source of fuel to municipal bus fleets.