Changing Our Fuels to Change Our Future:How One Grant Transformed Chicago’s Transportation Landscape

In 2010, the City of Chicago and Gas Technology Institute (GTI), a leading research, development, and training organization serving global energy and environmental markets, received a U.S. Department of Energy (DOE) Clean Cities grant of $15 million through the American Recovery and Reinvestment Act (ARRA). Through the efforts of the Chicago Area Clean Cities (CACC) Coalition, the funds launched a new initiative, Clean Fuels Across Chicago

This is the story of how that original $15 million in federal funding served as leverage for $24 million in investments by Clean Fuels Across Chicago project partners—and how those funds spurred a series of additional private investments and initiatives that resulted in the deployment of hundreds of new green vehicles and alternative fuel and electric charging stations throughout the Chicago metropolitan area.

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It all started with a federal grant of $15 million in 2010, which launched Clean Fuels Across Chicago, a new Chicago Area Clean Cities (CACC) Coalition initiative designed to jump-start the deployment of clean vehicles and alternative fueling stations—including compressed natural gas (CNG), electric vehicle supply equipment (EVSE), ethanol (E85), and propane—throughout the Chicago area.

Environmental

Decreased harmful emissions equivalent to removing

passenger vehicles from the road

gallons of gasoline

3,750EconomicAdvantages

EnergySecuritymillion

saved7.5 in fuel savings

million$8

Virtually overnight, it seemed, Chicago’s transportation landscape was transformed by the addition of green vehicles and fueling stations that helped to promote energy security, reduce transportation costs, and clean the air:

• Over 400 clean vehicles and over 225 alternative fueling stations were deployed

• Over 7.5 million gallons of gasoline were displaced with domestically produced fuels or reductions in fuel use

• The emissions reductions from using clean fuels were equivalent to removing 3,750 cars from the road

• The clean fuels, such as CNG and electricity, and hybrid vehicles saved local fleets $8 million in fuel costs

• The $39 million ($15 million in federal funds and $24 million in project partner funds) in project funds fueled additional investments by local companies totaling over $15 million.

“Thanks in large part to the work of the members of the Chicago Area Clean Cities Coalition, the City of Chicago is now playing a leading role in the country’s efforts to promote the use of alternative fuel vehicles. By providing consumers and fleet operators with incentives and information, we’re seeing significant growth in the number of alternative fuel vehicles and fueling stations in our region—growth that promises tocontinue in the decades to come.”—Rahm Emanuel, Mayor, City of Chicago

These are just some of the events that ensued

following receipt of the

federal funding. “Clean Fuels Across Chicago has been a game changer in the Chicago area in terms of our ability to get fleets to use alternative fuel vehicles,” says Samantha Bingham, an environmental policy analyst with the City of Chicago, who also serves as coordinator for CACC.

“The federal funding launched a series of local investments in clean fuels by private organizations unlike any in the City’s history,” says Ted Barnes, program manager at GTI. “When you consider the results that the city has seen over the past few years, it’s amazing.”

CACC and Clean Fuels Across Chicago

One of nearly 100 Clean Cities coalitions across the country, CACC was one of the first to receive Clean Cities designation from the U.S. DOE in 1994. Today, CACC members come from all walks of life—government, business, education, research, fuel providers, utilities, and environmental organizations.

“CACC is more focused on deploying technologies, encouraging policy changes, and changing fleet’s driving behaviors than on mode shift (encouraging people to take public transportation, for example),” says Bingham.

That focus is paying off. “Over the last three years, we have seen significant adoption of alternative fuel vehicles by large local fleets,” Bingham continues. “We estimate that those moves have resulted in a greater proportion of petroleum displacement than that achieved by the entire fleets of CACC members over the past 16 years. That’s how significant those recent

investments in alternative fuel vehicles have been to the City.”

Yet, until now, CACC has not received the credit it deserves for encouraging the use of clean fuels and clean vehicle technologies in the Chicago metropolitan area. “We’re the best-kept secret in Chicago,” Bingham continues. “People are seeing these alternative fuel vehicles around the city, but they may not be aware of the scope of what’s happening.”

It’s time.

Before the launch of the Clean Fuels Across Chicago project, there were only a handful of local fleets using natural gas and propane. In fact, before the City received the Clean Cities grant, there was only one public CNG fueling station in the entire state of Illinois and now there are more than ten.

Beginning in 2010, with the assistance of program partner GTI and additional private investments from sub-awardees, CACC launched more than a dozen ambitious projects in the Chicago area.

The public-private partnerships included large, private businesses, municipalities, non-profits, and small businesses. Project partners included:

• ComEd

• Chicago Area Electric Vehicle Charging Station Project

• City of Chicago—Department of Fleet and Facility Management

• Clean Energy

• Doreen’s Pizza

• DuPage County—Division of Transportation

• Forest Preserve District of DuPage County

• Exel-Diageo

• Foodliner

• Gas Technology Institute

• GO Airport Express

• Green Taxi Program

• Groot Industries

• I-GO Car Sharing

• Ozinga Brothers

• Peoples Gas

• SCR Medical Transportation

• Village of Downers Grove

• Waste Management

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Planting the Seed

In the ensuing months after receipt of the initial government funds, business and government leaders realized the economic and environmental benefits of alternative fuel vehicles and made historical incremental investments in vehicles and fueling stations. In fact, private investments made by local organizations totaled $39 million—more than two times that of the initial $15 million in grant funding.

For example, Chicagoland businesses integrated alternative fuel vehicles into their fleets in record numbers. More than 200 additional CNG taxis (and more than 2,000 additional hybrid taxis) were deployed by taxicab companies in the Chicago area. Moreover, AT&T added more than 100 CNG vehicles to its local fleets. Waste Management, Groot Industries, and other local refuse fleets also deployed more

than 150 additional CNG waste haulers in the months following the grant.

Many of the original grantee organizations also made significant contributions to the local alternative fueling infrastructure. Waste Management deployed one public access CNG fueling station, while four other local refuse companies deployed three more CNG fueling stations.

In addition to launching four CNG fueling stations to serve its growing fleet of CNG cement mixers, Ozinga, a local producer of ready-mix concrete, launched Ozinga Energy, a new organization dedicated to assisting other local organizations in their efforts to implement an alternative fuel strategy. The City of Chicago also played an important role, by providing incentives for implementing new alternative fuel taxis and

releasing a solicitation for a green fueling station at O’Hare Airport. The State of Illinois got in the act, too, by providing funds for the deployment of electric vehicle charging stations.

As news spread about the incremental growth in demand for alternative fuel vehicles in the region, a major U.S. auto manufacturer moved up the Illinois launch of its new electric vehicle by an entire year.

And the word continues to spread. Since the original grant, many other local companies, including Peapod, Turano Bakery and Abt Electronics, are integrating alternative fuel use into their fleet operations. Other startups—including World CNG, Advanced V-Tech, and JNS Power and Control Systems, are now serving the growing alternative fuel market in the Chicago area. And it all started with a single federal grant.

A Concrete Commitment to CNG

Ozinga Brothers, a Chicago-area

producer of ready-mix concrete and

materials, used its federal funding to

purchase 14 CNG cement mixers. “We had been thinking about making the switch to CNG for several months,” says Tim Ozinga, the company’s director of communications. “We had been field testing and taking our time with the new technology. When we heard the funding was

available, we were able to adopt it much more quickly.”

Since that initial purchase, Ozinga has seen great successes with CNG trucks. “We’ve built our fleet up to more than 112 CNG concrete mixers,” says Ozinga. “Our long-term goal is to have our entire fleet transition to CNG by 2020. That totals about 500 mixers and support vehicles.”

In reality, that original grant funding opened the floodgates at Ozinga and served as a catalyst for an aggressive program of fueling station deployments throughout the region. “Once we received the funding, it made a lot of sense

for us to scale up our operation,” Ozinga says. “We started looking into building our own fueling station where the original 14 trucks were located.”

That station, opened in the summer of 2012, now serves the fueling needs of Ozinga’s fleet, as well as a number of other local fleets. “We’re getting interest from other companies in the area, as well as some taxi fleets.”

Since the deployment of its first station, Ozinga has been working to deploy additional CNG fueling infrastructure throughout the region. A second station opened in Mokena, Illinois, and a third station in Gary, Indiana—both of which are open to the public. Ozinga also plans to open a public station near O’Hare Airport in Des Plaines, Illinois, in the very near future.

In the Spring of 2013, Ozinga took its commitment to the region’s CNG fueling infrastructure to the next level with the launch of Ozinga Energy, a new and separate business entity dedicated to supporting the company’s four Chicagoland CNG fueling stations and to providing design, engineering, and build services to local businesses interested in deploying fuel stations for powering their own truck fleets with CNG.

A Regional Fleet Expands

Foodliner, Inc., is a national carrier of bulk food grade products with a nationwide fleet of approximately 1,900 trailers. The company’s fleet of 42 vehicles at the Franklin Park, Illinois, facility makes daily deliveries to Coca-Cola in Milwaukee, Wisconsin, and two bottling plants in the Chicago area.

For many years, the company had been looking at natural gas for the potential savings it offers. Yet, it wrestled with the economics. Would the fuel cost savings offset the additional cost of the technology? “We had been considering making the move to CNG vehicles,” says Kyle Neumann, Foodliner’s director of maintenance. “The grant spurred us to think seriously about it.”

Foodliner received $100,000 in Clean Fuels Across Chicago funding toward the purchase of six dedicated CNG Class 8 Freightliner trucks equipped with a heavy-duty natural gas engine. The cost share for Foodliner was $550,000. The company took delivery of the new trucks in January 2010. According to Al Brillhart, vice president of sales and marketing, the range of the original fuel tanks was limited to about 125 to 155 miles only and refueling was done at the fast-fill, public-access CNG fueling station located at GTI in Des Plaines, Illinois. “The infrastructure has changed dramatically since then and continues to evolve.”

Foodliner is planning to purchase additional trucks in 2014 and is considering two options: CNG or dual-fuel vehicles that run on a mixture of CNG and diesel.

Refuse Companies Add CNG Vehicles

In addition to delivery companies like Foodliner, refuse companies are looking to natural gas vehicles (NGVs) for the many benefits they offer. “Prior to Clean Fuels Across Chicago, the refuse industry in the Chicago area was not using CNG trucks,” says Bingham. “Thanks to the grant funding, they tested them and loved them. They realized the quick payback the vehicles offered in fuel savings.”

In addition to fuel cost savings, and CNG trucks run much quieter and cleaner than diesel vehicles. The refuse industry as a whole has been a leader in moving to CNG trucks and creating a market, partly because many communities are stipulating the use of environmentally friendly vehicles in their hauling contracts.

Waste Management (WM), a company that provides solid waste, recycling, and yard waste collection services for much of the Chicago area, used $1.5 million in funding to purchase 15 CNG waste haulers and to build its first local CNG station.

Since then, the company has significantly increased its CNG fleet to over 100 trucks and deployed a second public CNG fueling station at its facility in Stickney, Illinois. Today, WM operates more than 3,000 alternatively fueled vehicles with the largest fleet of natural gas collection trucks in North America. In fact, the company says 80 percent of the trucks it purchases during the next five years will be fueled by natural gas. By 2017, the company expects to burn more natural gas than diesel.1

1 http://online.wsj.com/news/articles/SB10001424052702304707604577422192910235090

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Groot Industries is another refuse company that serves customers in Chicago. With $1.3 million in Clean Fuels Across Chicago funding and a cost share of $5 million, the company converted 20 heavy-duty trucks to CNG engines and built fueling infrastructure. In October 2009, Groot was the first organization in the area to install a CNG fueling station for its refuse fleet use at its Elk Grove Village, Illinois, facility. Today, 40 trucks operating from that location run on CNG. In 2011, a second station was installed at the company’s Round Lake Park facility that operates an additional 10 CNG trucks.

Green Taxi Program Grows the City’s Taxi CNG Fleets

The City set aside $1 million for a Green

Taxi Program, in which the City took applications from taxi owners interested in

receiving up to $2,000 for a new

hybrid vehicle or the full incremental

cost of converting existing vehicles to run on an alternative fuel, typcially around $10,000. The city funded 50 hybrid electric-gasoline taxis and approximately 70 CNG taxis, including Clean Energy’s partnership with Yellow Cab for 80 CNG vehicles—a total of about 150 CNG taxis.

The Green Taxi Program was implemented in 2011 and provided the city with an opportunity to

reach an important goal—to increase the number of hybrid and alternative fuel vehicles operating in this high fuel-use industry. Since some taxis travel over 100,000 miles a year, each one can have the environmental impact of up to 10 passenger cars.

Prior to the Green Taxi Program, there were fewer than 500 green taxis in the Chicago area. Today, more than 3,000 hybrid or alternative fuel vehicles serve as Chicago taxicabs, or 44 percent of the entire taxi fleet. The addition of these vehicles has improved the city’s air quality by reducing greenhouse gas emissions and petroleum usage.

Expansion of the Alternative Fueling Infrastructure

Clean Energy, a provider of natural gas fuel for transportation founded by T. Boone Pickens, didn’t have a presence in the Chicago market until May 2011, when the company opened its first two CNG fueling stations in downtown Chicago using funding from the Clean Fuels Across Chicago project. “With GTI’s cooperation, we placed a Clean Energy dispenser at the GTI fueling station in Des Plaines, which gave us a critical presence near O’Hare Airport and a third fueling site.” says Cory White, Clean Energy’s Midwest marketing manager for airports and shuttles.

Clean Energy, in partnership with Yellow Cab, received $1 million in funding for fueling stations and Yellow Cab received $900,000 while the companies provided over $2.5 million in cost share. “We went in together in order to foster deployment of vehicles and stations and to solve the ‘chicken or egg’ dilemma,” says Lacy Buckingham, grant manager, Clean Energy. “Our goal was not only to establish ourselves within the Chicago market and to fuel vehicles for Yellow Cab, but also to create general public access stations for fleets and consumers of all sizes and types,” Buckingham continues, “

In 2011, when the first two stations were installed, they were sized to accommodate approximately 100 taxis. In the same year, when the city implemented its Green Taxi Program, the number of taxis using the stations increased significantly. “Vehicles were coming in and out of the stations like crazy,” says Bingham. “It was like a ‘build it and they will come’ scenario.”

In addition, when AT&T and other fleet operators added several CNG vehicles to their fleets, Clean Energy invested an additional $500,000 to install a second compressor at the station at 1121 S. Jefferson Street to provide additional capacity. “GTI, Peoples Gas, Waste Management, and Ozinga also helped to address the surge in volume by opening new CNG stations,” says White.

Meeting New Demand for Electric Vehicles

In 2010, there were fewer than two dozen electric charging stations in the Chicago area. As a result, many electric vehicle

manufacturers did not consider the Chicago market to be viable for their products. “We were not seen as a big supporter of the electric vehicle ecosystem at that time because of the lack of charging stations in the area,” says Bingham.

That same year, the City began a search for a company willing to install, own, and operate an electric charging network. In February 2011, the city announced that it had found an operator with a robust plan to install 280 electric vehicle and 73 fast-charging stations. “The DC Fast Chargers were new technology at the time that would be capable of charging a vehicle like a Nissan Leaf from zero to full in 20 minutes,” says Bingham. “These stations offered the potential to help reduce range anxiety among electric vehicle drivers by extending the range that they can travel.”

As a result of that infrastructure commitment, which was greater than plans for the entire state of California, Nissan made the decision to move up sales of the Nissan Leaf electric car in the Chicago region by a full year. In that same year, Ford Motor Company announced that Chicago would be a first choice for its line of electric vehicles.

Meeting Chicago’s Climate Action Goals

The ultimate goal of the grant was to displace petroleum use in order to reduce vehicle emissions and improve air quality. The hope was that, by increasing the supply and use of alternative fuels, the project would help the City reach its Chicago Climate Action Plan (CCAP) goals.

CCAP is the climate change mitigation and adaptation strategy adopted by the City in 2008. CCAP’s overarching goal is to reduce Chicago’s greenhouse gas emissions by 80 percent (below 1990 levels) by 2050. The more immediate goal is to reduce those levels by 25 percent by 2020. Alternative fuels and advanced vehicle technologies will play a critical role in helping the City achieve those goals. In fact, CCAP calls for a 10 percent increase in the use of alternative fuels in Chicago by 2020. Sustainable Chicago 2015, the City’s near-term sustainability guide, identifies specific goals and key actions that align with the CCAP.

Since the original funding was received by all project partners, the City of Chicago has seen dramatic changes in its transportation landscape.

• Deployment of more than 400 clean vehicles—displacing more than one million gallons of petroleum each year

• Installation of more than 225 alternative fueling stations and electric charging stations—displacing more than 3 million gallons of petroleum each year.

“The original $15 million in federal funds—supplemented by more than $24 million in project partner funds—fueled additional investments by local companies totaling more than $15 million,” says Ted Barnes. According to Barnes, the emissions reductions achieved from the use of clean fuels was equivalent to removing 3,750 cars from the road, while the use of clean fuels and hybrid vehicles saved local fleets $8 million in fuel costs already.

Just the Beginning

Clearly, Clean Fuels Across Chicago changed the transportation landscape in and around the City of Chicago. “Before the project was launched, there were only a handful of fleets that used natural gas and propane and that number was dwindling,” says Bingham. “Some fleets had their own fueling stations, but they were in disrepair. And there was only one public natural gas fueling station in the entire state.”

According to Bingham, the importance of the federal funding in launching private investment cannot be overstated. “Often, private fleet owners are reluctant to take the first step in investing in new green technologies,” she says. “Once we were able to get the initial set of vehicles and stations in place with Clean Fuels Across Chicago funding, unexpected things started to happen,” Bingham continues.

“New policies were implemented by the city and others and new vehicles and infrastructure were deployed without additional government funding.”

Private fleet owners in the Chicago area—as well as any local organization interested in advancing the adoption of green transportation—are encouraged to learn more about the CACC and its members. For more information, visit www.chicagocleancities.org.

This material is based upon work supported by the Department of Energy under Award Number DE-EE0002541.

This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.