Propane developments, the good news and bad

The good news is a propane tax credit is available for lift truck users. The bad is that not many apply for it. The worse is that many aren’t using the right grade, anyway.

By Tom Andel, Editor in chief -- Modern Materials Handling, 8/20/2007

The emotions of lift truck fleet managers who run internal combustion engine models have been running hot and cold in response to recent trends affecting their vehicles. Represented on the cold side are those who have been coolly ignorant of a 50 cent-per-gallon tax credit available to them as users of an alternative fuel: propane.

Other managers, particularly on the West Coast, are hot and bothered about what the grades of propane they’ve been buying are doing to their lift trucks. For both sides, educational efforts are being devised to help normalize their temperatures.

The tax credit
The tax credit is a fuel use credit that went into effect in October 2006 and runs through September of 2009. The credit was originally intended for on-road vehicles, but was eventually extended to off-road (i.e., lift trucks). To claim the credit, you must register by filing IRS Form 637. Once approved, the IRS will issue a 637 number with “AL” at the end, indicating IRS authorization to file as an alternative fueler.

“Propane is such a standard fuel in lift trucks, people forget it is an alternative fuel,” explains Brian Feehan, managing director of the Propane Education & Research Council. “It decreases our dependence on foreign oil because 90% of our supply is derived from the U.S.”

Feehan says one of PERC’s roles is to help users achieve operational efficiencies, and to do so it has been involved in a number of fuel quality projects. This is where the hot end of the propane user spectrum is being felt. There are several grades of propane and consumer grades don’t work well in industrial applications. The result: lift trucks that don’t operate at full potential.

Customer complaints
Audie Burgan has heard his share of complaints from customers whose lift truck fleets are getting gummed up by poor propane formulations. He’s president of JM Equipment, dealers of Nissan and Jungheinrich lines in Fresno, Calif. He notes that California has a big population of agricultural users who buy heating oil propane and tend to use that in their lift trucks, too.

“We’ve had a heck of a time keeping their units running because the injectors were gumming up and the high heat these units were producing internally was breaking down the characteristics of propane,” he says. “The customers thought it was a problem with the lift trucks. The manufacturers said it’s because of dirty fuel. We asked some of the propane producers if there’s a higher quality fuel and they said yes but they don’t sell it in California.”

Grades of propane
HD5 is the grade of propane intended for internal combustion engine vehicles. The top lift truck suppliers recommend this grade for use in their products. It contains a minimum of 90% pure propane and a maximum of 5% propylene. However, Burgan says a fuel content analysis from Amerigas showed he wasn’t always buying HD5. After contacting LPG suppliers in Fresno to ask about this, five of the six said they didn’t sell HD5.

“We tell our customers they should buy HD5 propane and [if they don’t] they could void their warranty and any additional maintenance required will be their responsibility,” Burgan says. “Many of them continue to use what they’ve been putting in their tanks for the last 20 years. They may be paying less for the fuel but they’re paying more for the maintenance. In the meantime we’re converting a lot of propane users to electric trucks.”

Brian Feehan says PERC is developing mitigation strategies examining additives and alternative filtration systems, both in lift trucks and at the fuel source. And to ease the bite of that conversion Burgan says he’s doing more of, Feehan says PERC has been working with colleagues in Europe to develop a hybrid Prius that runs on propane and electricity. The next step will be to determine if the same hybrid principle can be applied cost-effectively in lift trucks.