Kwik Trip Natural Gas Debuts
Published in CSP Daily News
New installations, natural gas summit launch retailer into altfuel business
LA CROSSE, Wis. -- With natural-gas prices at a 10-year low, the timing for retailers who wish to offer compressed natural gas (CNG) and liquid natural gas (LNG) as transportation fuels seems perfect. And Kwik Trip Inc., La Crosse, Wis., intends to take the stage in a big way.
This Thursday, Kwik Trip, which operates more than 400 stores in Wisconsin, Minnesota and Iowa, is hosting its first ever Natural Gas Tradeshow & Summit. The highlight of the event--to be attended by local fleet operators and members of the media, among others--will be the official unveiling of Kwik Trip's alternate fuels station in La Crosse.
The site, which sells not only CNG and LNG but also E85, B5 and B10 biodiesel, and propane, will be the first of five that will sell natural gas fuels, including a location in Sturtevant, Wis., opening this month, and two additional sites in Oshkosh, Wis., and Rochester, Minn., this fall.
As Chad Hollett, director of transportation and distribution explained to CSP Daily News, the natural-gas industry "really sees c-store entities such as ourselves to being a key to making natural gas more mainstream, more of a standard fuel option than an alternative fuel option."
The alternative fuel station in LaCrosse cost $3 million to build--a high price tag, but largely influenced by the grand alternative-fuel offer at that site. For most retailers, the typical equipment outlay runs from roughly $500,000 to $1 million. While federal incentives for natural-gas infrastructure development have sunsetted, Kwik Trip was able to take advantage of a state grant for one of the five locations, which helped offset the investment.
When it comes to demand, retailers embarking on CNG and LNG are usually encouraged to find an anchor tenant for their fueling site, to provide a steady stream of income to support that fledgling business. Kwik Trip's own NGV fleet will serve as part of the anchor load at the LaCrosse sites.
Hollett told CSP Daily News that the chain has been considering the conversion of its own fleet to natural-gas vehicles (NGV) as well as a natural-gas retail offer for the past three years. This year, it took delivery of its first NGVs--a fleet of 20 compressed natural gas (CNG) and liquid natural gas (LNG)-powered vehicles, from small class one passenger vehicles and light-duty trucks up to semis, from a variety of original equipment manufacturers (OEMs). Even company founder and CEO Don Zietlow now drives a CNG-powered pickup truck.
"Right now, we've had unbelievable performance and results from our natural-gas vehicles," Hollett said. "It far exceeded expectations in every category, whether it be the performance of the engine, acceptance from the workforce--it's been tremendous."
For the other natural-gas Kwik Trip locations, the anchor fleets are yet to be determined. It was a conscious move on the retailer's part.
"Historically what's happened is a lot of people viewed natural gas as a proverbial chicken-and-egg situation," said Hollett, referring to the debate over whether alternative-fuel demand or supply should be established first. "And there's some accuracy to that. Unfortunately, when most people hear that, they think of something that doesn't have a solution. If we expand the natural-gas offerings, leverage that fleet piece of it, we think we can get adaptation and generate a critical mass of vehicles sooner.
"It's with the notion that to build a functional infrastructure is probably priority No. 1," said Hollett.
In addition to the grand opening of the alternative fuel site-which had a soft opening last month--the Natural Gas Tradeshow & Summit will feature the representatives from OEMs, local utilities and retail fueling-equipment manufacturers. This includes demonstrations of nearly 50 NGVs, from light-duty passenger cars to semi trucks.
"We really wanted to showcase that the infrastructure is here, it is functional, that the vehicles are here, the technology is here, and really highlight the performance we've seen," said Hollett. "We recognize that education and promotions are an important part of this."
It's also an effort to demonstrate that natural gas as a transportation fuel--and the c-store industry's role in its development--are ready for their closeup.
"If you look at Kwik Trip at what makes it unique right now, it's not only our network of stores and the ability to build a functional infrastructure, but then also to start to build a fleet element of it," said Hollett. "We can showcase that this does work."