PROPOSAL:

Execute Contract to Develop and Demonstrate
Optimized Design for Liquefied Natural Gas
Storage and Dispensing for Fleet Vehicle Applications

SYNOPSIS:

LNG is of interest to a growing number of truck fleets; however, storage and dispensing of cryogenic LNG for truck fleet applications has not been optimized. The development and demonstration of a standardized design of LNG dispensing stations is needed to minimize vapor loss, retain fuel composition over extended periods, and minimize construction, operation and maintenance costs. Based on the results of a competitive solicitation, Amoco Oil Company has been selected to develop and demonstrate a state-of-the art LNG refueling station. Total project cost for Amoco is $1,971,470, with AQMD cost sharing of $300,000.

COMMITTEE:

Technology, June 27, 1997, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute a contract with Amoco Oil Company in an amount not to exceed $300,000 to co-sponsor the development and demonstration of an optimized LNG dispensing station.

James M. Lents, Ph.D.
Executive Officer

Background

Over the last several years, interest has steadily grown in the use of LNG as a clean alternative fuel for heavy-duty truck applications. Among the advantages of LNG is its relatively high energy density per volume of fuel stored compared to compressed natural gas (CNG). Compared to diesel technology, both CNG and LNG provide significant reductions in emissions of NO_x and particulate when used in heavy-duty engines. However, the storage and dispensing of cryogenic LNG for truck fleet applications has not yet been optimized. For example, fuel vapors must be carefully managed to minimize the amount of boil-off, or fuel vapor loss, which can occur if fuel is stored for extended periods of time.

One of the key issues in the early implementation of LNG in truck fleet applications is to design and deploy convenient and cost-effective on-site fuel storage and dispensing systems for LNG. In storage, cryogenic liquids warm slowly, gradually increasing pressure as the liquid absorbs heat. The key to a successful LNG system is to control the saturation pressure of the liquid to minimize the boil-off of gases. For truck fleets that consume less than about 5,000 gallons per day of LNG, long storage intervals for LNG result in fuel vapor loss due to boil-off and, potentially, changes in fuel composition. To further enhance the utilization of LNG by large fleet truck operators, an improved design of LNG dispensing stations is needed.

On March 14, 1997, an RFP was approved by the Board to develop and demonstrate an optimized LNG refueling station. This RFP allocated $300,000 in AQMD funding for this project. This project focuses on the design and demonstration of optimized LNG refueling in a truck fleet application to provide a commercial-scale demonstration of convenient and cost-effective on-site fuel storage and dispensing systems for LNG.

The proposed project is included in the Technology Advancement Plan for the Clean Fuels Program, approved on October 11, 1996, as Project M-4-1, "LNG Fueling Facility Design Considerations." The expected benefit of this project is the proof of concept of more efficient and commercially viable LNG refueling technology which should help lead to the following:

• Reduce total systems cost of LNG refueling;

• Increase total system efficiency of LNG refueling through its integration with CNG refueling;

• Increase availability of LNG infrastructure to further encourage the utilization of LNG as a substitute for diesel in commercial truck fleets;

• Reduce NOx and particulate emissions by 50% and 90%, respectively, through the increased use of low-emission natural gas vehicles rather than their diesel-fueled counterparts.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting bids was published in the following publications: The Black Voice News, Chinese Daily News, Eastern Group Publications, El Chicano, The Excelsior, Inland Empire Hispanic News, Inland Valley Daily Bulletin, Korea Central Daily, La Opinion, La Voz, Los Angeles Sentinel, Los Angeles Times, M/W/DVBE Source, Orange County Register, Philippine News, Precinct Reporter, Rafu Shimpo, Riverside Press Enterprise, the San Bernardino Sun, and the State of California Contracts Register. Additionally, potential bidders were identified through Los Angeles County’s Directory of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Directory of Certified Firms published by the Los Angeles County Metropolitan Transportation Authority; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; the Caltrans electronic bulletin board listing of Disadvantaged and Women Business Enterprises; the AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Copies of the RFP were mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov] and on AQMD’s bidder’s 24-hour telephone message line.

Bid Evaluation

Three proposals were received by the May 27, 1997 closing date. They were reviewed and evaluated according to established AQMD guidelines. A summary of the panel's scoring is included as Attachment A. The evaluation process involved two steps. First, proposals were evaluated using technical criteria. Proposals receiving scores of at least 70 out of 100 points were considered technically qualified and eligible for contract award. Next, the technically qualified proposals were evaluated using the criteria of "cost, cost per technical approach and work statement, and other factors," as outlined in the RFP. Using this two-step selection process, the proposal from Amoco received the highest overall score.

Panel Composition

A four member RFP evaluation panel was comprised of Paul Wuebben, AQMD; Cindy Sullivan, AQMD; Dan Fong, California Eneregy Commission; and Alissa Oppenheimer, Gas Research Institute. The ethnic and gender composition of the panel is two males/two females; three Caucasian and one Asian-American.

Proposition 209 Compliance

It is AQMD policy to award additional points or cost benefits for minority-owned, woman-owned, and/or disabled veteran-owned business enterprises. On November 5, 1996 California voters approved Proposition 209 which prohibits discrimination or granting preferential treatment based upon race, ethnicity, color, sex or national origin in the operation of public employment, public education, or public contracting. (Proposition 209 does not address disabled veteran-owned business enterprises.) On December 16, 1996, the Federal District Court issued an order applicable to all government agencies in California prohibiting enforcement of Proposition 209. The December 16, 1996 court order has been reversed by an appellate panel; however, a motion for rehearing has been filed and the stay continues in effect. Therefore, the AQMD’s existing policy remains in effect. Should the status of the law change at any point during the process of issuing an RFP or RFQ or entering into a contract pursuant to a previously issued RFP or RFQ, the AQMD will abide by the law in effect at the time the action is taken and any RFP or RFQ will be deemed modified to comply with existing law and any provisions in conflict with existing law will not be enforced.

Proposal

Amoco’s proposal adheres to all the tasks described in the RFP's work statement, and it is particularly strong in its technical approach compared to the other proposals. Amoco has assembled a strong team, with direct cost-sharing provided by Amoco, United Parcel Service and MVE, Inc.

There are several key innovative approaches incorporated in the proposed project by Amoco. The proposed system will be designed to provide for modular refueling for fleet vehicles operating on LNG or on CNG. The system will consist of a 15,000 gallon bulk storage tank to allow for full trailer loads of LNG. This system will be an optimized version of the state-of-the-art Quick Response Station (QRS™) system developed by MVE and Amoco. It will also be cheaper than the 6,000 gallon tank currently incorporated in QRS™ systems.

Amoco proposes to upgrade current QRS™ technology and incorporate their state-of-the-art "Value Fill Station" system. A unique two-stage LNG submersible pump will provide significantly greater differential pressure for easier filling and which reduces the need to vent the station storage tank before starting to fill from a trailer which may not be equipped with an off-loading pump. Also, by submerging the cryogenic pump, the proposed system eliminates the shortcomings of earlier station design, as vapor losses normally attributed to pump cool down will be eliminated. The station will also provide for immediate and rapid response to unplanned refueling needs, since no time will be required to prime or cool the pump after prolonged periods of non-use. The refueling rate will provide for 40 gallons per minute, using the two stage pump.

Amoco will act as the prime contractor for this project, and be responsible for LNG fuel distribution, as well as for overall project management. As the LNG fuel supplier for this project, Amoco is the only company in the U.S. that has operations and expertise in all phases of LNG, including gas reserves, exploration, production, LNG processing, transportation, marketing, sales, and technical services to support a nationwide commercial and industrial LNG industry. Amoco’s project team includes MVE, Inc., a cryogenic tank manufacturer and LNG equipment supplier, and Northstar, Inc., as on-site manager for installation and long-term service. In partnership with Amoco, MVE, Inc. has installed the greatest number of LNG stations in the United States. Northstar has installed LNG and L/CNG stations for a wide variety of truck fleets, including Perrier Water/Arrowhead in Ontario, Union Pacific Railroad in Commerce, California, Santa Fe Railroad, Vernon, California, Sun Metro in El Paso, Texas and Taormina Industries in Anaheim, California.

United Parcel Services (UPS) will serve as the station owner and demonstration fleet operator. As part of the proposed project, UPS plans to operate 99 package delivery vehicles during a one-year demonstration at the new UPS fleet center located on Main Street in Los Angeles. From the first day of station operation, 1,100 gallons of LNG per day, five days per week are expected to be used, thus demonstrating the commercial viability of the system on a large-scale basis. The station will remain open and accessible 24 hours per day, 7 days per week through access by a card-lock system.

This partnership will provide significant confidence to other fleets that LNG can be utilized safely, efficiently, and on a cost-competitive commercial basis in the retail trucking market. The combined expertise of this team was considered as a significant factor in the comparative review by the review panel. Significant cost sharing was also provided by these partners, together with an expeditious schedule for implementing the project.

Resource Impacts

Total AQMD cost for the proposed project is $300,000. Sufficient funds are available in the FY 1997-98 Budget. A total of $1,671,470 in direct cost-sharing is planned for this project. The expected sponsorship for this project includes:

A- Summary of Evaluation of three Proposals Received in Response to RFP # 9697-41.

Attachment A

Summary of Evaluation of Responses to RFP #9697-41

Three proposals were received in response to this RFP: Amoco Oil Company, Foothill Transit, and Quantum Dynamics. The proposal from Quantum Dynamics did not meet the minimum technical requirements of the RFP, as it did not propose a demonstration host site at all. Hence, this proposal was deemed unresponsive by all reviewers.

Step 1 - Technical Criteria (70 points minimum, 100 points maximum)

	Proposer
	Amoco Oil Co.	Foothill Transit	Quantum Dynamics, Inc.
Panel Average	93.25	70.25	0
Carry-over (50% of points > 70)	11.625	0.125

Step 2 - Cost and Other Factors (85 points maximum)

Criteria	Proposer
	Amoco	Foothill
Cost (Maximum = 20 points for lowest cost) (Actual amount)	14	20
Cost per Technical Innovation & Commercialization Potential (Maximum = 40)	40	36
Co-funding/Matching funds (Maximum = 10)	7	10
Certified MBE/WBE/DVBE (Maximum = 10) OR Minimum of 20% Participation by MBE/WBE/DVBE Subcontractors (Maximum = 7)	0	0
Local Business Enterprise (Maximum = 5)	5	5
Total	66	71

Total Score (100 points maximum)

Criteria	Proposer
	Amoco	Foothill
Step 1 Carry-over Points (Maximum = 15)	11.625	0.125
Step 2 Points (Maximum = 85)	66	71
Total	77.625	71.125

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