What's behind TA's decision to get into the natural gas business?
July 23, 2012
A Q&A with Tom O'Brien, president and CEO, TravelCenters of America
Starting in 2013, Shell and TravelCenters of America plan to sell liquefied natural gas to on-highway customers through the existing network of TA and Petro truckstops.
The two companies signed a memorandum of understanding and still have a lot of final planning to do, but the deal would see more than 200 LNG fuel lanes built at about 100 TA sites and Petro Stopping Centers throughout the country. If a final agreement is reached, the first of the LNG fuel lanes are expected to become operational in 2013.
TA also plans to train and equip many of of TA's 3,000 repair technicians, 1,000 truck service bays and 400 Road Squad emergency roadside repair vehicles to service natural-gas-powered truck engines.
As part of research for our August cover story on natural gas, I recently spoke with Tom O'Brien, president and CEO, TravelCenters of America, to learn more:Q: What factors led you to decide this was something you needed to do?
A: There's been an awful lot of talk about natural gas engines among our customers and trade groups and things like that. They see the price differential, the potential for savings on fuel costs, and their biggest unknown I think in making the decision is, "Where do we get this fuel over the road?" The second biggest unknown is, "Where can we get these vehicles serviced over the road?" Really in was in response to that growing din of the demand kind of discussion, and I think we with Shell answered those two questions.Q: Do you have large customers that are already using LNG, or are interested in it?
A: Without naming names, I do believe many large trucking companies have had some limited exposure to natural gas vehicles; but no one in a major way for longer haul. They've really been limited to point-to-point where there's enough fuel to go out and back and fuel at an operating center or where their routes bring them by other locations to fuel. There really aren't that many of them at this point.Q: I understand there are still a lot of details to work out with Shell; how long is that negotiating period expected to last?
A: I would say it'll be within a few months.Q: What are some of the steps the company will have to take to make this a reality?
A: First we've got to identify the initial sites. While ultimately believe we can crisscross the nation with natural gas fueling stations because our network is large enough to do that, I think initially the site selection will be based upon an assessment of verified demand, if you will. Start with a core group of customers that need that fuel in a particular location or area, that's how it will start, and branch out from there. That gives us the flexibility to not only build initially in the most economically viable locations, but also to be able to respond to customers' demands and needs. Not everybody's going to be on the same track in terms of timing; those that are further ahead may have demand ahead of those that are further behind.
Then it's a matter of we've got to determine things like location on the site, whether it's going to be natural gas that is added to existing fueling lanes or natural gas that is tacked onto the end of an existing canopy or in a completely separate area. All of those things need to be decided based on facts and circumstances, tech, local ordinance, etc.Q: I understand there's a slightly more complicated process for LNG fueling than diesel, including protective gloves and face masks. Is this just something that you will assume drivers will have and know how to do as trained by their companies? Any precautions to make sure drivers don't attempt to do anything they shouldn't?
A: It's safety first, and we will work out the exact details of that in connection with those initial customers. If it turns out each customer's going to train its folks to be able to do it and have the right safety gear, we may provide backup support for that, whether it be required auxiliary safety gear, video raining at the pump, things like that, or whether we do some of that with our own folks. Those are details that'll be worked out but certainly are very high on the priority list, all of those safety considerations.Q: What about adding compressed natural gas (CNG)?
A: We've left the possibility open and will make that decision on a site by site basis.Q: How does this fit into TA's larger growth strategy?
A: We've been around for 40 years, providing products and services demanded by the trucking community for that entire time. This is more complex, more involved, and is probably much more of a leap forward in terms of change, in terms of things that could impact trucking in a major way. It's probably the biggest innovation in fuel since the invention of the diesel engine.
On the other hand, it's just another product, our customers may demand it, we're going to be there to provide it as we do with all the other things.
Author: Deborah Lockridge | Posted @ Monday, July 23, 2012 8:27 AM