AT&T will spend up to $565 million over the next decade on the replacement of thousands of vehicles in its fleet with models that run on alternative fuels, beginning with nearly 800 this year.
The telecommunications giant estimates it will spend $350 million on 8,000 compressed natural gas (CNG) vehicles -- which it says is the largest U.S. corporate commitment to CNGs to date -- and $215 million on more than 7,000 hybrid or next-generation alternative fuel passenger cars.
"Bottom line, this is all about a long-term commitment and a long-term strategy for us to reduce our dependence on foreign oil, to get behind sustainability and move at it with a pretty good pace," Jerome Webber, AT&T's vice president of fleet operations, said in an interview with Joel Makower, GreenBiz.com's executive editor. "We also hope by doing this that we will signal demand and convey to the U.S. automakers that there is a market for more fuel-efficient work vehicles."
AT&T's current fleet of nearly 89,000 vehicles consumes roughly 80 million gallons of fuel every year at a cost of between $200 million and $300 million. The introduction of the CNGs and hybrids will have a significant impact on the company's bottom line: Compressed natural gas costs up to 40 percent less than gasoline and hybrids are about 40 percent more fuel efficient, Webber said.
Environmentally, the CNG vehicles will emit 25 percent fewer greenhouse gas emissions than their conventional counterparts, while the hybrids will reduce emissions by 29 percent.
AT&T will add the 8,000 CNGs to its fleet over the next five years; it currently operates 25, which are used mostly for network installations and maintenance. An American automaker will build the chassis before they are converted to run on CNG, while as many as 40 new CNG fueling stations will open through partnerships between AT&T and fuel providers, all of which could save or create 1,000 jobs annually for five years, based on estimates from the Center for Automotive Research.
As the passenger cars in the company's fleet reach retirement, they'll be replaced in the short-term with gasoline-electric hybrids, but the company will consider next-generation technologies as they hit the market in later years. These vehicles are used by AT&T supervisors and employees in various departments, such as sales, marketing and public affairs, Webber said.
The origin of the initiative can be traced to long-term business plan developed in 2007 to explore alternative fuel technologies. A subsequent pilot program last year tested 105 hybrid and CNG vehicles.
"Positive results from that pilot were confirmed later in the year," Webber said. "So with the early results coming back so favorable, we felt confident that we could substantially increase the number of alternative fuel vehicles in our fleet."
Webber advises companies considering alternative fuels to do their homework, adding that there is no "silver bullet" alternative fuel technology that suits every task at AT&T.
Though the pilot program convinced the company that alternative fuel vehicles would perform well in its fleet, it wasn't prepared for how an important set of stakeholders would react to the initiative: AT&T employees, who brimming with ideas for making the fleet more efficient.
"Our employees are just enthusiastic about AT&T stepping up and being a leader in this particular space around sustainability, and trying to do something to reduce our dependency on foreign oil," Webber said. "I will tell you ... the thumbs up, welcome and enthusiasm we received from our employee body was definitely something we had not anticipated, and that's all good."