NG Advantage to make natural gas available across Vermont
by Timothy McQuiston, Vermont Business Magazine Someone asked what the "NG" in NG Advantage meant: natural gas. Founder Tom Evslin said Wednesday that he has an ambitious goal for his new energy distribution company.
"By the end of 2013, we hope to be Vermont Gas' biggest customer."
This is an especially confident stand to take, considering the Milton firm will not make any deliveries of its product until January or February of 2013. It is now just in the process of site work at its location in the Catamount Industrial Park.
The company already has more than $20 million in signed contracts for trucked natural gas from industrial users in the region. Announced customers include Putney Paper and Pike Industries.
NG CEO Neale Lunderville was the master of ceremonies for the ceremonial groundbreaking, held during a driving drizzle. This did not dampen the enthusiasm for the project or even the comedy of watching Governors Jim Douglas and Peter Shumlin manning dump trucks and unloading stone onto the site.
Evslin and Lunderville met while working in the Douglas Administration. Evslin volunteered his entrepreneurial skills while Lunderville initially worked for Douglas while he was still treasurer, helped him get elected, and then held several important posts during Douglas' eight years as governor. Lunderville went on to work at Green Mountain Power and came back to state government to work for Shumlin and lead the state's recovery effort following Tropical Storm Irene last year.
Evslin, meanwhile, came up with the idea of finding a way to reduce Vermont's reliance on oil. Most Vermonters rely on oil to heat their homes because the natural gas lines serve a relatively small percentage of the state. Commercial and industrial customers across the state also rely on oil or other non-natural gas sources, like propane, for heat and power.
What Evslin came up with was taking natural gas from the Vermont Gas pipeline, which runs right in front of the Milton site, compress it to liquefy it, and truck it to industrial-scale customers. Even with the trucking costs, Evslin estimates that customers will save 20-40 percent on their fuel bill while using a cleaner product; it will reduce their CO2 emissions by 26 percent and virtually eliminate harmful pollutants like sulfur dioxide and nitrous oxides.
“Oil and propane cost and price volatility, as well as the possibility of supply disruption, are growing concerns to area employers. NG Advantage offers northern New England and upstate New York businesses a more affordable and stable alternative,” said Lunderville.
Picking up on that, Governor Shumlin said that not only is natural gas cleaner and cheaper, it is not coming from an unfriendly foreign nation.
Shumlin has another connection to the project; the first customer is Putney Paper in the governor's home town. He said that having a cheaper source of energy will help the paper company stay and thrive in the small, Windham County town.
"Putney Paper is a company in downtown Putney that keeps Putney from being a commuter town," Shumlin said, as so many other towns have become when they've lost their local manufacturing.
Putney Paper has been in business for over 50 years and a paper mill has been at that location since the 1818. It now employs about 120 people at its Vermont facility near the Connecticut River and is a leading manufacturer of napkins, towels, and wrapping tissue made entirely from 100 percent recycled paper.
“We are excited about our partnership with NG Advantage,” said Frank Tarantino, CEO of Putney Paper Co Inc. “Paper making is a very energy intensive process and conversion to natural gas will allow us to better compete in a global economy. Our competitors are located on gas pipelines and already have the natural gas advantage. Now we will have that advantage in Putney as well.”
He said the drying process in making paper requires substantial energy. Overall NG will save his company 20-25 percent in energy costs, which now uses number 6 oil.
Putney is about 160 miles from Milton. Evslin said the cost-effective range for his company is about 200 miles, after which the trucking costs start to un-do the fuel savings. He said that eventually NG will use natural gas-powered delivery trucks, once those become available.
Governor Douglas said he too can see the opportunity being built in Milton, "I know this is going to make a big difference to a lot of employers."
Evslin is usually seen with his wife and partner, Mary, but she was off visiting a grandchild during the ceremony. Evslin said he and Mary are the sole investors in this project. He said they are looking for other investors. He declined to say how much they have put into the project so far.
Along with Putney Paper, other companies mentioned as potential customers are the ski areas. Evslin and Lunderville have met with Jay Peak, which uses copious propane to heat its facilities, including the new water park. Evslin said there might be an opportunity to even convert the diesel-powered snow guns at ski areas to natural gas.
The business model, Lunderville said, is to serve businesses that are beyond the reach of the natural gas pipeline. As the pipeline moves south from Chittenden County into Addison County, NG will expand with it, he said.
Along with local officials, the governors and Tarantino, the event brought several business celebrities to Milton. Among them were Vermont Gas President Don Gilbert, GBIC President Frank Cioffi, Vermont Commerce Secretary Lawrence Miller and Vermont Fuel Dealers Association Executive Director Matt Cota. GBIC owns the Catamount industrial park.
NG Advantage LLC is the first announced compressed natural gas (CNG) distribution service in the US – bringing the economic and environmental benefits of North American natural gas to customers without access to a pipeline. With key customer contracts signed, equipment ordered, regulatory agreements in place and construction permitting well under way, NG Advantage expects to begin deliveries in early 2013 to customers in Vermont, New Hampshire and New York from its first compressor site and will add new sites starting later in 2013.
The Milton site will house equipment to compress natural gas from the Vermont Gas Systems’ pipeline to 3,600 pounds per square inch and load it into TITAN composite containers for delivery to customers.
“Our engineers are overseeing the manufacture and delivery of our compressor systems as well as the offloading stations at customer sites,” Lunderville said.
NGA was the first company in the US to order TITAN containers and will receive its first shipment in December, with more to come in the spring. The American made, forty-foot standard ISO containers are specially permitted by the US Department of Transportation and contain cylinders made of fully wrapped carbon fiber-reinforced epoxy composite with a high-density polyethylene liner. They are comparatively light, can handle pressures of several thousand pounds per square inch, and are more cost effective than legacy steel containers for delivering CNG to customers. Trailers with the containers mounted on them are left at customer sites, monitored remotely 24x7 by NGA, and automatically replaced before they are depleted. Customers have no need to invest in onsite storage and keep their old burner as a backup. NG Advantage plans expansion in the coming year with additional compressor sites to better serve customers across the region.
Photos: Top, Governor Douglas, Neale Lunderville, Tom Evslin and Goveror Shumlin; middle, in blue jacket, Frank Tarantino, CEO of Putney Paper Co Inc.