Oklahoma Turnpikes & CNG - fuel is cheaper than the toll!

[UPDATE: This article is also posted in the NewsOK Power Play blog.]

In 2010, the Oklahoma legislature passed Resolution 74-78f to encourage development of CNG refueling stations:

“It shall be the goal to have at least one public CNG fueling station located approximately every one hundred (100) miles along the entire interstate highway system in the state by the year 2015.  The goal shall increase to at least one public CNG fueling station approximately every fifty (50) miles by the year 2025.”

Now, a path to meeting that goal seems to be shaping up leveraging Oklahoma’s entrepreneurs and the Oklahoma Turnpike Authority (OTA).

OTA’s 5 year capital plan includes:

• Purchase of 35 CNG powered vehicles per year starting in 2013
• Toll Plaza remodels at Vinita on Will Rogers (2013), Walters on H.E Bailey (2014), Eufaula and Antlers on Indian Nation (2015), SH 99 on Cimarron (2016), and Stroud on Turner (2017)

The sole turnpike plaza that currently offers CNG refueling is the Stroud plaza on the Turner Turnpike and while that little ol’ Oklahoma Natural Gas station is useful when low on fuel, it is very tired and inadequate.

Love’s and OnCue have led the way in integrating CNG refueling into the convenience store.  Now the OTA has a great opportunity to serve its refueling needs as well as its paying customers by integrating CNG refueling into plaza remodels.

Benefits:

• Showcase the economics and feasibility of using Oklahoma’s natural gas for transportation to turnpike travelers. 
• Increase revenue for OTA through greater use of turnpikes. (Who minds paying tolls when you saving so much on fuel?)
• Increase high profit margin concessions for plaza concession operators.  Travelers in CNG vehicles will certainly refuel prior to exiting Oklahoma to the northeast (Vinita), south (Antlers), and southwest (Walters).  Coincidentally, those are next three toll plazas slated for remodeling. 

CNG is often called “green times 2”, or #greenX2 in Twitter-speak, due to its cheapness and its environment-saving credentials.  Now the Oklahoma Turnpike Authority has the ability to increase its revenue and reduce expenses by integrating CNG refueling into its planned toll plaza remodels.

Green boxes indicate upcoming OTA convenience plaza remodels.
Orange dots indicate existing CNG stations. (Map from cngnow.com)

Kum & Go + CNG in Tulsa = Increased store sales

OnCue and Love's have figured out what CNG can do for their convenience store sales.  OnCue has CNG dispensers at 13 stores; Love's has 12 locations and adding more.

Fortunately for Kum & Go, neither of these operators has stores in the Tulsa metro area.

But... Kum & Go's huge problem in Tulsa is QuikTrip.  My unscientific study determined that Kum & Go stores experience 25% or less of the store traffic that QuikTrip locations enjoy.

Kum & Go has a great opportunity to change this at a few of their Tulsa area stores by being the first to offer CNG refueling.  Unlike OKC, Tulsa does not yet have any CNG refueling at convenience stores.  CNG users in Tulsa can only refuel at standalone, unattended locations.  Except for the Apache CNG station at I-44 & Yale, all Tulsa CNG stations are not easily accessible from interstate highways.

Notice how the Kum & Go locations in South Tulsa match the lack of CNG refueling stations. (Green icons are existing CNG stations; Red icons are existing Kum & Go locations.)


View Tulsa CNG in a larger map


The best location for Kum & Go to experience an immediate boost in store sales is the location at Riverside Dr. and the Creek Turnpike.  This location has plenty of space for the CNG equipment installation, easy on/off access to the Creek Turnpike with a dedicated traffic signal for eastbound traffic. That section of Creek Turnpike is now the most highly traveled of all the Oklahoma Turnpikes (26,000 vehicles per day each way).  This Kum & Go location is easily viewed by travelers on Creek Turnpike and the tall price sign would catch a lot of attention with a $1.39 CNG price displayed.



This is just the first and most promising Kum & Go location for CNG dispensing.   More blog posts to follow with location analysis.  [UPDATE: The red stickpins in the Google Map above show the other promising Kum & Go locations - Hwy 75 & 81st St, 111th St & Memorial in Bixby, Lynn Lane & 71st St in Broken Arrow.]