Colorado buys natural gas vehicles for facilities with no nearby fueling stations

Arthur Kane
|
Sep 02, 2014 11:12 AM
Colorado buys natural gas vehicles for facilities with no nearby fueling stations

By Arthur Kane | Watchdog.org

Colorado has so far spent $8 million in taxpayer money on nearly 240 compressed natural gas vehicles, with dozens of them stationed in places where there is no compressed natural gas filling stations, Watchdog.org has learned.

And the state expects to buy more CNG vehicles, costing $7,000 to $11,000 more than comparable gasoline-fueled vehicles, in the 2015 fiscal year. Many of them are destined for state facilities that also have no current CNG filling station nearby, state records show.

Because of the lack of fueling stations, state workers apparently continue to run many of the vehicles on more expensive gasoline, negating any of the environmental benefits and cost savings touted by supporters of the more expensive vehicles, memos and emails obtained by Watchdog.org show.

When told of the documents, state Sen. Greg Brophy, R-Wray, who co-sponsored a bill in 2009 requiring state agencies to buy CNG vehicles when practical, said Gov. John Hickenlooper’s administration is clearly not following the legislation.

“It’s just the typical way government works,” he said. “When you spend someone else’s money, you don’t think about it appropriately.”

Colorado’s CNG vehicle purchases are part of a major push by Hickenlooper to increase the state’s alternative fuel vehicles for, what many would argue, are the laudable goals of saving tax money on fuel and improving air quality.

Hickenlooper and Oklahoma Gov. Mary Fallin  announced the push in 2011 at the Governor’s Energy Conference in Oklahoma City, and 22 states signed on.

Hickenlooper declined to comment for this story, but his spokeswoman sent a statement that said, “Governor Hickenlooper has been a supporter of a balanced energy portfolio for Colorado, which includes renewables, natural gas and the responsible development of all of Colorado’s energy resources.”

Memos show, however, the Hickenlooper administration is also very interested in helping create a market for CNG vehicles and stations for Colorado’s natural gas producers.

Hickenlooper has been a supporter of the natural gas and other energy production industries in Colorado that have met resistance because of environmental fears about fracking and energy development near residential areas.

“(P)urchasing ‘Compressed Natural Gas’ (CNG) vehicles will be the first option when replacing older inefficient vehicles wherever practicable,” State Fleet Manager Ron Clatterbuck wrote in December 2012. “This will allow the state to take advantage of Colorado’s vast reserves of natural gas, reducing our dependence on petroleum, creating new jobs, and reducing our carbon foot print… The executive directors for each agency have been informed by the Governor of the plan to purchase CNG vehicles as the first option, so we believe that compliance should not be a significant issue.”

Clatterbuck continued to press for more CNG purchases in July 2013. “We had a meeting with the Governor’s Chief of Staff on Friday, and she said ‘unequivocally’ that (State Fleet Management) and the agencies need to do better going forward purchasing more CNG vehicles,” he wrote. “So the pressure is increasing and will only intensify as we go forward.”

In February, Scott Madsen, director of the division of central services, also criticized departments for dragging their feet.

We “are very concerned about the low number of CNG vehicles being requested,” he wrote.  “As you know this is a major initiative of this administration … It appears from the vehicles submitted that there are a lot of opportunities that were reasonable and available but were not found as acceptable by some departments.”

Colorado Energy Office transportation program manager Wes Maurer conceded it would be wrong to push vehicles that aren’t appropriate for the intended uses of the departments.

“We don’t advocate pushing any choices on fleet managers,” he said. “I don’t see as typical in the state. We never wanted that conversation in this office.”

Department of Natural Resources and Colorado Parks and Wildlife division staff have tried to fight the purchases, citing the waste of taxpayer dollars.

DNR website

DRIVING: DNR officials push back on CNG vehicles.

“I find it interesting that the cost is a big topic now,” CPW fleet manager Michelle Arnold wrote in March 2013.

“If these vehicles are put in place where CNG doesn’t exist then you pay for the additional cost of buying a CNG compliant vehicle and you continue to fuel it with gasoline which is more costly than CNG,” Arnold wrote. “I understand the argument that if you buy them, the CNG distributors will come but you can’t use that argument that the CNG vehicles will pay for themselves in a relatively short period of time until you can actually fill them with CNG.”

But Maurer said CNG stations are being built all over the state so vehicles in far-flung places will soon have nearby fueling stations.

“The infrastructure is expanding very rapidly,” Maurer said, adding taxpayers will see savings from the program. “It’s an up-front investment.”

There is also a question of whether the state purchase of CNG vehicles is legal. While Hickenlooper’s staff cited a 2009 bipartisan bill requiring state agencies to buy CNG and alternative fuel vehicles when possible, Senate Bill 2009-092 exempts departments from buying alternative vehicles if the vehicle or fuel costs 10 percent more than petroleum vehicles or don’t have adequate fueling facilities.

Even at $7,000, the premium on the $25,000 and $44,000 CNG vehicles far exceeds 10 percent, Brophy said. He said he intends to ask members of the legislature’s Joint Budget Committee to question administration staff about the purchases.

“It sounds like they’re breaking the law with these purchases, exceeding that by 30 percent,” Brophy said. “We didn’t give authority for that.”

Energy office spokesman Nate Watters pointed to subsequent legislation, Senate Bill 2013-70, that requires state agencies to consider the cost of the vehicle, fuel costs, maintenance and resale value in whether alternative fuel vehicles cost 10 percent more.

Using that standard, it’s impossible to determine whether the state is violating the 10 percent rule on any vehicles until they’re driven, fueled, maintained and sold.

But it’s clear that if CNG vehicles are still using more expensive petroleum, they won’t be able to offset the higher cost of the cars. DNR records show it’s unlikely a majority of their vehicles regularly use CNG because the pumps are too far away.

A Watchdog.org review of about 170 CNG vehicles the state either purchased or expects to purchase, shows nearly 60 percent of those vehicles are more than 30 miles away from a natural gas station. Thirty percent of them are more than 50 miles away.

There are 30 CNG vehicles in the department that are stationed more than 100 miles away from a CNG station, with the farthest one anticipated to be stationed 199 miles away, records show.

State departments also can’t meet CNG purchasing quotas set this year. The DNR, Colorado Department of Transportation, Department of Corrections and Department of Labor and Employment fell 74 vehicles short of the 166 the agencies were to have purchased, a Feb. 2 memo shows.

The DNR was held up for particular scrutiny for missing its target. “Agency justification not warranted,” the memo showed.

Fleet and DNR staff didn’t return calls seeking comment and CPW spokesman Matt Robbins wouldn’t comment on the memos his department provided under state open records laws. “I have not taken time to prepare myself on these documents,” he said last week.

Brophy wondered whether anyone has done statistical analysis on the issue.

“It’s just idiotic,” he said. “It really is typical government — symbolism over substance.”