By 2017, approximately 8% of new North American Class 6-8 commercial vehicles will be natural-gas powered, approaching annual sales of 29,500 units, predicts research firm Frost & Sullivan.
Some observers are comparing the future use of natural-gas fuels in trucking to the move from gasoline to diesel, or even finding analogies to the switch to "motor trucks" in the early 1900s from the horse and wagon.
Why use natural gas?
At first, interest in natural gas was driven by cleaner emissions, especially in areas such as the Los Angeles-area ports where air quality was a big problem. Local regulations and incentives drove many port drayage fleets to trade in older, higher-polluting trucks for natural gas.
As the U.S. has experienced a natural-gas boom, focus has turned to reducing dependence on foreign oil. Energy magnate T. Boone Pickens has used this as his primary rallying cry in promoting his "Pickens Plan" to "stop America's addition to OPEC oil."
Some fleets see natural gas as part of a larger commitment to sustainability, to "being green." This is especially true for many private fleets.
Those are all good reasons to use natural-gas fuels. Yet today, the biggest reason fleets are buying natural-gas trucks is simply the price at the pump.
"For some people it's greenhouse gases and for some it's dependence on foreign oil and for some it's emissions," says Rich Kolodziej, president of NGV America, a national trade association. "For the other 99%, it's money."
Natural-gas prices tend to run about $1.50 to $2 per diesel-gallon-equivalent less than diesel, and historically have been less volatile. For a lot of companies, that difference in price is more than attractive enough to make up for the higher up-front cost of a natural-gas truck.
In addition, some fleets see natural gas as a competitive advantage.
Kolodziej says refuse fleets such as Waste Management and Republic, who have made big investments in natural-gas trucks, "have a huge leg up" competing for a franchise. Contracts that give preference to and even require natural-gas trucks are becoming increasingly common, he says, because cities are looking at the lower cost of the fuel and the bragging rights that go with quieter, cleaner-burning trucks in a residential environment.
In another example, Texas-based Green Energy Oilfield Services finds that passing on the lower fuel costs is helping its business.
Green Energy is using 60 liquefied-natural-gas-powered vacuum and frac trucks to support natural-gas producers such as XTO.
"With the depressed natural-gas prices, it got to the point where the [oilfield] operators were having a hard time making the economics work," explains Roger Nevill, president and COO.
Because the price of natural gas is both cheaper and less volatile than diesel, he says, his company has dropped its fuel surcharge.
"Our customers love it," Nevill says. "It's really helped us a lot. They want the natural-gas trucks. It's really leapfrogged us" over the competition.
Natural-gas fleets also may be more attractive to customers who want to be seen as "green."
"More and more shippers today have sustainability programs," says Clint Dearing, director of operations for third-party logistics provider Transplace. "Natural-gas-powered fleets fit that really well."
Transplace recently worked with customer Sunny Delight to find a fleet that would run natural-gas trucks. It brokered a deal between the juice maker and a small fleet of three trucks that was already servicing the Southern California market for the company. A five-year agreement helped give the fleet the confidence to make the up-front investment in the natural-gas trucks.
'Evolutionary, not revolutionary'
Despite the growth, natural gas still makes up a small fraction of the nation's truck fuel use, and natural-gas trucks are expected to make up a small fraction of the industry in the near term.
The amount of natural gas used as fuel last year, the equivalent of 345.7 million gallons of liquid fuel, is a drop in the bucket compared to the 37.2 billion gallons of diesel fuel the American Trucking Associations reports was consumed last year.
Stu MacKay of MacKay & Co., a management consulting and market research firm focusing on the commercial vehicle industry, believes the adoption rate will be slower than many of the forecasts we're currently seeing, especially for liquefied natural gas.
"There are opportunities for natural gas; I can't discount that," he says. He's skeptical, however, of "everybody jumping on the Boone Pickens bandwagon of the 100% adoption of what he says is something like 8.1 million trucks."
Looking to the past for a comparison, MacKay says, "look at how long it took dieselization to become 100%. That was probably a 30-, 40-year trend, and that didn't require anywhere near the investment being required for natural gas. Trucking is still an evolutionary industry, not a revolutionary industry."
There are many things fleets need to consider when investigating a natural-gas purchase.
"Dealers may get a customer who calls up and says, 'I want a natural-gas vehicle,' thinking it's as simple as that - and it's not," says Chad Parker, the Volvo Trucks product manager who's handling alternative fuels. Most of his job these days is dealing with natural gas. "I think there's still a lot of people who are shopping," he says.
LNG vs. CNG
Abundant as natural gas is, you can't just plug your truck's fuel tanks into your local pipeline. It must be made denser somehow in order to get enough onboard a vehicle to use as fuel.
There are two ways this is done: compression and liquefaction.
Compressed natural gas, or CNG, comes straight off a pipeline, then is compressed to pressures of 3,600 psi. It's stored on board vehicles in tube-shaped high-pressure cylinders or tanks that may be saddle-mounted on the frame rails or stacked behind the cab in a special cabinet.
Liquefied natural gas, or LNG, is refrigerated down to 260 degrees below zero, at which point it turns into a liquid. Its big advantage is LNG requires only 30% of the space of CNG to store the same amount of energy. LNG is typically trucked from the liquefaction plant to the fueling facility.
"All engines in the end operate on compressed natural gas," explains Stephen Ptucha, director of product management for Westport HD, which makes the Westport HD 15-liter and the Cummins Westport ISL-G 8.9-liter. "The difference is how the fuel is stored on the vehicle."
One of the biggest differences between the two fuels when it comes to actual fleet operation is range.
Ptucha says if you're operating a truck at 6.5 mph and fill it with 100 gallons of diesel fuel, you could get roughly 650 miles. Put the same amount of LNG by volume on the truck, and you wouldn't get quite 400 miles. With CNG, it would be less than 200 miles. For either, you have to put more fuel tanks on the truck to get the same range as your conventional diesel. That leads to weight concerns, as well as limits imposed by chassis length.
Conventional wisdom is that CNG is a good option for return-to-home-base operations such as refuse, transit, drayage, local delivery and even some regional operations. LNG is viewed as the fuel that will be needed if natural gas is to make the leap to long-haul operations.
One potential problem with LNG is that as it sits in a truck's fuel tanks, it will absorb heat, despite the special cryogenic tanks. That heat will convert some of the fuel back to a gaseous state. So vehicles that sit for longer than overnight will lose some of the fuel to evaporation and therefore take a hit on fuel economy.
C.R. England Dedicated, which is currently testing five LNG-powered Kenworth day cab tractors on a run between Southern California and Las Vegas, was concerned about this when it started its pilot project, says Tracy Brown, director of dedicated operations. But the C.R. England trucks only sit from Saturday afternoon to late on Sunday, and they haven't had any problems
"We've got enough drivers cross-trained that if we have a driver on vacation or something, we'll put another driver on the truck and keep it moving," he says.
There are two types of CNG fueling: fast fill, which is similar to the time spent fueling a diesel truck; and slow-fill or time-fill, where you plug in the truck overnight and it fills slowly and automatically.
One drawback to fast-fill is called heated compression. When you're filling that tank quickly, you generate a lot of heat in the tank. Heat means pressure. There's a limit to the amount of pressure you can put in the tank. So you fill the tank up, but as that gas cools off, you could lose as much as 30% of the range indicated on the tank, explains Brian Powers, vice president of operations for Clean Energy Fuels.
In addition, fast-fill CNG stations are more expensive to build and to operate than slow-fill, Powers says.
"It's very expensive to fill at that rate on CNG," he says. "It's capital-intensive and the operating costs are high, particularly power costs, when you're trying to get that much compressed gas into a vehicle that quickly."
In comparison, it takes only about three minutes to fill a 120-gallon-equivalent cryogenic LNG saddle tank.
On the other hand, drivers can refuel CNG-powered trucks without needing to go through special training, Kenworth's Douglas says, while the cryogenic LNG fuel requires special training. Safety precautions during LNG fueling include the need to wear safety goggles or mask, hardhat and gloves, and hooking a ground cable to the tank.
However, fueling with LNG "is not near as difficult or technical as some people would think," says Green Energy's Nevill.
C.R. England's Brown agrees, calling the LNG training "more or less a non-event." Sure, he says, "any time you stick a driver into a piece of new equipment there's a little concern, but those quickly diminished."
Before choosing CNG or LNG, fleets need to take inventory of natural-gas stations in their area and along their operating routes.
"Traditionally, you would see a fleet look at purchasing some sort of refueling station, whether it was a mobile refueler or permanent station, and place this on their own property," explains Westport's Ptucha. "They might partner with a fuel supplier or fuel delivery company, likely with some contract involved to guarantee the amount of fuel used. So both sides could reduce the risk."
Clean Energy Fuels' bread and butter for 15 years has been working with fleets to put natural-gas fueling facilities on the fleet's property. Often this includes public access so the fleet can offer retail fuel to others in the area.
Whether you can justify putting in your own natural-gas fueling facility, Powers says, depends on volume. For CNG, you're looking at a minimum of 1,000 gallons a day within the first couple of years. For LNG, you're looking at more like 2,000 gallons a day, he says. That volume can be from your own fleet or can include public-access customers.
There's an increasing interest in public stations.
"Currently, many local transit and government agencies use CNG to power trucks and buses, so that fuel source may be easier to find" than LNG, says Andy Douglas, Kenworth's national sales manager for specialty markets. "Meanwhile, the natural-gas infrastructure available to the public is expanding at an accelerated rate across the U.S. and Canada along well-traveled transportation routes."
There are very few public LNG facilities currently operating that can accommodate tractor-trailers. The exact number is unclear. One report indicates that as of last year, according to DOE numbers, there were 44 fueling stations for LNG trucks in the U.S., most in California. Ryder's Perry puts it at fewer than 10 such stations that actually can accommodate tractor-trailers. When Freightliner was looking for natural-gas stations for a cross-country demo trip in May, it identified 19 - 14 of them in the Los Angeles basin.
Although there are many more CNG stations out there than LNG stations, most of those CNG stations were designed for light-duty vehicles, not for heavy trucks. Many of them you can't even physically get a tractor-trailer into. Even if you can, the first truck of the day might get a reasonably fast fill, but once you've depleted the storage system, it's going to take a truck half an hour or more to fuel.
"So what happens is, people go to their local truck dealer and they just know they want a natural-gas truck," Powers says. "They go look at a map someplace and see all these CNG dots."
Problem is, a lot of those dots aren't capable of filling a Class 8 truck.
NGV America is working with the Department of Energy to have the agency's online maps indicate which stations are truck-friendly.
There have been a number of big announcements this year that should help expand the natural-gas infrastructure:
- Clean Energy Fuels is working to put in 150 LNG stations by the end of next year along major corridors to create what it's calling "America's Natural Gas Highway."
- Shell and TravelCenters of America are finalizing a deal to build an LNG fueling network at 100 truckstops starting in 2013.
- Trillium CNG and AMP Americas announced a joint venture to build a network of fast-fill CNG stations across the U.S., initially along the I-65 and I-75 trucking corridors and major routes in Texas.
- Real estate development company DeBartolo Development teamed up with real estate consultancy Keystone Consulting Group for the CNG Infrastructure Expansion Project. The partnership plans to develop 1,000 stations in the next four years. It's unclear how many will be commercial-truck friendly.
Coast to coast on CNG
Freightliner recently decided to highlight its Cascadia 113 day cab with the upcoming Cummins ISX 12-G engine by taking a cross-country trip from Los Angeles to Washington, D.C., on CNG. Although the truck performed well, the trip illustrated some of the challenges with natural-gas infrastructure.
The planners chose CNG for the demonstration because of the availability.
"LNG at this point is not there yet," explains Greg Treinen, marketing manager for medium-duty and alternative fuels.
David Haynes, general manager of marketing and strategy for Daimler Trucks North America, says, "Most of what you hear in the press is all about LNG infrastructure that's being planned to go in. But the fact is, there's a pretty healthy CNG infrastructure already in place."
However, they did run into a few hiccups.
"A lot of the newer stations we stopped at, like the one in Oklahoma city, we had a great fast fill, we were able to get more than 3,600 psi on our 150 diesel gallon equivalent," Treinen says. At some, however, lower pressures only allowed a 75% to 80% fill. "A lot of the stations were not necessarily designed for large trucks. The compressors, the storage facility, they can't compress the gas fast enough to fill up that amount of fuel."
There were also a couple of points where they had to drive 5 to 10 miles off the freeway to get fuel, and some that were a tight fit for the tractor-trailer.
Who's using natural gas?
Natural-gas fuel probably has the most penetration in the refuse market. Frost & Sullivan projects that natural-gas refuse trucks will approach 50% share of new refuse vehicle sales by 2017. NGV America's Kolodziej says conversations with OEMs indicate we're nearly there already.
Refuse fleets are hardly the only trucking application adopting natural gas. Port drayage, delivery fleets such as UPS, vocational fleets, municipal fleets, regional hauling, food and beverage, dedicated and private fleets are all among those who are at least pilot testing natural-gas vehicles.
When asked for predictions on how fast natural gas would catch on in the industry, OEs and dealers were hesitant to share internal estimates.
Improvements to the infrastructure, as noted above, will help spur adoption. So will the fact that there are a number of new natural-gas engines coming onto the market in the next couple of years. These new 12- and 13-liter products will fill in a gap in the current available engines, which jump from 8.9 liters to 15 liters. Return on investment is a big factor; recent lower diesel prices have forced some fleets to recalculate those numbers. At the same time, with more natural-gas-powered vehicles coming into the market, volume is slowly bringing down that extra up-front cost.
"It really depends on a lot of things," says DTNA's Haynes. "How quickly the infrastructure develops, what happens with the price of diesel; it's anybody's guess right now. I am confident it's a future fuel and it's here to stay. Will it displace diesel in my lifetime? No."
From the August 2012 issue of HDT. To come in this series: Equipment availability and considerations, return on investment and more.
Natural Gas, What Fleets Need to Know Part 2: New Engines, More Options
Natural Gas: What Fleets Need to Know, Part 3 - What's the Payback?
NATURAL GAS: WHAT FLEETS NEED TO KNOW, contents page