AT&T Buys 101 Natural-Gas-Powered Chevy Vans

AT&T (s t) committed two years ago to make one of the largest purchases of compressed natural gas vehicles in the U.S. to date. On Friday, the telco released more details on how it will reach that goal: it will buy 101 Chevrolet (s gm) Express Cargo 2500 natural gas-powered vans.

The Chevy compressed natural gas vans (CNG) are the second piece of AT&T’s plan to spend $565 million purchasing 15,000 alternative fuel vehicles, including spending $350 million on 8,000 compressed natural gas vehicles. The first part of the plan, announced in summer 2009, was that BAF Technologies would convert 600 Ford (s f) E-Series vans to run on compressed natural gas.

AT&T plans to retire an estimated 7,100 gasoline-powered vehicles from its fleet over the next decade. CNG vehicles produce only about 20 percent less greenhouse gas emissions than a standard gas vehicle (an improvement that’s not much better than corn-based ethanol, and modest enough for venture capitalist Vinod Khosla to call natural gas vehicles a “dead end“). And one of the main challenges has to do with infrastructure: Natural gas fueling stations in the U.S. number in the low thousands, compared with more than 200,000 gas stations. Conversions are also somewhat expensive in the early days of CNG cars.

For AT&T, the purchase is smart economics, though. AT&T can replace its aging fleet over a decade with alternative-fuel vehicles, and depending on which technologies it uses, it could get up to a 39-percent improvement in fuel economy and reduce greenhouse gas emissions by up to 29 percent, according to AT&T. So the massive phone company can save significantly on gas prices, which are predicted to rise over the coming months. It can also show its green credentials and likely tap into some of the incentives for green vehicles in the stimulus package.