BARSTOW • City officials are hoping that the hiring of a new marketing firm will help the Barstow compressed natural gas fueling station turn a profit, but the station has been operating at an average loss of $92,816 a year since opening in 2006.
The plant was built by the city in 2005 using a grant from the Mojave Desert Air Quality Management District. The plant is part of the Interstate Clean Transportation Corridor, a nationwide effort to get diesel-burning tractor trailers to switch to liquefied and compressed natural gas.
The City Council voted unanimously in November to hire Applied LNG Technologies as its consultant for the fueling station, in part because the firm offered to improve advertising and signs for the station, which has not seen a profit since it opened. The consultant will also provide all of the fuel and maintenance for the station.
"We have to advertise more so that people know it's there," said Councilman Willie Hailey on Monday. "We're just hoping to break even. Hopefully [Applied LNG Technologies] will be able to do that."
The city currently spends the largest portion of its money at the CNG station on fuel — for both the fuel that is purchased by the city and for liquefied fuel that must be vented out if isn't sold fast enough. Under the new agreement with Applied LNG Technologies, the city only has to pay for the fuel it actually uses for the first three years, and will be paying wholesale price for up to 100,000 gallons of fuel. The city used about 30,000 gallons of fuel last year.
After the first three years of the contract with Applied LNG Technologies, the city will be eligible to receive royalties for the amount of gallons of natural gas sold if the station is able to sell more than 250,000 gallons than what it actually uses. Numbers released by the city show that it sold about 52,000 gallons of compressed natural gas last year to sources other than the city, which is only about a fifth of what it would need in order to receive royalties.
The city currently receives nearly half of its revenue from Burrtec and Barstow Area Transit and the other half of its revenue from other sources, according to figures from the finance department. The city does not keep track of who purchases its fuel other than the contracts it has with Burrtec and Mojave Valley Transportation — which runs Barstow Area Transit — but it has been assumed that much of the revenue comes from travelers and truckers using Interstate 15.
The city hopes to lure more travelers and truckers into using Barstow for fueling up on liquefied and compressed natural gas. Along with marketing the facility to owners of personal vehicles, the firm was also discussing the building of a natural gas fueling facility in Las Vegas in order to complete the transportation corridor along Interstate 15, said Scott Johns, regional sales manager from Fleet Star Inc., at a City Council meeting in November.
Trucking companies currently switch from their natural gas vehicles to diesel vehicles when traveling from ports in the Los Angeles area to Las Vegas. The firm hopes that the addition of another station would allow more companies to use the same trucks from the ports to Las Vegas.
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Barstow's compressed natural gas facility revenue
2010: Loss of $132,564.74
2009: Loss of $110,372.26
2008: Loss of $136,934.75
2007: Loss of $56,935.50
2006: Loss of $27,273.50
Source: Barstow's finance department