Houma’s Gaubert goes natural

Drivers haven’t been able to tank up their automobiles for less than $2 per gallon since 2008, and although a new fueling station in Houma offers consumers that alluring price, few are in a position to take advantage of it.

Gaubert Oil Company, privately owned and based in Thibodaux, invested more than $1 million in constructing a compressed natural gas fueling station, according to Grady Gaubert, president of the 87-year-old fuel supply company.

The venture opened nearly two months ago adjacent to Texaco – Gaubert’s of Houma on South Van Avenue as the first of its kind in the Tri-parish area and one of 14 public stations throughout the state, according to the Department of Energy.

“It’s a developing transportation fuel,” Gaubert said. “It’s not going to be a tremendously high source of revenue for us. It is a long-term investment, but we’re learning a lot from it.”

Of all potential alternative fuels, natural gas has staying power attributable to its abundance; low combustion-emissions; consistently low price; and ease of assimilation with traditional pumps, he said.

CNG is sold to consumers in units of gasoline gallon equivalent, a measurement that serves as a baseline for energy content comparisons. One gge of compressed natural gas roughly equates to 1 gallon of gasoline in terms of an automobile’s mileage radius.

The actual conversion shows that 1 gge of CNG actually contains more British thermal units (energy content) than 1 gallon of gasoline, and that number grows when comparing a gge to gasoline blended with ethanol. So 1 gge of CNG should power a car to drive slightly farther than 1 gallon of most gasoline blends on the market.

Gaubert anticipates selling 4,000 gges per month. At the current $1.59 retail price, that would equate to $76,320 in gross revenue over the course of a year.

“It’s a long-term investment,” Gaubert said. “At this point in time, there’s a low demand for that product. … It is somewhat of a risk, but we’re talking to a number of people that are going to adapt their fleets to use natural gas as time goes on, so now that the product is available, more and more fleets will buy natural gas vehicles.

“It’s the cart and the horse, chicken and the egg, whatever you want to call it.”

Gaubert purchases natural gas from the parish-owned distribution pipeline, paying the same rate a homeowner does for energy to light his or her gas-powered stove.

The company then compresses the gas using its own equipment and retails the fuel from its Houma station. Transfers in and out are done on site, from a pipeline that runs beneath the road to the conversion equipment fenced off beside the station.

“We have to match our equipment to that inlet pressure and to our outlet pressure,” Gaubert said. “We boost it up, we store it in some spheres and then we compress it through some dispensers that are very similar to gasoline dispensers.”

The dispensers accept credit cards. Users then hook up a valve from one of four fueling positions on two pumps to an on-vehicle tank and latch it into place with a knob. The dispenser reads the tank’s pressure and, after the consumer presses a button, begins pumping CNG until it reaches the tank’s pressure threshold.

“We can fuel anything from light duty, which is automobiles, all the way up to heavy duty, which is 18-wheeler trucks,” Gaubert said. “And that’s a fast-fill location, which is 13 gges per minute. … It’s only going to take 2 or 3 minutes to fill up a vehicle with CNG.”

GOVERNMENT TRANSITION PACES EARLY INCOME

Most of Gaubert’s reliable business in the near term will be Terrebonne Parish Consolidated Government, which has begun its rollout of 18 natural gas-powered vehicles across a variety of departments.

Siamak “Mac” Mokhtarnejad, TPCG’s associate utilities director over gas distribution, is the parish’s de-facto spokesman regarding the transition to CNG-powered vehicles.

Not all of the CNG-powered parish vehicles have hit the streets just yet, as some are being outfitted with equipment and others are still awaiting delivery, but they are to be spread out across the parish’s departments, Mokhtarnejad said.

The parish spent about $1 million on the new vehicles, but CNG or not, government officials was going to replace some of its fleet. The average differential between traditional automobiles and those powered by CNG is about $9,000, Mokhtarnejad said, which makes the actual investment closer to $162,000.

Like Gaubert, Mokhtarnejad acknowledges the investment is a longer play. He declined to estimate short-term savings to the taxpayer, but said in less than two months, the parish has already tanked more than 1,000 gges.

Given that each gge saves conservatively, $1.80, the savings to the parish even before the full rollout of the first 18 vehicles is about $1,800 over that time.

“Not all of them are on the road yet, so you’re going to see that number go up.”

The parish started its transition to CNG by replacing the vehicles that log the most miles, the gas distribution manager said.

In terms of performance, the CNG automobiles are indistinguishable from traditional vehicles, Mokhtarnejad said.

Mokhtarnejad was initially skeptical of natural gas as a fuel, he said, but after researching its environmental and economical benefits, the energy source won him over. He cited three main benefits: low emissions at combustion, a stable and cheap price for the same mileage and that it benefits Louisiana producers of natural gas.

“When you start looking at the whole picture, you have to ask the question, ‘Why not?’” he said.

Gaubert said his toes had been dipped in the proverbial water, but the spark that made this project a reality was parish government’s interest in making the change.

“We met years ago with (oil and gas producer) Chesapeake Energy in identifying the feasibility for us to go into CNG,” Gaubert said. “When we heard about Terrebonne Parish being interested in it, I approached Terrebonne Parish. … There’s not a contract. There’s not an agreement, written or unwritten, other than we’re a private enterprise, we elected to do it, and they elected at the same time to do this. “

LACK OF CNG STATIONS, INTEREST DAUNTS PRIVATE MARKET

Private consumers are at best secondary market for Gaubert as a CNG retailer, because they have not made the transition at the same rate as some commercial enterprises.

Although the auto industry has begun manufacturing CNG-powered vehicles, not many are being sold in Terrebonne Parish.

Barker Honda, for example, has not considered applying to become an approved dealer of the Civic Natural Gas, according to Lester Bimah, a partner and general manager of the dealership.

Consumer demand drives the dealership’s inventory, and few locals have expressed interest in CNG-powered vehicles, Bimah said. Even hybrid models are less desired now that the price of gasoline has dipped below $3 per gallon locally, he added.

“There’s no demand in this area, yet,” Bimah said.

The 2012 Civic Natural Gas starts at $26,305, as the most costly version of the four-door car, according to www.honda.com. The Civic Hybrid retails at $24,360, and the bare-bones Civic Coupe is listed at $17,965.

Team Honda in Baton Rouge is a dealer of the Civic Natural Gas. The state capitol is home to four CNG stations, as many as any other location in Louisiana. Shreveport also has four such stations.

But Terrebonne Ford already offers two lines of natural gas-powered vehicles: the F-250 and F-350. The automaker’s CNG-powered F-150 and E-Series van will be rolled out at the Houma retailer’s location next year, fleet manager Corey Matranga said.

“Ford ventured into this market, and we have decided to move along with the times,” Matranga said. “Terrebonne Parish Government ordered some of them with us, and we believe it’s a direction that the consumers are going to be looking at.”

Prior to Gaubert’s opening, several consumers surveyed the options at Terrebonne Ford, said Matranga, who added that he has heard of industrial interest in converting fleets to run on CNG.

“To my understanding several oil companies that are involved in the natural gas side that are heavily looking at going in that direction,” he said.

Louisiana’s alternative fuel tax credit pays 50 percent of the cost of CNG equipment, whether it is incurred during the conversion of a used vehicle or the purchase of a new one through the Department of Revenue.

Conversion from traditional systems to CNG costs between $6,500 and $12,000, according to Popular Mechanics.

One deterrent to using the fuel source is the lack of public fill-up stations. Including the 14 in Louisiana, there are 632 public stations in the country. However, most vehicles equipped for this source have a secondary tank for gasoline.

Gaubert Oil has been approached to construct CNG stations in locations outside of Louisiana, the third-generation president said. Gaubert isn’t eager to tie up more capital in expanding the venture just yet, he said, but if the market shows sign of growing, he plans to take advantage of it.

“We know how to do it now, and if (the industry) does grow substantially, we can grow with it,” Gaubert said.

BURNS CLEAN BUT QUESTIONS LINGER ABOUT POINT OF EXTRACTION

CNG is a cleaner-burning fuel that can aid automobile manufacturers in their quest to meet federal government emission mandates, one source of motivation for a transition toward a natural gas-powered fleet.

Should an accident pre-empt a spill, natural gas will evaporate instead of pooling, limiting the on-scene danger and run-off pollution, advocates of the fuel point out.

But opponents to increased natural gas production claim that its extraction harms the environment.

On-land developers have devised a way to extract the gas from previously unreachable shale rock formations deep beneath the surface. They do so by injecting undisclosed, proprietary chemicals to crack the formations, a process called hydraulic fracturing and colloquially referred to as fracking.

Environmental advocates have said fracking has contaminated neighboring water tables and caused high emission levels of the potent greenhouse gas methane, as well as volatile organic compounds and hazardous air pollutants, through leakage at the point of extraction.

The Environmental Protection Agency, which has reduced its estimate of harmful on-site emissions, is expected to release a draft report next year of a study into whether fracking has impacted drinking water resources.

Jeremy McCool pumps compressed natural gas into his work vehicle, owned by Terrebonne Parish Consolidated Government. TPCG began transitioning its fleet to CNG this year, to coincide with the new CNG fueling station opened by Gaubert Oil Company in Houma.

ERIC BESSON | TRI-PARISH TIMES