Tuesday, July 3, 2012

Why in Times of Cheap Natural Gas is Hamilton Buying Diesel Buses?

The Spec has an article on the HSR buying new diesel buses, replacing natural gas buses. Considering the cheapness of natural gas (which looks to continue for years in North America) and the high cost of diesel fuel (based off the price of crude), I have to wonder why Hamilton is doing this. Obviously the HSR must have the infrastructure for natural gas if they already have natural gas buses.

The buses cost $450,000 without upgrades according to the article. Perhaps natural gas buses are more expensive or don't last as long. Who knows? Perhaps the cost of fuel isn't relevant compared to the cost of buses.

This site has an estimate of American buses of all types using an average of 1396 US gallons per year (of diesel I assume). I'm not sure if that's high or low for a HSR bus, but we'll go with it. That's approximately 5,284 litres per year. On Gas Buddy today, prices around Hamilton for diesel were around $1.13 per litre. Maybe the HSR gets a better price and maybe they don't have to pay all the taxes. Still using this number that's $5,970.92 a year or $71,651.04 over the 12 year bus lifetime. Is that enough to justify buying more expensive natural gas buses? I don't have the numbers, but it makes you wonder.

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