Year of Publication

2011

College

Martin School of Public Policy and Administration

Executive Summary

Compressed Natural Gas (CNG) is an alternative fuel source which could replace diesel as a fuel for municipal fleets. This paper seeks to examine the viability of CNG and its potential to power Lexington-Fayette Urban County Government’s fleet of waste removal trucks. This paper takes into account financial and environmental factors in determining CNG’s potential, but gives priority to financial considerations. The results of this analysis are mixed—under some future scenarios, compressed natural gas would be a favorable option for the fleet, but given other future scenarios, CNG would not be viable. In terms of environmental benefits, a switch to CNG would represent at most a 0.08% reduction in greenhouse gases, but would net other social benefits such as increased visibility and lower cancer rates.

This analysis takes into account six different scenarios using two different variables. The scenarios are built using three different prices for diesel fuel: high prices, low prices, and the USA Energy Information Association’s point estimate for the price diesel fuel, coupled with two different assumptions about the cost of compressed natural gas trucks compared to the cost of diesel trucks. Under the high price of diesel scenarios, there is a possibility that savings associated with adoption of compressed natural gas to fuel Lexington refuse vehicles could fully offset costs of the switch within a 10-year payback period. Under all other scenarios, the estimated savings would not fully offset costs within that payback period.

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