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Natural Gas Continues to Fuel Trucking Industry Discussions

September 3, 2013 By: Steve Mitchell Tags: Blogs, Fuel

Everywhere you turn in this industry, there are serious conversations taking place concerning the drinking habits of commercial vehicles. Are we going to embrace the concept of Class 8 tractors fueled by liquefied natural gas (LNG)? Or are we going to stick with the tried and true — and costly — diesel fuel?

Last month, Americas Commercial Transportation (ACT) Research hosted a webinar about this topical issue, and the response was so overwhelming that the company — which publishes commercial vehicle industry data — had to schedule a second session to handle the overflow. More than 350 members of the trucking industry listened in on this pair of online seminars.

In an industry where the profit margin for many trucking companies hovers at around 4 and 5 percent, fuel costs represent either the largest expense or are a close second behind labor costs. So there’s little wonder that the topic of LNG and CNG (compressed natural gas) is taking center stage.

In addition to the cost considerations — and they are considerable — the switch to natural gas offers a huge potential for environmental benefits. And of course, switching to LNG presents a golden opportunity to curtail this country’s reliance on foreign oil.

Adding to the allure of natural gas are figures from the U.S. Energy Information Administration (EIA), which believes an estimated 2,203 trillion cubic feet of natural gas is technically recoverable in this country — enough to last about 92 years. However, the EIA is quick to note that there remains considerable uncertainty regarding the actual size and economics of natural gas reserves.

ACT researchers suggest there might be a 100-year supply of natural gas that has the potential for future fuel price stability, a domestic (secure) supply and a proven safety record.

So let’s take a quick look at the advantages of natural gas in commercial vehicles:

Cost savings: Today’s diesel fuel comes in at around $4 per gallon, compared to $2.29 for the equivalent in compressed natural gas (CNG) and $2.92 for an equivalent gallon of LNG. That’s a potential savings to truckers of as much as $1.50 a gallon.

ACT researchers told its online audience that an estimated two million Class 8 trucks drive 75,000 miles per year in this country for a total of 150 billion miles. And at an average 6 to 6.5 miles per gallon per tractor, that amounts to about 25 billion gallons of diesel fuel. Based on the price of natural gas versus diesel fuel, that’s an astonishing potential savings for that sector of $38 billion per year.

Environmental impact: When it comes to the environment, greenhouse gas emissions from trucks using natural gas are about 20 percent lower than those using diesel fuel. According to the Southern California Gas Co., natural gas is one of the cleanest burning alternative fuels available today.

Vehicles using natural gas can reduce nitrogen oxide (NOx) emissions and reactive hydrocarbons — which form smog — by as much as 95 percent. Natural gas-fueled vehicles can also reduce carbon dioxide emissions by up to 30 percent, carbon monoxide by 85 percent and carcinogenic particulate emissions by 99 percent, the gas company claims.

Energy independence: In recent years, natural gas shale drilling has resulted in an abundance of cheap fuel, which has some advocates suggesting the country begin switching from imported oil to natural gas. Chief among these proponents is energy entrepreneur T. Boone Pickens who touts his plan to wean the United States from its dependence on OPEC oil. The cornerstone of his focus is expanding the use of America’s natural gas in our commercial vehicles and fleets.

So if natural gas is cheaper, burns cleaner, and insulates the country from the volatility of Middle East geopolitics, why then aren’t America’s fleets scrambling to refit their trucks to accommodate natural gas?

For one thing, trucking companies and owner-operators intent on using natural gas must come up with the $30,000 to $50,000 or so needed to outfit a Class 8 tractor to run on LNG. Those costs are gradually coming down, but that’s quite a surcharge for a commercial truck that has a sticker price beginning at around $100,000.

For another, LNG fueling stations are few and far between, with the EIR reporting only 33 in the country, excluding private stations. However, Clean Energy Fuels, a company backed by T. Boone Pickens, has installed more than 70 LNG stations — many at Pilot Flying J truckstops — and has plans to add up to 50 more by the end of the year.

And earlier this year, TravelCenters of America and Petro Stopping Centers reached an agreement where Shell Oil will build and operate liquefied natural gas fueling operations. LNG could be available at as many as 200 fueling lanes spread across 100 TravelCenters, TA and Petro facilities within the next few years.

So yes, the conversations continue. And webinars like the one hosted last month by ACT go a long way toward answering some of the concerns this industry has about alternative fuels. But liquified natural gas presents the first real opportunity for fuel change since commercial trucks switched from gasoline to diesel back in the 1930s.