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PROPOSAL:

Execute Contract to Cost-Share Development and Demonstration of Advanced Fast-fill Natural Gas Compressor to Refuel Natural Gas Vehicles

SYNOPSIS:

A major barrier to the market penetration of NGVs is the high cost faced by public and private fleets to purchase, install and operate NGV refueling stations. OceanAir Environmental has proposed to develop and demonstrate an advanced, fast-fill natural gas compressor with potentially lower capital and operating costs than conventional compressors. The proposed advanced compressor refueling station will refuel NGVs owned and operated by the other participants in the project, namely the cities of Calabasas, Malibu, Agoura, Westlake and Hidden Hills. Total cost of this project is $592,000. The proposed AQMD cost-share is $200,000.

COMMITTEE:

Technology, February 26 1999, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Chairman to execute a contract with OceanAir Environmental to develop and demonstrate an advanced natural gas compressor to be integrated into an NGV refueling station, in an amount not to exceed $200,000.

Barry Wallerstein, D.Env.
Executive Officer

Background

The AQMP identifies the use of alternative clean fuels in mobile sources as a key attainment strategy. The ARB has also passed LEV regulations that require light- and medium-duty vehicles to comply with increasingly stringent emission standards.

Alternative fuel vehicles, such as NGVs, have demonstrated significantly lower VOC, NOx, CO and toxic emissions than gasoline vehicles. A major barrier to the entry and acceptance of NGVs, however, is the high cost of purchasing, installing, and operating NGV refueling stations. Contributing substantially to this high cost is the natural gas compressor that forms an integral part of every NGV refueling station.

Proposal

The objective of the proposed project is to develop and demonstrate both the technical and economical feasibility of an NGV refueling station based on an advanced hydraulic compressor technology. This hydraulic NGV compressor station, if successful, has the potential to reduce the capital and operating costs of such stations.

The proposed project is expected to include the following:

• Design and fabrication of two advanced hydraulic compressors of size 125 scfm;
• Integration of these into a fully-equipped NGV station that will include CNG storage tanks, priority sequencing panel, fast-fill dispensers with breakaway hoses, electric motor, and safety system interlocks including methane gas detectors and emergency shutdown mechanisms;
• Identification by the five participating cities of a location for installation of the proposed NGV refueling station, most likely in the city of Calabasas near the 101 Freeway;
• Installation of the refueling station at the identified site including acquisition of the necessary permits and overseeing the installation to ensure compliance with existing codes and standards;
• Startup testing of installed equipment to verify initial performance and safety mechanisms;
• Initiation of NGV refueling operations for the five cities participating in the project (vehicles that include several light-duty vehicles, school buses and private garbage trucks); and
• Compile, analyze and summarize data on compressor performance, including fuel throughput, maintenance costs, fuel costs, electricity consumption, durability, etc.

Expected advantages inherent to this advanced hydraulic compressor include:

• Slow operating speed which maintains a low compressed gas outlet temperature, thereby reducing the need for gas cooling equipment as in conventional compressors (Though the rotating speed of the hydraulic compressor is slow, the final refueling occurs at fast-filled rate.);
• Reduced potential for vapor phase oil carryover from the compression unit, downstream into NGVs while refueling, a problem in many conventional compressors;
• Reduced noise levels which will cut down the enclosure needed to alleviate such noise, usually a serious concern with conventional compressors;
• Smaller footprint, lower weight and minimal foundation requirements than conventional compressors; and
• Reduced operating speed that would potentially reduce maintenance-related problems associated with high speed rotating conventional compressors.

Benefits to AQMD

The proposed project is included in the November 1998 update of the Technology Advancement Plan under Project 98M4-1 "Development of Advanced Natural Gas Compressors for Refueling Stations". The AQMP relies on the expedited implementation of advanced technologies and clean–burning fuels in Southern California to achieve air quality standards. If the proposed project succeeds, the direct benefits from this project will accrue to the five cities participating in the project. The compressor will be able to refuel light- and medium-duty NGVs, including school buses operated by these cities, and privately-run garbage trucks. Switching from 10 diesel-powered school buses and 10 diesel-powered garbage trucks to all NGVs will bring 71 tons of NOx emission reductions over the life of the vehicles.

On a larger scale, if this technology succeeds, the new advanced compressor will provide a lower cost alternative to conventional compressors. This, in turn, will make NGV refueling stations, particularly fast-fill stations, more affordable and thereby facilitate the introduction of low emission, alternatively fueled vehicles. This will occur initially in private and public fleets and, later, to consumers at large. Such penetration of NGVs will provide direct emissions reductions of NOx, VOC, CO, PM, and toxics throughout the Basin.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for a sole source award is made under provisions B.2.c.(2): the projects involves the use of proprietary technology; B.2.c.(3) the contractor has ownership of key assets required for project performance; and B.2.d.(1) other circumstances, including projects involving cost-sharing by multiple sponsors. It is in the best interest of the AQMD to cosponsor the proposed project, whose participants include OceanAir Environmental and five cities bordering the western boundary of AQMD: Agoura, Calabasas, Hidden Hills, Malibu, and Westlake.

OceanAir Environmental, "OceanAir," based in Ventura, CA is the principal proponent of this project. Mr. John O’Green, the principal inventor of the proposed compressor, was recently granted 62 patents on this technology and has licensed OceanAir for exclusive marketing of this technology under the OceanAir brand name. Thus, the key asset that OceanAir owns is the acquisition of these exclusive marketing rights, which in turn provides OceanAir the exclusive access to proprietary knowledge owned by Mr. John O’Green.

The cities of Agoura, Calabasas, Hidden Hills, Malibu, and Westlake, five cities that cover a fairly large area in the western section of AQMD, expect to refuel several NG vehicles at the proposed advanced NGV compressor refueling station. The anticipated NGVs which the cities either currently own or plan to purchase in the near future include 35 CNG light-duty vehicles, 5 passenger vans, 10 school buses, 5 street sweepers and 10 privately operated garbage trucks.

As listed below, OceanAir is cost-sharing over 40% of the equipment and installation cost for this proposed project, and about one-third of the project cost over three years. The five cities participating in this proposed project intend to contribute approximately $35,000 in cash to purchase and install the new NGV refueling station, and approximately $177,000 in fuel costs over a three-year period.

Resources Impacts

The total amount of AQMD funding for the proposed project will not exceed $200,000. The table below describes the proposed funding to complete the project:

* Agoura, Calabasas, Hidden Hills, Malibu, and Westlake,

Sufficient funds are available in the FY 1998-99 Budget from revenues received from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile and stationary sources to support projects to increase the utilization of clean fuels in both sectors, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program. This project is a proper use of these funds because the proposed technology, if successful, will facilitate the greater use of clean-burning natural gas vehicles in the Basin.

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